Advertorial: RFP Director Yves Derrien talks property
Buying a holiday house on the French Riviera
The price of real estate on the French Riviera is one of the highest in France for many reasons. The sunny weather, the sea, the ski resorts, the easy access thanks to the airport, the golf clubs, the famous restaurants, and the night life are actually durable advantages for the region and will not disappear easily. Of course, one can presently doubt about the future tax reforms of the newly elected government or about the solidity of the euro. But experience has shown that these factors have little impact on real estate prices.
How does it actually work?
In comparison to many other countries, a purchase in France is made in two steps. First, a purchase agreement (compromis) must be signed between the buyer and the seller. Several conditions can be included in this contract, the buyer usually leaves a deposit of five to 10 per cent on a notaire's escrow account and the actual purchase deed is signed a few months later at the notaire's office. In the meantime, many expertise checks must be done on the state of the property. The notaire will then register the deed, which takes a fee of seven to eight per cent of the purchase price.
Is it possible to obtain financing before making an offer?
Not really. French banks can grant a loan only if a purchase agreement is already signed. Thus, it is highly recommended to include a condition before obtaining a loan. This way, the buyer has several weeks to apply and to obtain the loan. If he fails to get it within the right time frame, he can take back his deposit and does not lose anything, except the possibility to buy the property.
How much can French banks finance?
They can finance from 70 to 80 per cent of the value of the property for non-residents and from 90 to 100 per cent for residents. Estate agent and notary fees are excluded. Moreover, these fees must be financed directly by the client. French banks want to check everything about the client, so there can be a lot of docu-mentation requested depending on the complexity of the client's financial situation. They also usually want the clients to apply for loan insurance, which requires medical examinations.
Finding finance is genuine work and choosing a mortgage broker like RFP, working on the basis of a success fee, is often cheaper for the client. Besides French banks, we also work with a broad range of financial institutions throughout Europe, which can lend according to other principles and rules. Thus, we are able to provide the financing that fits our client's project the most.
Independent Financial Advisor
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