Buying your dream property in France
Living in France offers a high quality of life with its rich cultural heritage, excellent healthcare system, and strong focus on work-life balance. The country is renowned for its cuisine, sense of community, and vibrant cultural atmosphere.
Whether you're purchasing property in Paris, Provence, or the French Riviera, Centura FX provides currency services to minimise overseas currency risks and to help maximise the value of your property transaction.
Explore the process and steps for owning a French Property.
Make an offer
With the help of an estate agent, view and find your dream property. Once you’ve found it, the first step is to make an offer. An estate agent will use their expertise and help you with the required negotiations when making an offer on a property.
Appoint a Notaire (notary)
Next, you’ll need to appoint a notary or "notaire" in French. A notary is a legal specialist appointed by the Minister of Justice to draw up contracts on behalf of the buyer and seller in a property transaction. They ensure the legality and authenticity of the deed and provide complete information on the agreement's nature and consequences. Notary costs can depend on the property's age, ranging from 7% to 10% for existing properties and 2% in conveyancing fees for recent/new property developments, excluding estate agency fees. Notary costs are paid by the buyer and split 50/50 if there are two notaries involved.
Preliminary Contract “Compromis De Vente”
Before final contracts are authorised, a pre-contract needs to be signed – the “compromis de vente”. This involves a 10-day cooling-off period during which the seller is prevented from accepting other offers. You will need to provide various documents such as birth/wedding certificates, copy of passport and details of the mortgage if borrowing funds.
Pay deposit
After the preliminary contract has been signed, you’ll need to transfer a deposit of 5 to 10% of the agreed property price to the notary. This sum will be held in an escrow account until the final transaction. The timeframe between the seller accepting the offer and paying the deposit is when currency fluctuations can potentially alter the deposit amount with potential losses being experienced.
For example:
A buyer needs to make a 10% deposit on a property worth €500,000 Euros (€50,000).
If the GBP/EUR exchange rate is 1.15 EUR, the buyer’s deposit is £43,478.26. However, if the GBP/EUR exchange rate moves to 1.10 EUR before the deposit is made, the buyer would need to pay a higher amount of £45,454.55.
Forward contracts are great ways of mitigating this risk by helping you to lock in an exchange for a period of time removing any potential currency fluctuations.
Final contract "Acte Authentique de Vente"
The completion of paperwork typically takes 2-3 months, after which you will need to visit the notary's office to sign the "Acte Authentique de Vente" deed of sale. This marks the legal handover of the property. The funds required to cover the notaire's fees must be transferred prior to contract signing.
If you’re buying the property outright, the remaining balance of the property price (90% to 95% depending on the deposit paid) along with the fees must be paid through the notary's escrow account.
The period between paying the deposit and settling the final balance can also expose you to currency fluctuations, which may result in potential financial losses.
For example:
A buyer needs to pay the remaining 90% payment on a property worth €500,000 Euros (€450,000), and the GBP/EUR exchange rate is 1.15 EUR. The buyer's final balance would be £391,304.34.
However, if the GBP/EUR exchange rate drops to 1.10 EUR before the final balance is paid, the buyer would need to pay a higher amount of £409,090.90.
Forward contracts can help you manage currency risk by allowing you to fix an exchange rate for a set amount of currency, to be delivered on a future date. This eliminates the uncertainty of potential currency fluctuations.
Time to Celebrate!
Congratulations, you are now able to collect the keys to your new French property.
Contact Us
Centura FX specialises in currency services for overseas property transactions in France. We provide competitive exchange rates and services to minimise currency volatility, thus helping buyers maximise their property transaction values.
You can arrange a call with one of our specialists or contact us directly by calling 0203 871 9830.