Confusion About Selling My House In England whilst buying in France

[Barbel Bob]

Hi,

Is it possible to sell your house in England whilst purchasing one in France?

We have our house up for sale at the moment with some interest but no firm offers, we have found our dream house in France but cannot buy it as our money is tied up in our English house, if we were to receive an offer this week would it be feasible to then secure our French house?

We have the money for the French deposit. How long from signing the contract and giving the deposit does it usually take to complete?

Any info would be greatly appreciated.

 

[Sunday Driver]

This is a risky situation because, as you are probably aware, the selling/buying process is different here to that in the UK.

In France, you commit to the purchase at the beginning of the process when you sign the initial contract.  In the UK, the buyer is not committed until the contract is signed right at the end of the process. 

That means that even if someone makes an offer on your UK house, and you proceed with the purchase of a French property on the back of that offer, there is no guarantee the UK sale will proceed to conclusion.  So, if the buyer pulls out at the last moment (a not uncommon occurrance), then you will be left high and dry, and unless you can organise bridging finance to complete the French purchase, then you will almost certainly have to withdraw and lose your deposit.

The timetable for completion in France can vary according to the complexity of the transaction.  A straightforward purchase of a relatively modern house can be completed on average within around 8-12 weeks.  A more complex purchase, say, involving an older property where the owner had died leaving a number family inheritors, or perhaps where planning permissions, etc are required, could extend the timescales substantially.

 

[Benjamin]

Can't you ask for a clause suspensive to be added to the initial contract stating that you are signing subject to your own house being sold and the funds being available. Of course, if I'm correct, it's up to the seller if he accepts this clause.

Maybe someone who knows a bit more can check this out.

[Sunday Driver]

Yes, you can always ask for a clause suspensive, but it's unlikely that such an open ended arrangement would be agreeable to a seller, given that he'd be obliged to turn away more substantive offers whilst waiting for your nebulous house sale to materialise.  I certainly wouldn't offer one to a UK buyer in those circumstances.

 

 

[jc]

Bridging loan??-not cheap.

[Iceni]

[quote user="Sunday Driver"]

This is a risky situation because, as you are probably aware, the selling/buying process is different here to that in the UK.

In France, you commit to the purchase at the beginning of the process when you sign the initial contract.  In the UK, the buyer is not committed until the contract is signed right at the end of the process. 

[/quote]

Don't think that I agree with you SD. Other than the 7 day cooling off period I see no difference in buyer commitment between signing a compromis de vente in France and exchanging contracts in England. BTW there is no "UK" process, the Picts do it differently to us peeps in England and Wales.

John

not

[suein56]

[quote user="jc"]Bridging loan??-not cheap.[/quote]

But, even so, bridging loans are a lot cheaper here in France than in the UK.

Sue

[Gardian]

This one has been argued over ad finitum.  The reality is that SD is quite right - technically you can be in breach of contract and be required to proceed or lose your deposit if you don't complete within a reasonable period (usually 3 mths, as SD says).

Whether the vendor would choose to invoke that penalty depends on many factors - his / her anxiety to stick with a 'serious' buyer, other buyers sniffing around, etc, etc.

Other threads on the same subject have described situations where people have been given ages to sell in the UK and finalise the Acte de Vente for their property over here - we were, but we had an understanding Brit vendor, who was prepared to wait.  It might not always be thus.

The point is that if you go ahead with the Compromis, you take a risk.  As long as you're prepared (at worst) to either forfeit your deposit or proceed with completion and fund the purchase, taking the view that your property in the UK will sell eventually ............ then fine.   

[Sunday Driver]

[quote user="Iceni"][quote user="Sunday Driver"]

This is a risky situation because, as you are probably aware, the selling/buying process is different here to that in the UK.

In France, you commit to the purchase at the beginning of the process when you sign the initial contract.  In the UK, the buyer is not committed until the contract is signed right at the end of the process. 

[/quote]

Don't think that I agree with you SD. Other than the 7 day cooling off period I see no difference in buyer commitment between signing a compromis de vente in France and exchanging contracts in England. BTW there is no "UK" process, the Picts do it differently to us peeps in England and Wales.

John

not

[/quote]

I think you'll find that my point concerned the timing, rather than the relative degree of commitment....

 

[Sidonie]

Hello,

You can still put the sale of your house in UK under "condition suspensive". Of course, it has to be accepted by the sellers.

