Step By Step Guide To Selling A Property In France

Here is our comprehensive guide to selling property in France. We have put this into 10 crucial points which are easy to follow.

 

1. Estate Agents in France

This guide explores the role of estate agents in selling French property. The operation of estate agencies in France is highly regulated, but this does not guarantee high-quality service or reasonable fees, so choosing the right agent is critical.

We will examine the following key areas:

1. Choosing an Estate Agent

Your choice of estate agent will be influenced by various factors, including:

• Their fees
• Your proficiency in French
• Proximity of their office to your property
• Availability to handle enquiries
• Experience in the field
• Marketing strategy
• Property valuation estimate
• Diligence and enthusiasm
• Quality and reach of their website
• Additional services or expertise
• Quality of property descriptions
• Reputation

 

Your property’s type, size, age, and condition will also matter. Properties in areas popular with international buyers might benefit from an agent with strong international connections, while others may need a local agent. National estate agent chains can offer broad exposure but often charge higher fees. Combining international, national, and local agents might be the best approach, especially if your property appeals to multiple markets.

 

Avoid giving an agent exclusive selling rights, as this means a fee is due even if you sell the property privately.

2. Professional Qualifications

To become an estate agent in France, one must have a relevant professional qualification or several years of experience in a registered estate agency. They must obtain a “carte professionnelle,” renewed every three years, requiring regular professional training and offering a financial guarantee and professional indemnity insurance. This card is issued by the Chambre de Commerce et d’Industrie (CCI).

There are two types of carte professionnelle:

1. For estate agents allowed to sell properties.
2. For letting agents, who cannot engage in property sales.

 

Many agents operate through registered estate agents without a carte professionnelle. These self-employed agents are called “agent commercial immobilier” or “mandataire immobilier.” They must act on behalf of a registered agent, who processes the sale contract and holds the deposit.

 

3. Mandat de Vente Sale Mandate

Once you choose your estate agent(s), you will need to sign a written contract called a “mandat de vente.” This contract must meet legal requirements and be in writing; otherwise, it is invalid. There are non-exclusive (mandat de vente simple) and exclusive (mandat de vente exclusif) contracts. A semi-exclusive contract allows private sales alongside the agent’s efforts.

 

3.1. Right of Retraction

If the contract is signed at your home or outside the agent’s office, you have a 14-day period to withdraw, known as the “délai de rétractation.” This right must be clearly stated in the contract. There is no right of withdrawal if signed in the agent’s office.

 

3.2. Time Limited

The contract must be time-limited. Non-exclusive contracts can renew automatically, but exclusive contracts cannot and must be renewed every three months.

3.3. Fees/Commission

Fees are negotiable and only payable upon the sale’s conclusion. The fee responsibility is often stated as being on the buyer, but the buyer must agree.

 

3.4. Double Mandates

An agent can represent both buyer and seller, earning commission from both, though this practice is rare.

 

4. Property Valuation

Get valuations from several local estate agents, who cannot charge for this service. Local notaires can also provide free valuations. Research online and consult the land registry for additional information. Estate agents may offer inflated valuations to win your business but aim to sell at realistic prices to earn their commission.

 

5. Property Description

Discuss the level of detail in property descriptions with your agent. While agents must not provide misleading information, detailed descriptions vary. Ensure photos and descriptions are comprehensive to attract buyers.

 

6. Fees/Commission

The contract must clearly state the commission level and who is responsible for it. Since 2017, sale adverts must transparently show fees, stating whether they are the buyer’s or seller’s responsibility. This transparency aims to prevent misunderstandings and ensure compliance with legal requirements.

 

6.1. Contract

Commission is only due if a valid contract between the seller and the agent exists.

 

6.2. Who Pays the Fee?

Responsibility for the fee is negotiable. If the buyer is responsible, they must accept this. Fee fees are often integrated into the advertised price, indirectly affecting the buyer.

 

6.3. Liability

The commission is due upon sale completion. If an exclusive contract exists, the agent is owed their commission regardless of who introduces the buyer.

 

7. Code of Conduct

Estate agents in France must adhere to a statutory code of ethics, ensuring they operate with integrity, loyalty, and transparency. They must be knowledgeable, avoid conflicts of interest, and keep clients informed.

 

 

2. Selling French Property Privately

In France, approximately 40% of all residential property transactions are conducted privately, bypassing estate agents. This trend is buoyed by the high commissions often charged by agents and the global reach of internet marketing, making private sales an increasingly attractive option.

 

However, selling privately isn’t suitable for everyone. Typically, properties that fare well in private sales are smaller residential units or apartments in urban locales where demand is high.

