Purchasing a Home in France - Part III (Taking the plunge - The Notary, the Agent, and the Broker) 

Chantilly, France

I reckon that in real estate transactions just about anywhere in the world, there is a basic human need to involve a neutral third party to act as a referee between the buyer and the seller. It must have something to do with the relatively large sums of money changing hands between individuals, the sentimental importance attached to ones place of dwelling, and the resulting emotions which can potentially run high between the parties.

In France, the role of the neutral third party is the exclusive domain of the notary.

My guidebook pointed out that a notary, as an agent of the French state, does not necessarily work in the interest of the buyer. It further cautioned that the notary does not verify or guarantee the accuracy of statements made by the seller or protect the buyer against fraud. Reading this made me uneasy and uncertain whether I needed to hire an additional party that I could look to for some advocacy such as a lawyer. Karine took a more positive view of the notary and saw the hiring of a lawyer as an unnecessary expense and I eventually relented.

Coming from North America, I was more familiar with the term "notary public" and made the mistake of confusing the two disciplines. In the U.S., I had had the occasion of calling upon the services of a notary public when I needed to have my signature notarized for some official document. I got the impression then that carrying out the function of a notary was something people did in addition to an unrelated full-time job which allowed one to supplement one's income. I did a quick check on the internet and discovered that I was confusing the role of a public notary which, from what I gather, is basically an Anglo-Saxon concept with that of a civil-law notary which is more common in Latin based cultures such as France and is more closely related to the legal profession.

We accepted the seller's proposition to work with his notary as we hadn't any other recommendation for a notary in relative proximity to the location of the apartment. We decided that hiring our own notary to work with the sellers notary was unnecessary and would only serve to complicate and slow down the purchase process.

By sending our e-mail to the realtor on Sunday, we had effectively set in motion the process of buying the apartment. The notary needed some time to draw up the compromis de vente which sets out in legal terms the identities of the parties, the description of the property, the selling price, the selling fees (which go to the notary for services rendered), the agent's commission and the obligations of the buyer and the seller towards each other including the financing plans of the buyer. The signing of the compromis de vente is accompanied by a substantial deposit which commits the buyer to follow through or forfeit the deposit unless certain exceptional conditions are met.

I couldn't say I understand why, but setting out the value of any furniture sold with property in the compromis de vente has the effect of reducing the notary's fees and is very much in the interest of the buyer.

Five days after our first visit of the apartment, we were sitting at the table with the owners, the notary, and the agent and signed the compromis de vente after having gone over it in detail. One check with a deposit against the selling price on the order of ten percent and a second check with an advance on the selling fees are made out to and handed over to the notary at this time.

There is often a "cooling off" period associated with the signing of contracts in France and the compromis de vente is no exception. The buyer has seven days starting from the delivery of the registered letter from the notary. But I never really thought twice about what I had signed up for and the deadline came and went without any regrets.

The compromis de vente describes the property, the buyers financing plan, sets out the obligations of the seller towards the buyer and vice versa. I based the financing plan on a simulation I had made with my bank a few weeks earlier in trying to determine my credit worthiness in France. The interest rate the bank proposed was not the most attractive and the real estate agent realized quickly that there were better financing options and directed me to a broker that she was familiar with.

After signing the compromis de vente, obtaining financing becomes very important because written into the contract is a deadline which must be met for obtaining a financing offer from a bank. In my case, I had a deadline of February 13 to secure financing or risk losing my deposit - not a negligible amount of money.

But by now Christmas had come and I needed to make the annual trip back to the US to spend a week with my family. But I was back in time to start the new year in France. Karine and I had made an appointment to meet with the broker in the first days of the new year.

The broker did, in fact, come up with a financing proposition that was more promising than anything previously proposed by my bank or could be matched by Karine's. As a secondary strategy, I also made an inquiry at an organization recommended by my company which provided a similar service to the broker and were thus able to make a comparison between multiple propositions.

In organizing financing, you need to be prepared to give out a lot of personal data to financial institutions including bank account statements, pay statements, proof of residence, passport and residence permit, past tax declarations, information on ongoing loans, and also a copy of the compromis de vente.

We needed to sign a mandate with the broker and pay fees in escrow. We learned that in obtaining financing it's important to be aware of all of the costs of borrowing money especially those in addition to the interest rate such as insurance costs
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