VEFA (Vente en l’etat futur d’achevement): the peculiarities of buying off plan in France
VEFA means you buy a property that is not yet built. While in some cases, construction is well underway at the time of acquisition of the property, it can also start several months after purchase. In all cases the purchase of housing will therefore take place based on a floor plan. The off-plan is an extremely controlled formula (by the law in France) and secure for the buyer.
The signing of the reservation contract
The signing of the reservation contract allows the buyer to block the unit he is interested in, in a new real estate program. The developer then cannot sell it to another person. Several elements must be mentioned in the contract, such as:
The location of the property
The number of rooms
The total area
The main features of the building
The expected date of delivery of the property …
Good to know: The deposit
A deposit of 2 to 5% depending on the date of delivery will be requested to the purchaser at the time of signing the reservation contract.
Research French mortgage funding
The reservation is effective once the reservation contract signed by the buyer and the developer, but under two conditions:
Condition 1: The buyer has a 14 day cooling off period to cancel his/her reservation. If cancelled, the deposit, if it happened, then is returned in full.
2nd condition: The buyer has a period of around 60 days to find funding (this can be extended if need be). This mortgage application concludes with a loan offer signed between the purchaser and the bank.
This French mortgage offer is then sent to the notary who is responsible for drafting the definitive sale agreement also called “acte authentique” in French.
The exchange of contracts
The signing of the deed establishes that the buyer becomes the owner of the property and the land it is on (freehold in France). The deed must be written and signed by a notary.
What are the important points stipulated in the deed?
The penalties owed by the developer in case of late delivery of the property or by the purchaser if a late payment occurs.
The provisional schedule of the French mortgage payment based on the stage of the property.
Note that the first French mortgage Payment is made during exchange of contracts at notary.
The French mortgage
Payment of the funds is carried out during the stages of construction, in several stages. They are supervised by law and cannot be modulated by the developer. They are a percentage of the price of the property according to the progress of the real estate project.
The main ones are:
35% completion of the foundations
35% for roof stage
Last stage of the off-plan process: the delivery of your ski property
Once completed the construction of the property, the buyer will take possession of the property, ensuring that it complies in all respects and shows no snagging. An important step that requires careful verification, in case of faults found, the purchaser must notify the developer within one month after delivery.
Payment of the last call for funds corresponding to the remaining 5% had occurs automatically once the delivered property is found compliant. Without last 5% payment in place, keys cannot be handed over.
Note that the date of delivery starts the various guarantees linked to buying a new property in France.