Process of buying real estate

PURCHASE PROCEDURE:

The procedure of purchase or sale of real estate includes several essential steps, from a planned purchase of an apartment or a house to signing a certificate of sale at the notary’s, which guarantees the proper formalization of this certificate. We provide assistance and consulting to buyers and sellers during the entire process of sale and purchase till the keys handover.

Useful information:

Stage 1: Searching for real estate
There is no specific rule in finding real estate. Prospective buyers either do their own research (reviewing web sites, magazines with ads, private sales data etc.) or use the services of real estate experts.

Stage 2: Purchase offer

Please note: A purchase offer imposes liabilities to the person who signs it. It is often used in the realtors’ practice.
The buyer makes an offer to the seller to purchase the relevant apartment at a price which is equal or less than the price offered by the buyer and on certain terms and conditions.
Prospective buyers prefer if their offer is limited in time. In this case they cannot disclaim the liabilities as to their offer until the expiration of the term mentioned in the signed document.
If the buyer does not accept their offer within the stipulated term, the buyer has freedom to act again.
On the contrary, if the offer is accepted, they shall sign a preliminary contract (a promise or a tentative sale arrangement).

Stage 3: Preliminary contract of sale of real estate (compromis de vente)

In a preliminary contract, both parties – the seller and the buyer – shall state their consent as to the terms and conditions of sale, waiting for the fulfillment of the contingent conditions contained in the preliminary contract. If there was no preliminary offer to buy, this step shall be the second one in the process of sale.
The real estate agent responsible for the sale shall invite the buyer and the seller for a meeting in order to sign the documents. He shall ask the buyer to issue an invoice for an amount equal to 10 % of the purchase price and for the expenses for preparation of a preliminary arrangement on the sale of real estate. He shall ask the seller to complete all inspections of the real estate unit by this date.

a. Liabilities of the Buyer

I. In exchange for the seller’s liabilities, the buyer shall make a security deposit. As a rule, it amounts to 10 % of the total sum. The relevant check shall be issued at once in favor of the notary’s office.
This amount is either a partial payment for the real estate unit if the sale is finalized or a compensation for the seller if the buyer does not sign the final document of sale.

II. Time for reflection to waive the transaction:
However, the buyer shall have the right for reflection to possibly waive the transaction within 7 (seven) days (starting from the day following the day of handing over the notification of acceptance of the preliminary contract delivered via registered mail or via a registrar). He does not need to indicate any reason for his waver. Then he may recover the complete amount of his security deposit within the period not exceeding 21 days, starting from the day following the start of the period for reflection to possibly waive the transaction.

b. Liabilities of the Seller

He shall order and obtain a technical certificate which contains technical diagnostics, including:
- measurement of the real estate unit subject to sale (loi Carrez); ‬
- risk of exposure to lead;‬
- asbestos content; ‬
- status as to parasites (termites etc.); ‬
- analysis of energy efficiency; ‬
- status as to natural and man-caused dangers; ‬
- condition of gas and electric appliances if they are older than 15 years.
He shall provide this technical certificate to the notary prior to signing a preliminary arrangement of sale of a real estate unit or a promise to sale, so that the buyer could get information on the condition of the real estate unit.
In case joint property is sold, the seller shall provide other information: the statute of the partnership (condominium) of the housing owners, the register of technical maintenance of the building, the amount of costs of the partnership (condominium) of the housing owners etc.

Stage 4: Purchase in credit

The agent shall inform the buyer on a 3 (three) months delay prior to signing the final certificate of sale. He shall explain that within this period the buyer shall contact his bank in order to obtain a loan, as there is a risk of a final involvement into the transaction at this stage, without making sure that the loan will be actually granted.
If the buyer does not obtain a loan, the buyer may either proceed with the purchase (in case he has another source of finance) or to waive the transaction. In the latter case, the buyer will recover his security deposit, except for cases of willful negligence (i.e. if the offer exceeds his financial possibilities or is inconsistent with the estimate of the preliminary contract).
Please note: if the buyer does not intend to apply for a loan, he shall confirm this fact with a written document. If a preliminary arrangement of sale of real estate or a promise of purchase were received under a notarized act, such written document is not obligatory.

Accepting the loan offer:

The buyer shall have a delay in payment at least 30 days in order to obtain a loan, in view of the terms and conditions foreseen in the preliminary contract (the amount, duration, interest rates etc.). Preliminary arrangements for sale of real estate property, as a rule, foresee a period of at least 45 days.
After the bank issues a loan offer, the emprunteur may only accept it 10 (ten) days after obtaining it. It means that the contract of sale may not be signed prior to the expiration of this term.
The notary, on his part, shall check certain data, including: whether the seller owns the real estate unit, the availability of the documents of title of the previous owners, the location of the real estate unit in relation to the city planning and landscaping, servitudes, mortgage (pledge) status of the real estate unit etc.
There are cases when the relevant real estate unit is located in a district where a preemptive right belongs to the municipality. It means that the municipality, within 2 (two) months, has a preemptive right to purchase the relevant real estate unit in order to implement a project having a public interest. The certificate of sale cannot be signed prior to this date.
All these factors explain the time between the preliminary contract and the final certificate of sale.

Stage 5: Certificate of sale (l’acte de vente)

If the buyer has received a loan a notary and/or a real estate agent shall contact the buyer and shall inform him that the documents are fully formalized; then the former shall invite the buyer to a meeting where the documents will be signed. The buyer will be asked to bring a bank check for an amount equal to the final sale price and the amount of the costs to cover the sale (see the information below: expenses for the sale).

The process of sale

On the day appointed for signing, the buyer shall appear before the notary. The seller, the notary and the real estate agent shall be present as well.
The notary shall read the certificate of sale aloud. The buyer shall listen very carefully and shall ask relevant questions in order to make sure he understands his liabilities.
The seller shall deliver the buyer the keys in exchange for providing a bank check or a bank transfer to the notary.

Stage 6: Peculiarities of the sale price

The seller may express his concern if the seller does not receive the full amount for the sold real estate.
The full sale price set forth by the seller implies that this amount shall be paid to the buyer. The notary shall explain that it is necessary to return the current mortgage loan for the real estate, to withhold the deposit needed to release the security from the real estate etc.
Only the resulting amount after these deductions shall be delivered to the seller.
Then the notary shall deliver the certificate of sale to the seller and to the buyer. He shall inform the buyer that the latter will receive his document of title and the final settlement of the costs related to the sale after completion of all procedures related to registration with the state bodies and with the Chamber of Land Property Registration (auctions, specialized sites with notarial ads etc.) or via a real estate agent.

In order to assist individual buyers in familiarization with the real estate market, the notaries offer different instruments and statistical data on prices for real estate, especially in the Paris Region (Île-de-France).