Offer Accepted, What Next.
Offer Accepted, What Next?
We had our offer on the house verbally accepted as reported in our blog about the viewings here.
So what happens next? What is the process and what are the steps that we must take to proceed with purchase? Let’s go over what we know.
Are Offers Secure?
The first thing that I noticed, which is different from how the UK property market works, is that once a seller accepts an offer then the property is taken off the market and no further offers can be considered by the seller.
This is evident because the day after the offer was verbally accepted, the property disappeared from the agent’s website or at least the link to the property details stopped working.
We discovered that because the link we were sharing with people stopped working. So yes, our offer is secure for now.
Tip: take a copy of the photos from the agents website before they become unavailable. We did that and created a gallery here which is a collection of our own photos and those from the immobilier’s website.
No Gazumping
In the UK it is possible for sellers to go back on verbal agreements and accept higher offers from other buyers. We call that being gazumped. This can cause a lot of upset and problems for buyers, especially in competitive markets. It is very good that this cannot happen in France.
What to sign first
Our agent provided a very helpful guide on the sale process. The first step with them, is to prepare an LOI. An LOI outlines the offer with any conditions and confirms the buyer’s intention to proceed as agreed.
An LOI is not legally binding but is often used in France as a preliminary step to:
Confirm the main terms of the deal between buyer and seller (price, timeline, conditions).
Show your serious interest to the seller and the agent.
Give both parties time to finalize the draft of the Compromis de Vente (CDV).
Starting the paperwork
We received a questionnaire from the agent the next business day after our offer was accepted. This asked for written confirmation of our
Names
Address
Utility bills to prove our address
Date of birth
Copies of passports,
Employment,
Marital status with copy of relevant marriage, divorce or death certificate.
Rinancial proof of cash funding. IE statements from our savings or investment accounts.
Loan requirements. Confirming how much we are hoping to borrow to fund the purchase.
This we provided and returned the same day after work. We do not want to be the reason for any delays. We really want in if you can’t tell.
Requesting a mortgage offer
The second thing we had to get started was the mortgage application. We emailed the mortgage broker who we had already contacted. We confirmed that we had an offer accepted and shared the property details sheet that had been provided by the agent.
They then request a lot of information, everything that the agent had asked for plus much more financial information. Everything that they would need to pass to a bank when applying for a mortgage on our behalf. This included
Payslips
Last 3 months of statements for all bank accounts, savings accounts and credit cards
Tax returns
Proof of employment
Birth certificates
Tenancy contract because we currently rent our primary residence.
Current Property deeds, we have none.
Any outstanding loans, for us this was a car loan.
Property agent contact in case the bank requires a property survey
Finally the mortgage broker required a signed mandate authorising them to make applications to banks on our behalf.
All the requested documents were shared via a secure online DropBox account setup by the mortgage broker.
Again we responded the same day so avoid any delays.
Paying for help
When I previously had mortgages in the UK, they needed renewing every 3-5 years to ensure the best available rates. There are no mortgages fixed for the entire loan period in the UK. After my first mortgage, I always applied directly to banks myself and avoided paying brokers fees. However, for a French mortgage I personally consider the English speaking broker a must have service, because we are not fully fluent in French which could be a real problem with something as complicated as mortgage applications.
Similarly using the specialist Immobilier (estate agency) and their recommended notaire. This ensures English speaking support in an area where our French is not strong enough. For us we agreed that this makes it worth paying the fees. That and the other professional help they give in unfamiliar legal and financial processes.
Plus we were able to arrange viewings of 7 properties over 3 days because we had an agent acting for us. We hated the idea of having to make several expensive and time consuming trips to view one or 2 properties at a time until we found the right one.
Of course if you are not lucky enough to have budget for specialist help then it must be possible to do without it. Though use of notaires (solicitors) is I think compulsory as they deal with the legal paperwork and the government processes around property sales and registration.
