Wednesday, August 27, 2008

Paying for your new house
Information for Buyers

Payment for your new house is nearly always done by Bank transfer to the Notaire's account. Notaires do not often accept payments by cheque or cash as they have to comply with the money laundering regulations. 

It is not necessary for you to open a bank account in France to pay for the house purchase. However, you will need one soon after to pay for services, insurance etc.  Very few estate agents are entitled to receive deposit payments. Make exhaustive enquiries if your agent requests a payment to be made to him.  Under NO circumstances should a deposit be paid to the vendor!

Transfer of funds to the Notaire in France

Whatever your UK bank may say about the speed of electronic transfers, transfers to Notaire's bank accounts nearly always take five or more days because of money laundering checks.

Using your own bank is perfectly acceptable, but unfortunately few UK local branches actually understand the procedure at the French end, and a small mistake can make the process doubly long, perhaps passing the due date.

Use a currency dealer.

We recommend that you use a currency dealer who knows “the ropes” and better still to use a dealer who knows about the house buying system in France. You fix the exchange rate in advance so you know exactly how much you will have to pay in sterling to buy the euros. You could lose a lot of money by not taking this advice.

The deposit:

The first payment for your French purchase is the deposit, usually 10% of the quoted price, normally due 3 or 4 weeks after your offer has been accepted - the due date is in the compromis.

As the compromis clearly sets out the dates by which payments have to be made, it is best to be prepared so make your enquiries in good time.  In general French vendors attach considerable importance to the timely payment of the deposit and balance.  Late payments may result in the property being put back on the market.

The final payment

This is theoretically not due until the signing of the final acte, but Notaires are unwilling to agree a date for the signing until the funds are in his account.  So be prepared to pay the balance of the funds well before the final date stated in the compromis, or earlier if you want to sign before that date. Sometimes an intervening bank will make a small charge for the transaction, so it is a good precaution to add 50 € to the amount due to cover this, for the notaire cannot complete the sale until he has all the funds.