How is a real estate transaction done? :
A sale is considered as sealed when one agrees on the matter in question and on the price.
After several visits to a house or apartment, the purchaser might buy the property at the actual price or draft a purchase offer, with the help of the estate agent.
As for the owner, he is not in a position to refuse to sell the property at the proposed price. Where there may be a price below the advertised price, the owner can either accept this offer or else make a return proposal to the purchaser, who, in turn, may make a new offer, until the point where a price agreeable to both parties is arrived at.
The sale is then considered as sealed and all the stages that lead to the official signing follow one upon the other:
- 1- The Signing of a preliminary contract of sale may be done either at the estate agent's office or else in the notary's office (to be noted: it is highly recommended, so that the seller's liability is not engaged, that all the property diagnostics of the house or apartment are up to date at the moment of the preliminary agreement). This document has the role of defining the basic conditions, of fixing the date of signature for the final act of signing, and of making mention of all the parties involved.
- 2- The purchaser must make a guarantee deposit of 10 % maximum of the price of sale, made out to the notary (or to the Estate Agency, if this same possesses an escrow account). This deposit will be deducted from the total price to pay.
- 3- The preliminary contract of sale is sent by registered letter or delivered by hand to each of the signing purchasers.
- 4- On receipt of the preliminary contract, the law allows for a 7-day cooling-off period to the purchasers, who have the faculty of going back on their decision to purchase within this period of time (the SRU Law), without any onus being placed on them to justify their decision and without any indemnity being due to the sellers or to the estate agency.
- 5- In the case of a request for a housing loan by the purchaser of the property, the preliminary contract will be subject to a hanging clause dependent on the loan being agreed to which, will render the sale null and void in the event of the purchasers having endeavoured to their utmost to obtain a bank loan but this being without success. In this context, the purchaser or purchasers have a period of grace of 1 month to file their dossier with the banks and must, within this period, supply the estate agency or the notary with proof of the deposition of a loan.
- 6- The loan dossier must be agreed to within the 45 days following the date of signature on the preliminary contract of sale.
Other hanging clauses, such as the pre-emptive rights of purchase enjoyed by the local town council (Town councils have the right of first refusal over other purchasers in the acquisition of a property), the planning report, mortgages, etc., should be cleared before the final signature, but they are, in essence, administrative formalities which, in nearly all cases, are carried out.
- 7- At the end of this period, the notaries put together all the documents necessary to complete the sale, summon the purchasers and the sellers for a repeated declaration of their respective intentions and proceed to the definitive sale of the property by deed.
- 8- On the day of the final signature, the transfer of the property is done, and the new owners should not fail to insure their property. The Property Tax for the current year will be calculated on a pro rata basis and the sellers reimbursed in proportion.
Payment of the cost of the transaction, as well as notary fees, are made exclusively by way of bank transfer, directly to the notary, who will pass on his share to the sellers and pay the entirety of the Estate Agent's commission.