“Kathleen, I have purchased your book How To Buy Real Estate Overseas and I have done a tremendous amount of research and reading regarding buying a property in France. I have been to the location where I would like to buy a holiday home (Landuedoc-Roussillon) several times. Most recently this past September for three weeks. In fact I have a very good friend who lives in the region who is French, born and raised, speaks fluent French and English.
“All this being said I must tell you what a tremendously frustrating and exhausting process this has been. I have a very sound financial situation. Gainfully employed with a quite a large salary. I have virtually no debt and plenty of money in savings and liquid stocks yet I have been treated like a shady character begging for a handout.
“I have contacted several mortgage brokers. Each gives me a different story. One quoted fees of over US$20,000 just to arrange a loan. Then there are the mortgage application fees, deed registration fees, real estate agency fees, all which fluctuate with no rhyme or reason. The French banking requirements are unreasonable, account limit of 30,000 euros (US$40,000).Then as I’m sure you are aware but don’t get specific about in your information are the notaire’s fees. For a 259,000 euro property I was given the fee of 18,800 euros. That is about US$25,000. Shocking to say the least.
“This process has been daunting! The word that comes to mind is disappointment.
“If you could provide some insight, clarity, anything to assist me in this process it would truly be appreciated. I am at the end of my rope. My dream of having a French holiday house and possibly a place to retire is quickly vanishing!”
–Pamela H., United States
When purchasing property in France, you’ll incur notaire fees (around 1%) and a transfer tax (5.09%). Those two fees together would amount to less than 18,800 euros based on the purchase price you reference.
In addition, you’ll have the real estate agent’s fee, which may or may not be included in the agent’s list price. Typically this is disclosed up front by the agent (whether the fee is bundled in the list price or not); however, if the agent doesn’t detail this, you should ask. Agent fees are usually in the range of 5% but can be negotiable.
A mortgage broker in France should charge you 1% of the mortgage amount, though for a small mortgage, the fee may be greater.
The problem in France and many other places where it has been possible for nonresident foreign buyers to borrow locally for the purchase of real estate in the past is that banks are not so interested in lending to you right now. We were unable to get a mortgage in France for the apartment in Paris we purchased earlier this year…though we were able to borrow from a French bank for the apartment we bought in Paris eight years ago.
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