Agents fees are about 6% and mortgage brokers are either fixed or up to about 1.5% if they do not get a fee from the bank. So if you are fluent in french and confident with the process you could save a lot of money by doing things yourself.
A win for the nerds
We could provide all the required information quickly to both the agent and mortgage broker because we are avid scanners. We scan every official letter and document and organise everything in shared drives on Google Drive storage. This provides easy access when needed from phone, tablet or PC. Something we have been doing for years and really reaps it rewards when we are working on legal or financial applications or tax returns.
The only thing we didn’t have readily available were bank statements. We don’t back them up because they are available online in our banks document archive, so they only toook a few minutes to download. But everything else we had, including payslips and tax returns filled by year. Yay, go the nerds.
LOI or Offre d’achat.
The immobilier, having received our documents and information, passed everything to their legal admin the next morning and they in turn sent us a draft Offre d’achat for signing early that afternoon.
Becasue Beaux Villages Immobiier specialises in finding properties for expats, they provided the document in both French and English. I ran it through an online translation tool and it seemed well done and accurate.
You should always check legal documents very carefully, make sure that you understand everything and that the facts are correct to your knowledge. Especially when spending hundred of thousands of Euros!
Checking the document, I found an error, yay me. Nothing too serious but it listing us as borrowing 30000 less than planned which would have meant spending more of our cash. So we emailed back asking for that correction which when received will sign.
Everything else defined the offer as we understood it, the purchase price was correct and the agreed inclusion of furniture was also mentioned.
The Offre d’achat document also has a clause saying that the offer is valid up to a date in 6 weeks time, indicating that the process should have moved onto the next stage by that date. This means that we should have the Compromis de Vente (CDV) signed by that date. The CDV is the first real contract, after which we pay the deposit and are confidentally moving towards final purchase.
Other Information Received
Along with the Offre d’achat the agent provided a report from the French Government website cadastre.gouv.fr which is what I would call a land report.
This report showed the following:
Map of the commune and the location of the plot of land being sold. In france it is the plot that is sold and the contents on it such as a house are part of the land purchase.
Information for purchasers about risks.
Has the property ever been covered by insurance for damage from disasters.
Land related risks, in our case it highlighted that the property is on the edge of an area of clay, which can often cause subsidence and changes in structures.
Soil Pollution in the vicinity, for use it highlight a risk of soil contamination from a petrol station 500m from the plot on the near by main road. However it has not been active selling petrol for 29 years.
Number of natural incidents that have been recorded in the commune. This listed
7 drought events, none since 2012
5 mudslides, none since 2018
Ground movement, 1 in 1999
Storm 2.
But as far as the previous DDT report shows and our chat with the sellers, the house had not been affected by these.
What Next
Now we wait to sign the corrected Offre d’achat hopefully tomorrow. This will give the sellers confidence.
We will need to be assigned a notaire, we have agreed to use the same one as the seller provided by the immobilier because they work in French and English.
The immobilier will coordinate everything for preparation of the CDV both our bits and those of the seller.
The Seller will commission a DDT technical report on the property, this is one of the most important parts of the CDV. If it finds any problems they will have to be covered by exceptions or changes to the CDV.
The seller will also have to create an inventory of all the items to be included in the sale. All the furniture, not an enviable task but necessary.
We will try to move forward with the mortgage proposal too. Technically it does not need to be complete until after the CDV but would be nice if it the offer was received by then.
There may be other things, but these are the ones we currently know about.
Looking Forward
This is more than just a house purchase.
It is buying a dream - a place in the sun for family and friends to enjoy.
It is preparing for a sunny retirement and also having our own home to return to when our time in Luxembourg ends.
We may have become a little emotionally over committed. I hope we don’t hit any snags because we’ve clearly been telling everyone about this.
We also have a grand daughter and unoffical grand daughter who have seen the photos and are very excited to come and stay. There may or may not be plans for visits in the October school holidays!
Wish us luck.