 

If you own a large, rural property or a ‘country pile’ and wish to reach a wide market, employing an estate agent could be advantageous to present your property in the best light. Furthermore, if you aim to target local French and international buyers, utilising multiple estate agents could broaden your exposure effectively.

 

The urgency of your sale also plays a critical role in deciding your approach. If you need a quick sale, engaging several agents might expedite the process more than a private sale could.

 

Nevertheless, there’s the possibility of combining strategies—listing your property privately while also working with agents, as long as you haven’t agreed to an exclusive contract with any agent.

 

Opting to sell privately means you must take care of certain obligations, such as conducting all necessary statutory surveys. It’s also imperative to include the energy rating of your property in your advertising to meet regulatory standards.

 

Considering an auction could be a viable alternative for those under time constraints needing to sell quickly. For more details on this process, refer to our guide on buying property in France through an auction.

 

 

 3. Selling Techniques

Achieving the best price when selling a property involves more than just hiring an estate agent or posting an ad online. To sell effectively and swiftly, you need to adopt a strategy that appeals directly to potential buyers, considering the sale from their perspective rather than your own.

 

Here are some key techniques to optimize your selling prospects in France:

 

1. Desire to Sell: First, assess whether you genuinely want to sell. A half-hearted approach can deter potential buyers, as it might suggest a lack of commitment to the sale.

 

1. Estate Agent Collaboration: If using an estate agent, discuss and strategize the best way to market your property. Consulting multiple agents can provide a broader perspective on what potential buyers might expect.

 

• Property Condition: Inspect your property and address necessary repairs to enhance its value. However, avoid overly personalized upgrades that might not appeal to the general market. Properties with higher energy ratings often sell faster and for more money.

 

1. Home Staging: Maintain a balance between a clean, uncluttered appearance and retaining a homely feel that includes some personal touches. Ensure areas like attics are tidy and free of odors, especially if pets are around.

 

1. Surveys: Provide all required survey reports upfront as part of the sales contract. These can significantly influence buyer decisions, especially if they reflect positively on the property.

 

1. Advert Description: Craft your property description concisely to capture interest without overwhelming with details. Mention the construction materials used, as these vary widely in France and can be a selling point.

 

• Quality Photos: Include at least five high-quality photos, focusing on both the interior and the exterior to give a comprehensive view of the property. Highlight key features like room sizes or scenic views.

 

• Disclosure: Be transparent about the property’s condition. Full disclosure not only fulfills legal obligations but also builds trust with potential buyers.

 

1. Pricing: Set a realistic price for your property. Overvaluing can deter initial interest and necessitate later price reductions, negatively affecting negotiation leverage.

 

1. Property Visits: Schedule viewings at times that showcase your property in the best light, literally and figuratively. Allow potential buyers space to explore and ask questions to foster a positive impression.

 

Implementing these strategies can greatly enhance your chances of selling your property effectively in the French market, appealing both to local and international buyers.

 

 

 4. Offer and Acceptance

When selling property in France, the process of offer and acceptance is crucial and can legally bind both parties even before a formal contract is signed. Here’s an overview:

 

Binding Agreements: If a buyer makes an offer, either verbally or in writing, and the seller accepts, this can constitute a binding contract. While a full written contract is necessary for easier enforcement, a clear informal agreement itself can be legally binding.

 

Formal Contract Signing: After the informal acceptance of an offer, the next step is signing the formal contract. Once this contract is signed, the buyer is entitled to a ten-day cooling-off period, during which they can withdraw from the sale without penalty. This option, however, is not available to the seller, who is immediately bound by the terms of the contract upon signing.

 

Deposits: The law in France is strict about the handling of deposits in property transactions. Sellers are not allowed to request any deposit from the buyer until the formal contract has been signed and handed to the notaire (a French public official who handles various legal formalities) or the real estate agent responsible for the transaction.

 

Understanding these elements can help sellers navigate the legal landscape of real estate in France, ensuring compliance with local laws and a smoother transaction process. For specific legal cases or deeper insights into French property law regarding offer and acceptance, consulting legal resources or professionals with expertise in French property transactions may be useful.

 

 

 

 5. Statutory Surveys

In France, the selling process of a property mandates that the seller organizes a suite of diagnostic surveys collectively referred to as the Dossier de Diagnostic Technique (DDT). These surveys are crucial as they are attached to the sale and purchase agreement, affecting the transaction in several ways:

Energy Performance: This survey must be conducted before the property is advertised. It assesses the property’s energy efficiency and has a validity of ten years. Notably, properties classified as F or G for energy efficiency are required to undergo an energy audit from September 2022, and this requirement will extend to class D properties by 2025.

