Part Two - Purchase Process
By Adrian Leeds
Sign the "Promesse de Vente" or "Compromis de Vente" (Pre-sale Agreement)
The Notaires will prepare the documentation for the signing of the Pre-sale Agreement and you will be asked to provide a deposit held in escrow by the Notaire. This is normally 10% of the purchase price of the property, however, in today's market with prices escalating in central Paris, sellers will often agree to holding 5%, as long as the buyer is willing to pay the full 10% should a default occur.
At this time, the seller must provide the required diagnostics:
energy efficiency, termites, lead, asbestos, natural risk, swimming pools, flooding, quarries and the "Loi Carrez" (official habitable space). He must also provide the "Réglement de Copropriété" (homeowners association bylaws), the "carnet d'entretier de l'immeuble" (maintenance record of the building) and proof of the "copropriété" annual fees.
The buyer, seller, representing Notaires and agents convene for the actual signing. The buyer and seller may have an outside representative or Notaire sign on his behalf with Power of Attorney. We do not recommend that your own Notaire sign on your behalf, as it's best to have another outside but interested party reviewing the signing in your interest. This is another situation where a property consultant can be very valuable and act to protect your interests.
Once the "Promesse de Vente" or "Compromis de Vente" is signed, you have seven days within which a full retraction of the purchase can be made with no financial or legal ramifications. This is called the "cooling off period." For legal reasons, a registered letter must be sent to notify the Notaires and the deposit will be returned within 21 days of the retraction.
(In your absence, we can sign on your behalf with Power of Attorney. We also verify that every aspect of the pre-sale agreement is correct and to your accord.)
Prepare for the Final Signing of the Deed: Financing the Property
If you choose to finance the property, applications must be submitted to the banks. Non-resident buyers should work with banks and lending institutions that specialize in non-resident loans or with loan brokers that can provide the service.
The timing is critical, as the Pre-sale Agreement will dictate the deadlines to acquire a loan offer and an 10-day waiting period is mandatory before an offer can be accepted. One contingency of the Pre-sale Agreement ("clause suspensive") regarding the loan is a protection for both the buyer and seller outlining the specific conditions of the loan. If a loan of a particular amount, at a particular rate, and particular term, as requested by the buyer, is not achievable, by proof of the bank's rejection of the applicant, then the buyer will not lose his deposit and the property will revert back to the seller.
Meanwhile, the Notaire gathers specific information and prepares for the signing of the final deed. He must verify that the seller is the rightful owner of the property, that the description of the property is correct in regard to the city planning and easements, along with what money may be owed on the property.
Conclusion tomorrow- final steps