I am an estate agent in Brittany and I had the case few month ago. I have put in the compromis ( seeling contract), " subject of the sale of Mr and Mrs...". ( it is important to give a date saying until when this clause is valid).

As it is quicker to sale a house in UK than it is in rance, usually we should have the money right on time for the fianl deed!

If the sellers accept, it is the best way to secure the house!

Bonne chance!!!

Sidonie

[Sunday Driver]

If the seller knows about the UK house selling process, then he will know that a 'sale' is never guaranteed until the final exchange of contracts.  If the seller is English, then they will know all too well that many 'offers' fall flat before they get to contract stage.  If they accept the clause, then they are risking a lot of 'dead selling time' if the deal eventually falls through because the UK house was unsold. 

If it's a French seller, then they will be used to houses taking a very long time to sell, so they may be unwilling to accept such a potential long term clause.

There have often been cases related on this forum and others, about immos and notaires being unwilling to deal with people who don't have the money available to buy the house when they come sign the compromis. No sale, no fee.....

 

[Llwyncelyn]

Dear Sunday Driver not wishing to be pedantic but of course one is committed in the UK upon exchange? Then if you do not complete you can be served with specific performance which essentially is you pay your monies for the whole amount of the purchase.

Thus if you fail to complete then theory you are subject to the whole principle of breach of contract and for the damages that flow from that.

I have in my career seen one or two cases where those who commit the breach have been made bankrupt.

Basically if you do not have funds in place do not exchange!

I still prefer the English Legal system warts and all

[Sunday Driver]

LL

I'm sorry, but I don't think you've read what I've been saying:

"In France, you commit to the purchase at the beginning of the process when you sign the initial contract.  In the UK, the buyer is not committed until the contract is signed right at the end of the process." 

"If the seller knows about the UK house selling process, then he will know that a 'sale' is never guaranteed until the final exchange of contracts."

 

 

[P-D de Rouffignac]

Sunday Driver is absolutely correct in making the point that French estate agents and notaires are generally reluctant to get involved in a (potential) transaction where a buyer - without available funds or bank loan - wants to buy a French property subject to the satisfactory sale of another (in this case British) property. Even in today's relatively slow market, sellers will not accept this sort of condition as it is an open-ended commitment that may result in the transaction not going through. Despite the niceties of English law about enforcing contracts etc, my advice is usually to walk away from transactions that involve this uncertainty, as well as other potential minefields such as mutiple inheritors who can't agree, most properties subject to planning consent, purchases en viager etc etc. I too will not accept potential buyers who do not have funds in place or a proven bank loan or offer in principle. It is a waste of everybody's time. After all, do you walk into a shop to buy, say, a new refrigerator and announce 'Well I'd like to buy it but I don't have any money'?

P-D de Rouffignac

[jc]

Plenty do and the shop makes money out of it-hire purchase and extended credit!!!

[Llwyncelyn]

Ok Sunday Driver I do agree that in the UK and until the final signatures the buyer is not committed to the purchase?

However I would suggest that in 90+% of contracts then the evidence shows that following exchange contracts go through without a blip.  Thus you are correct in your statement but I would argue that you are indeed committed to the terms and conditions of the contract at exchange.  What you are essentially saying is that at the end and when you pay the final say 90% then that is when it is all wrapped up.  Of course it is stamp duty the lot fees etc handing over keys but legally I say you are committed at exchange unless of course there are clauses on exchange which restrict or limit completion or let us say an Act of God.

However I do not think its important to discuss the niceties of English Law of Contract I did that so very long along and still have the updates to the textbooks coming in daily.

For those who are interested in the UK in buying jointly have a look at Barclays Bank v O'Brien it spawned many of todays husband and wife contracts when buying houses in the UK and borrowing against the family home by one but not the other spouse.

But again probably not of interest.

However SD here just personal experience and up to date experience here in France of our house selling.

We have agreed to sell to individuals within the EC.  Completion January 2008 clauses such as purchase dependent on bridging loan and no deposit on signing but only when confirmation of bridging loan in place. Thus no monies whatsoever payable in advance only when the purchasers know they have the cash in their back pocket.

Lots of ways to skin cats.

rdgs

[Sunday Driver]

Sorry, but I don't understand where you are coming from here.

You agree with me in that until the final signatures, the buyer is not committed to the purchase.

You confirm that I am correct in my statement, then you go on argue that you are indeed committed to the terms on conditions of the contract at exchange.  If you agree with me, then I don't undertand why this is being argued.