Asbestos and Lead: The asbestos survey is necessary for buildings with planning permission granted before July 1, 1997, whereas the lead survey applies to properties constructed before 1949. The asbestos survey does not have a regulated validity period, but the lead survey must not be older than one year at the time of sale.

Termites and Other Pests: Required in certain areas, this survey must be current within six months of the sale contract. Local authorities can confirm if a property falls within a designated zone requiring this survey.

Natural or Industrial Risks: A report on potential risks like natural disasters or industrial hazards is needed if the property is in an area with a risk prevention plan. This survey also requires updating if there’s a change in area designation before sale completion.

Gas Installations and Electrical Wiring: These are needed for older installations (over 15 years old), and their respective reports are valid for three years. The electrical survey is not required if a recent compliance certificate is available.

Septic Tanks: This survey assesses if existing septic systems meet current standards. New owners may have to upgrade non-compliant systems within a year of purchase.

Radon and Soil Surveys: Radon risks must be disclosed if the property is in a regulated risk area. Soil surveys are mandated for building land in zones at risk of ground movement.

 

The seller typically bears the costs of these surveys but are deductible from any capital gains tax liabilities. These surveys influence the negotiation process and protect both buyer and seller by ensuring transparency and compliance with legal standards.

 

Understanding the full scope and implications of these statutory surveys is critical for anyone involved in selling property in France, as it affects both the transaction process and the property’s marketability.

 

 

 6. Sale and Purchase Contract

In French property transactions, the sale and purchase contract is a critical document that outlines the agreement between the buyer and the seller. Here’s a breakdown of its key components:

 

1. Types of Contract:

Promesse de Vente andCompromis de Vente are the two main types of contracts used. Both serve similar legal functions but may contain subtle differences in terms of conditional clauses.

 

2. Drafting of the Contract:

It can be prepared by either an estate agent or a notaire. It’s generally advised for both buyer and seller to appoint their own notaire, although it’s common for one notaire to act for both parties. Notaire fees are typically borne by the buyer and are not increased by the use of two notaires.

 

3. Conditional Clauses:

These are specific conditions that must be met for the contract to be fulfilled, such as the buyer obtaining a mortgage or the seller securing planning consent. It’s crucial for the seller to understand these terms to avoid any future disputes.

 

4. Cooling Off Period:

After signing the contract, the buyer has a ten-day cooling-off period during which they can withdraw from the purchase without penalty. The period begins when the buyer receives the contract.

 

5. Deposit:

A deposit, usually up to 10% of the purchase price, is required upon signing the contract. It can be lower, and in some cases, there may be no deposit at all, though this typically involves a penalty clause. The deposit is held in escrow by the notaire.

 

6. Rates:

The taxe foncière is proportionally divided between the buyer and seller based on the period each owns the property during the fiscal year.

 

7. Fixtures and Fittings:

Disputes often arise over what is included in the sale, particularly with items that are not obviously removable or permanently fixed, like kitchen units or garden sheds. To prevent disputes, it’s advisable to explicitly state in the contract what fixtures and fittings are included. This can also be beneficial for tax purposes, as the value of these items can be deducted from the sale price.

 

Each aspect of the contract serves to protect the interests of both parties and ensure a clear and legally binding agreement is in place. It is crucial for both buyer and seller to thoroughly review and understand the terms of the contract before signing, potentially with legal assistance, to avoid future complications or misunderstandings.

 

 7. Statutory Disclosure Requirements

French property law places significant emphasis on the statutory disclosure requirements for sellers. Failure to meet these obligations can result in severe consequences, including the sale’s annulment or damages awarded to the buyer. Here are the primary categories of these requirements:

 

1. Hidden/Latent Defects (Vice caché):

This is the most crucial disclosure. Sellers must disclose any defects that are not apparent during a normal inspection but would affect the buyer’s decision to purchase or the price they would be willing to pay. Common examples include issues with the foundation, termite infestations, and risks of flooding. If the seller was aware of the defect and did not disclose it, they could be held liable, potentially leading to a reduction in the sale price or nullification of the sale.

 

2. Surface Area:

Particularly relevant for the sale of apartments or grouped properties, the seller must accurately report the internal surface area of the property. If there’s a discrepancy of more than 5%, the sale can be annulled. Measurements can be conducted by the seller or a professional.

 

3. Easements/Rights of Way:

Easements, or ‘servitudes’ in French, such as rights of way, water flow, or light, must be disclosed. These are usually binding on the property regardless of ownership changes. Both public and private easements need to be declared, with the notaire typically investigating public ones.

 

4. Tenancies/Licences:

The seller must inform the buyer whether there are any existing tenancies or licences that affect the property, as these will be transferred to the new owner upon sale.

