Signing the Compromis
Offers are usually given verbally, via the estate agent, from buyer to seller. The seller can either reject it or come back with a counter-offer. A price is agreed over the next few days or the parties decide to walk away. Once a price has been agreed, if one of the parties is not in Nice then the buyer makes a written offer which is then faxed or a scan emailed to the seller, who counter-signs it and then returns it. No matter how the offer is worded, it is not legally binding. It acts as a memorandum of understanding until both parties sign a Compromis de Vente, either in person at the estate agency or Notaire’s office, or by post.
The buyer always signs the Compromis first. It is then counter-signed by the seller. As the seller, the moment you counter-sign you are immediately committed to the sale. You cannot change your mind and you cannot change the price. It is important you are happy with:
- the price – ensure you distinguish between where it is marked “prix de vente” which is the total sale price, and “prix net vendeur” which is how much you will receive. The difference between the two is the agency fee, which will also be clearly marked.
- method of financing – if the buyer waives the right to a mortgage then after ten days the sale is safe. If the right to a mortgage is maintained the process could drag out up to a couple of months and the sale still fall though.
- final signing date – this should be a couple of months after the date the offer is accepted, up to three months if falling over holidays or Christmas. The actual signing date falls between when the Notaire can complete the paperwork, minimum a month, and when the buyer can transfer the money into the Notaire’s bank.
- any furniture – this can be written into the Compromis itself or if a long list annexed on a separate sheet of paper. A value should be attached to the furniture, as the more it is ‘worth’ the less capital gains you pay.
You should make these points clear to your agent before he writes the Compromis de Vente. The agent may have the buyer in the office and a limited window of time to secure a signed Compromis. Any subsequent changes changes may have to be done by post and as each needs to be personally signed by both parties, no fax or email allowed, this could incur lengthy delays.
Once the Compromis is signed by both parties, the buyer should transfer his 10% deposit to the Notaire account. After this you must first wait for the escape clauses to expire, ie the ten day cooling off period and the right to get a mortgage, and then for the buyer to choose a signing date.
If the buyer does not use one of the escape clauses and the final date approaches with no date chosen, you can ask the Notaire to force the signing on or just before the final date. The buyer must have the money in the bank by the final signing date and be available to sign otherwise the 10% deposit is forfeit and given to the seller. The Notaire is an independent arbitrator, and so if the delays are clearly not the fault of the buyer then the Notaire may decide to push back the final date. For instance new anti-money laundering laws can cause significant and unreasonable delays for bank transfers from some countries, and it is not unknown for a mortgage company to simply forget to post documents. However hard on the buyer, the rules are in black and white and if the buyer does not pay by the agreed date then they lose their deposit to the seller. No appeal is possible and no court action will make any difference.