Posted by Matthew Andrews on October 12th, 2016.
The uncertainty surrounding ‘Brexit’ and the fall of the Pound is making the cost of living more expensive for those who rely on an income that originates in the UK – a circumstance that is a cause of worry for many expats, with some considering returning home.
The UK economy spent the latter half of 2016 in turmoil as Britain’s vote to leave the European Union caused chaos in financial markets and the value of the Pound to sink dramatically. While this means people moving money overseas are likely to see less of a return, with GBP recently hitting a six-year low against the Euro, those willing to part with assets abroad could make significant gains on their investment.
Is you’re thinking of making the most of market conditions and selling your property in France then we have a handy step-by-step guide ready to help you.
This is one of the biggest decisions to make whenever selling a property, do you wish to sell your home privately or through an agency? Selling privately will allow you to maximise your profits from the sale, but it can require a lot of your time and effort to be successful. Alternatively, selling through an agency will allow you to relax a bit more as they do most of the leg work but in exchange they will take a percentage of your sale profits.
If you do choose to go with an agency make sure that they operate internationally as you’ll be missing out on a huge potential market if they only operate domestically.
For those who have made the decision to go it alone, you need to make sure that your property is seen by as many people as possible and that those who do come to view it fall in love.
When advertising your home be sure to provide plenty of high quality photos emphasising the key parts of the property while making sure to give the buyers an idea of the general layout. Also think about investing in a professional photographer to help set your photos apart from the rest.
When it comes to visits be sure to stage your home, remove personal pictures and any clutter. You want potential buyers to be able to envisage it at as home for themselves, and not feel as though they are guests in someone else’s.
When selling your property in France you are required by law to give the buyer a copy of the required diagnostic reports (more on that below) to review.
While this is not actually required until an offer is made, it is advisable to have them ready before hand. This means that, should a potential buyer or their agent ask about the state of the utilities in the property, you will be able to provide an answer and not appear to be uncommitted to the sale or hiding something by not presenting them.
Likewise it is important to make sure any necessary repairs are done – not only as the buyer is likely to lower their offer as they over calculate the cost of repairs – but also because they may perceive the buyer to be short on funds and desperate to sell.
Finally it is important to have your plan cadastral (land registry) to hand, to help resolve any issues they may have over your property’s boundaries.
It is worth keeping in mind that those buyers who ask you the serious questions about the property are probably the ones most interested in actually purchasing, so you need to know the answers!
Upon making an offer the buyer will contact their notaire (notary) to prepare a compromise de vente/promesse de vente (purchase agreement). You can also involve your own notaire if you wish, as both notaires will share the one fee. Should you need a notaire you can look here to find one who speaks your language.
Remember to ask for a copy of the buyers ‘simulation de finance’ if they are going to be getting a mortgage to purchase the property as it shows that the buyer has begun the buying process and also that the bank is willing to process their application for credit. You don’t want to find out a month later that a sale has fallen through because the bank was unwilling to approve a mortgage.
After a ten day ‘cooling off’ period following the signing of the compromise de vente, the buyer will pay a deposit for 10% of the agreed sale price, to be held by the agent, legal advisor or notaire.
The seller should make sure that they are happy with the terms of the contract before signing, as once the contract has been signed the seller is committed to the sale and can only back out by returning the buyer’s deposit and paying an additional 10% as a penalty fee.
The Dossier de Diagnostic Technique (DDT) is the name for the various reports and surveys you will need to have done in order to legally put your house on the market. Below is a list of checks you will need to get done.
Make sure whomever you hire to perform the surveys has a Comité d’accreditation français (COFRAC) accreditation. The DDT’s will likely cost you a few hundred Euros but the cost is deductible from any capital gains tax you may have to pay.
Here it is, the final stretch. So long as the property is in the same state as when you signed the compromise de vente and all the required purchase funds are in place, then you should be ready to head to the notaire to sign acte authentique (transfer deed).
It is quite likely that the completion will not take place on the date outlined in the compromise de vente, but don’t worry as this is quite normal whenever bureaucracy is involved, delays are sure to follow.
The final signing of the acte authentique will involve the notaired reading the main points from the deed of sale and requires both parties to be present, unless you have granted the power of attorney to another representative. This is well worth doing so you don’t need to worry in the event that date of signing is delayed and you cannot commit to being available for a rescheduled date.
If you are not an EU resident and should the value of your property exceed €150,000 then you will be appointed a représentant fiscal accrédité des non-résidents (fiscal representative). Their role is to make sure that the correct amount of tax is being paid by the seller during the sale and transfer of ownership of the property.
This is worth keeping in mind for those UK expats who are undecided at the moment as you have a little over two years to sell your house if you want to avoid this extra condition.
Now that your sale of your French Property is finally complete, you may need to transfer your funds back to the UK, and there are vast savings to be made here depending on how you choose to transfer your money.
There are two main options when it comes to transferring your money, these are via your bank or with a currency broker. While using your bank may be most people’s first option, you may find that using a currency broker is actually a more convenient and cost-effective choice.
Most banks will charge transfer frees when moving your money, whereas some currency brokers don’t. Brokers will also offer more competitive exchange rates and a range of specialist services such as the ability to fix an exchange rate for up to two years before a transfer, so you can be sure to get the rate that you budgeted for.
In ensuring that you get the most competitive exchange rate and bypass any costly transfer fees, your French property sale could be worth thousands more when transferring funds back to the UK.
If you’re considering putting your French property on the market in the near future, find out more about your currency transfer options.
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