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Financing your Purchase
The Cost of Your Purchase
Besides the cost of the property itself you also need to factor in other costs that relate to mortgage or professional fees. Here is an overview of the different fees you need to consider while buying a property.
1. Purchase Deposit - On the day you sign the Compromis de Vente (Promess to buy) you will be required to pay your deposit, which is usually 10% of the purchase price for older properties. It is advisable to pay your deposit cheque to the Notaire or agent who is representing you and not to the vendor. The deposit is held by the Notaire or the agent until completion.
2. Mortgage Deposit - The minimum amount you need to provide as your deposit for a mortgage depends on your nationality, the country you live in and where you pay income tax. For tax payers in France it is possible to arrange a 100% mortgage. For non French nationals, you would usually need to provide a deposit of at least 30% of the purchase price depending on the lender. You should speak to an independent financial advisor who can help to find you the best deal available for your needs.
3. Notaire Fees - The cost of legal fees and associated taxes on an existing property to be around 7,5% of the purchase price approximately. Fees due to the Notaire can only be funded by a mortgage for French tax payers and you will have to fund them yourself if you pay tax abroad. The Notaire fees pay for the land or property registration (stamp duty) and the actual payment to the Notaire for his services. All Notaire fees are calculated on the same basis, so you cannot ‘shop around’, although you are free to choose your own Notaire.
4. Agency Fees - An agent’s selling fee is 6 %. It is usually built into the sales price and paid by the vendor from the proceeds of the sale, but there is no hard or fast rule. The important thing is to make sure that the price stated by the agent is the price that you pay.