I never mentioned anything about things being wrapped up when the 90% is paid over.  That is an event that happens after the exchange of contracts and is irrelevant to the point under discussion....

 

[Llwyncelyn]

Ok Sunday Driver I was trying to be polite and obviously in doing so I confused issues.

Let me now tell about English Law and the contracts in writing for a sale of a property.

When enquiries before contract have been completed and to the satisfaction of the purchasers they then are expected to pay the 10% deposit.  At that stage their are committed to the deal.  Fact legal fact what follows later is a direct result of the exchange of contracts between the parties.

I say that upon exchange it is binding and what follows later is just tying up the loose ends.

I hope that is clear for you and indeed to you.

So I disagree totally with your view absolutely so do we now please understand each other.

I will not enter into any further discussion on this point and if you wish I will point you to standard first year law of contract.  Indeed as a gift I will send you the textbook.

[Sunday Driver]

Llwyncelyn

I have no idea how we have gotten to this stage in the proceedings......

My simple point in response to the original poster's enquiry was that a UK house sale was not a 'done deal' until the contracts were signed and exchanged.  Any 'offer' accepted before that has no legal standing and can be withdrawn right up until the moment that the contracts are signed by both parties.  That is the fundamental risk faced by the OP in their situation and the simple essence of this thread.

That is fact under English law and the contracts in writing for a sale of a property, and that point of law is what I based my reponse upon.  We appear to have no dispute about that.

What follows after exchange of contract, ie the tying up of loose ends, is also not in dispute.  What is in dispute is the relevance of your introducing this aspect to the thread.

Given the above apparent convergence of our understanding of the law, I would have welcomed a clear explanation as to why you disagree totally with my view absolutely.

However, I respect your preference to withdraw from the discussion, but please - don't patronise me by offering to send me a copy of the standard first year law of contract.  I already have my own copy, thank you.

 

 

[Pommier]

[quote user="Sunday Driver"]

a UK house sale was not a 'done deal' until the contracts were signed and exchanged.  Any 'offer' accepted before that has no legal standing and can be withdrawn right up until the moment that the contracts are signed by both parties. 

 

[/quote]

That happened to us quite a few years ago in the UK. Everything went great until the buyer was about to sign and contracts be exchanged, when suddenly the buyer announced he wanted £5,000 off the price or he'd pull out of the deal. Because we'd gone so far with everything and were also ready to exchange on our new home we reluctantly gave in (although I sincerely hoped he had no good fortune in our old house!).

I much prefer the French system because at least everyone knows where they stand. 

[AnOther]

Ditto to a friend of mine just a couple of months or so ago. At the point of exchange of contracts the seller demanded an extra £6500 which my friend neither could, nor would, pay upon which the seller declared himself bankrupt.............!

[AnOther]

[quote user="Sunday Driver"]There have often been cases related on this forum and others, about immos and notaires being unwilling to deal with people who don't have the money available to buy the house when they come sign the compromis. No sale, no fee.....[/quote]During the signing of our compromis the Notaire presented me with another piece of paper to sign confirming that I was in a position to purchase, i.e. I had the money. For me it was not a problem because it was already in the bank.

Apparently this is not normal though ?

[Sunday Driver]

Now that you mention it, Ernie, I recall having to sign a note confirming that I had the necessary funds in place and that the sale would not be conditional upon me obtaining finance.  I recall it being headed up with some reference to one of the legal codes - but don't ask me to go and find it....[;-)]

 

 

[Will]

Some French agencies may do things differently but Mrs Will's will NEVER accept an offer from a potential buyer unless finance is in place and ready to go, whether cash in the bank, an agreed mortgage, or prêt relais (French equivalent to an English bridging loan, which actually works very well indeed). It may p*** off some buyers, but that's life in France I'm afraid.

[Gardian]

Here we go again!

'Llwncelyn' keeps quoting UK Law over all this. UK Law is totally irrelevent to the OP's thread.

As SD, me and others are trying to batter home, the issue is whether a purchaser in France has got the funds in place when the vendor says "Completion now".  The gap between the Compromis & Acte de Vente is negotiable, but there's a limit, unless agreed & in writing.

How you (as a purchaser) raise the funds matters not a jot to a French notaire or the vendor. If you've sold your UK property, then fine: if you have to bridge, then that's your decision.

So ........... just to be clear, UK Law doesn't figure in all this, OK?