 

5. Planning Conformity:

Any information related to planning consents or disputes must be disclosed. This includes any existing planning permissions or ongoing planning disputes.

Understanding and complying with these disclosure requirements is essential for sellers to ensure a smooth transaction and to avoid legal complications after the sale. These disclosures not only protect the buyer but also safeguard the seller from future claims and disputes.

 

 

 8. Local Searches

When purchasing property in France, local searches are an integral step in the process, ensuring the transaction is legally sound. Here’s what happens during this stage:

Role of the Notaire: After the sale and purchase agreement is signed, the notaire initiates various searches related to the property’s title. This is a crucial step that typically spans about two months.

Consultations: These searches include consultations with the local council and the national land agency. This step is vital as these entities may hold a right of pre-emption, which allows them to purchase the property under certain conditions before it can be sold to another buyer.

Sitting Tenants: If there are tenants residing in the property, they also have specific rights during the sale process. Sitting tenants possess a right of first refusal on the property, meaning they can choose to buy the property on the same terms offered to the prospective purchaser.

This phase of the property buying process is designed to clear any legal hurdles and ensure all parties’ rights are respected, paving the way for a smooth transfer of ownership.

 

 

 9. Completion Formalities

Completion formalities are the final steps in the process of selling a property in France, and they come with certain obligations for the seller, critical timing considerations, and procedural requirements:

 

Condition of the Property: As a seller, you are obligated to ensure that the property remains in no worse condition than when the sale and purchase contract was signed. Any damage caused during the removal of fittings or during the move must not significantly impair the value of the property.

Funds Requirement: Before the completion can occur, the notaire must have all the purchase funds in place. This ensures that all financial aspects are settled before finalizing the sale.

 

Flexibility on Completion Date: The completion might occur on a date different from what was specified in the sale and purchase contract. This date in the contract is usually an estimate, as the completion of necessary searches and other formalities might take longer than expected.

Seller’s Right to Withdraw: If the conditions of the contract have been fulfilled and the buyer delays completion without a valid reason (like a delay attributable to their bank), the seller may have the right to withdraw from the contract.

 

Enforcement Actions: If a buyer is unwilling to complete the purchase despite all conditions being met, the seller may need to initiate legal action to enforce the contract. The court can then order the completion of the sale or award damages for breach.

 

Signing Formalities: During the completion, the notaire will read the main points of the deed of sale. While it’s not mandatory for both parties to be physically present—as power of attorney can be granted—it is advisable to be present or thoroughly review all documents before they are signed. Nowadays, the process can also be completed online if all parties agree.

 

Transfer of Funds: After the signing, there may be a delay of several weeks before the seller receives the sale proceeds. This delay is typically due to the time required to register the sale with the land registry, after which the notaire can release the funds. Delays can also occur when funds are being transferred abroad, as notaires may require additional confirmations from banks.

 

Final Statements and Accounts: The seller should receive a final statement at the signing of the deed of sale or shortly thereafter. Once the land registration is complete, a final account detailing all financial transactions related to the sale will be issued.

 

These completion formalities are designed to ensure that all legal and financial obligations are met before the property changes hands, protecting both the buyer and the seller.

 

 

 10. Capital Gains Tax

When selling property in France, understanding the implications of capital gains tax is crucial. Here’s a breakdown of when and how capital gains tax may apply:

Main Residence Exemption: If the property sold was your main home, you are typically exempt from paying capital gains tax. This exemption applies as long as you habitually occupied the property up to the time of sale. This exemption could extend up to a year after you have moved out, provided there are valid reasons for your absence.

 

Specific Exemptions: There are additional exemptions available under certain conditions:

 Elderly Low-Income Sellers: Older individuals with low income might be exempt from capital gains tax.

 Divorced or Separated Couples: Special considerations may apply to those who are divorced or separated.

 Non-Residents: Individuals who have not resided in France but were previously residents for at least two years may also qualify for exemptions.

 

Calculation of Taxable Gain: For those who are liable for capital gains tax, the taxable amount is calculated as the net proceeds from the sale minus transaction costs. Additionally, the costs of major renovations can also be deducted, but only if these were carried out by a registered builder, which adds to the legitimacy and traceability of the expenses.

 

Fiscal Representative for Non-EEA Residents: Non-residents from outside the European Economic Area (EEA) might need to appoint a fiscal representative to handle their tax affairs in France, which can be a complex and costly requirement. This representative ensures compliance with French tax regulations and assists in calculating and paying any applicable capital gains tax.

 

It’s advisable for sellers to seek professional advice to navigate the nuances of capital gains tax in France, ensuring all potential exemptions are utilized and obligations are met efficiently.