FREQUENTLY ASKED QUESTIONS
1) How is your work on a property dealing compensated?
For resale properties:
In accordance with the Hoguet law of 2nd January 1970 which governs property professionals, the buyer pays us when signing the final deed. Our fees are a percentage of the selling price and are consistent with the industry average. As a realtor, we are normally mandated to sell properties by the seller. The mandate outlines how the agent can market the property for sale, the characteristics of the property, the price, the time period, the commission payable to the agent, etc. Sales mandates can be simple or exclusive.
There are no upfront apartment search fees. When another realtor represents the seller, the fees are shared. There are no extra fees.
For off-plan properties:
The developer who is selling the propert is used to retrocede us a part of his profit margin. Property prices are exactly the same as through the developer direct. As one of our investor clients, you will also enjoy our tailor-made services which can't provide a developer.
2) What is your added value in comparison with a classic realtor ?
For your peace of mind, a fluent English-speaking consultant is at your disposal to provide tailor-made services and accompany you at every stage of your investment.
3) What is the purchasing procedure of a new property sold as off plan (Vente en l’Etat Futur d’Achèvement) ?
The first stage is the reservation of the unit.
A deposit of 5% is usually requested to reserve the apartment. This deposit is paid on an escrow account with the notary in charge of the transaction. It is not available and cannot be accessed. Proof of the transfer must be provided to the marketer to guarantee and validate the reservation, usually within 72 hours.
The following step is to return the contracts signed by the purchaser. This must take place within 3 weeks as of the date of the reservation.
Given that most contracts are in French, foreign clients often consult a lawyer specialising in this type of transaction during this period of three weeks.
The contracts are then countersigned by the developer and a countersigned copy is sent to the purchasers. The cooling off period of 7 days that the purchasers have if they wish to cancel their purchase starts on the day that the letter is first delivered.
The purchasers are strongly recommended to submit their mortgage application within 15 days of signing the contracts or at the latest 15 days following the receipt of the countersigned contracts.
The purchaser is obliged to inform the developer of the bank's decision as soon as possible and is generally required to send a copy of the accepted mortgage offer. This is then sent to the notaire so that the draft of deeds can be drawn up.
The draft of deeds are sent to the purchaser by the notaire with, if necessary, power of attorney if the client does not wish to go to the notaire’s office in person to sign the final deed of sale. This power of attorney gives the notaire all authority to sign for and on behalf of the purchaser.
From that moment onwards, the buyer is the owner of the property.
When buying off plan, the owner will be asked, once the bill of sale has been signed, to pay the total price through stage payments proportionate to the progress of the works. A payment schedule is attached as an annexe to the reservation contract.
4) What kind of guarantees are provided to the investissor who buys an off-plan property, in VEFA ?
Off-plan sales enable a property developer to sell flats whereas the construction of the building has not begun yet. This kind of sale is strictly controlled by the law to protect the purchaser (articles L. 261-1 et seq. of the French Construction and Housing Code.
The property developer is forced to provide a completion guarantee. Most of the time, it's a banking guarantee by which a bank ensure you the completion, whatever may happen.
The perfect completion guarantee (garantie de parfait achèvement) last one year from the completion and covers all damage noted for this period.
The biennial guarantee for good working (garantie biennale de bon fonctionnement) covers all the defects which appear on the fittings separable from the construction (shutters, doors, heaters, plumbing, etc.).
The decennial guarantee (garantie décennale) covers all the disorders which compromise the robustness of the building for the next 10 years: defective roof, lack of waterproofness leading to leaks, etc.). In order to be solvent to ensure this guarantee, the property developer is forced to subscribe an specific insurance (assurance dommage-ouvrage).
5) How do you hunt the resale properties which fit the criteria of your customers ?
As soon as we have defined your criteria, we contact with:
potential sellers,
our network of partners and customers in property or financial circles,
other local realtors.
The privileged relations that we've built with our partners allow us to propose to you exclusive opportunities which are not in the local realtors’ window.
6) What does the purchaser have to pay in addition to the price of the property ?
The extra costs for the purchaser are:
- Notary fees: Reduced rate for an off plan property, full rate for an existing property.
- Mortgage fees, debited by the bank depending on the amount borrowed.
- The Power of attorney fees if applicable.
- The tax firm charges (the organisation that looks after VAT reimbursement procedures for the leaseback scheme).
7) What about the financing ?
Mortgages are available to 80%. Your personal contribution of 20 % can be paid to the seller or invested in a life insurance which is secured to the bank. Interests are self-financed by rentals since capital is paid back at the end by the life insurance. It's the principle of in fine financing.
8) What about the tax and declaratory obligations ?
If you rent your flat, you will have to make out a statement of income every year. It is possible to deduct mortgage interest payments from any income tax liable in France providing that the correct fiscal regime has been selected. As a financial consultant, we can look after this for you.