I’m sure readers have been waiting with bated breath, wondering whether we were able to move into our new apartment for Christmas (see An American in France goes house-hunting: how different is it from in the US?). After submitting all of the preliminary paperwork to our broker, and signing an intent to pay the brokerage fee once the loan was finalized, we thought it would be early fall by the time we moved. After all, it was end of July. Well, here’s what happened …
After our meeting with the courtier (mortgage broker) at the end of July, he told us it would take three weeks to get loan offers from various banks. Oddly, within 5 days, an email popped up in my Inbox with the subject “Votre Projet Immobiler”, outlining one offer with stipulations. It wasn’t our dream mortgage by any means and we questioned our broker about it, and inquired about other proposals. Here’s where it gets strange, the broker acknowledged he received other offers (remember, this was within 5 days) but instead of sharing that information with us, he distractingly showed us his confirmed registration for Ironman France (knowing that my wife and I have each completed it). Then he returned to the subject of the impending vacances, those nasty but necessary August holidays that bring the country to a standstill. At this point, if we didn’t move forward, we jeopardized losing our dream (and within our budget) apartment. On July 27th, with heavy hearts, we agreed to accept this offer and were told that we’d hear directly from the bank soon to set up the initial appointment … to “get the official paperwork started”.
By August 10th we had heard nothing. The realtor was calling us for updates and, uncharacteristically, was losing his patience. We sent an email to our broker and he said: “Everyone is on holiday at the bank. We are trying to book an appointment.”
This was followed immediately by an email from his assistant, a PDF document outlining the basic terms of our mortgage, to be signed and sent back ASAP.
We looked at the form and noticed the mandatory life insurance indicated 100% coverage, not 75% as quoted in our offer.
My reply by email: “Please double check this figure.”
Broker: “It’s correct”.
I cut and paste the broker’s original email with the offer stating 75% and hit send.
(... Broker typing): “I have made a mistake. They are asking for 100% and so your monthly mortgage will be €50 more.”
Me: “Expletive, expletive, expletive” …
At this point, we are cornered. We’ve lost too much time.
Broker: “Wait, I ask for your discretion but another offer has just come in, so let’s go with that.”
This “sudden” offer was a savings to us of €10,000.One can imagine the total confusion at this point.
Meanwhile our registered envelope from the notaire arrived on August 10th and our official 8-day cooling off period had begun. After this point, we could be financially liable by penalty.
My wife had enough of it all. She gave the broker 24 hours to have a concrete offer and meeting arranged with the new bank or we would pull out. My heart sank; I loved that apartment. But without my wife’s attention to detail and tenacity, we would have ended up legally tied to an unfavorable mortgage, and I doubt the deal would have gone through in time. If the whole thing had been left to me, I probably would have ended up with a handful of magic beans by this point.
Within 24 hours, the new bank called us and we were set to meet. I thought it would simply be a matter of signing on the dotted line and getting in touch with the buyer to find out when we could get the keys. Mais non.
Now we had to go to the bank that was approving our mortgage to start the process for the loan application. Usually this is done at a bank’s habitat conseil (head office) before you choose your local branch, but as it was les vacances and time was of the essence, our first meeting was at the branch that was closest to (hopefully) our new place. This was all about filling out questionnaires for the mandatory insurance. Based on these forms, the insurance company can ask you for supplementary information or to have a check-up (keep any medical bills incurred as they should be reimbursed) and, depending on whether either of these actions is necessary, this could hold up the entire procedure.
When we asked if it would take about a month from this point to finalize everything, our new bank manager scrunched his face hesitantly. We still had to wait to receive the official offer by mail, which could take several weeks, then there was another cooling-off period of 11 days before you can accept the loan. From there, an appointment has to be made with a busy notaire for the buyer and seller to sign the final acte, and this can take another month.
We had a second two-hour bank meeting to move our accounts over to our new bank (standard practice in France) and set up apartment insurance, which was a condition of the offer. Our excellent new bank manager told us that the person in charge of processing our mortgage at the habitat conseil, with whom we should have met with from the beginning, returned from her August holidays but broke her toe first day back and was now off on sick leave. But we were assured that the mortgage had been transferred to credit services for contrôle et édition des offres de prêt.
Having Googled this term, I came across various forums where some would-be buyers have a three or four month wait just for this portion of the process. Essentially, all loan documents in France are the same text but certain elements are “edited” with your specific sums, coordinates and, if applicable, conditions.
We received the official offer on September 16th, and taking into account the Sunday within the eleven-day waiting period, we signed off on the 28th. It’s worth noting how buyer-protective these documents are, with clauses allowing for limited missed payments and the possibility of renegotiating the terms.
One last hiccup was a typo on the mortgage offer regarding our street address, which meant that there was a potential risk that the entire process would have to go back to square one. Fortunately, a few phone calls seemed to indicate “let’s just look the other way”.
Everything financially was ratified by mid-September and all we needed was the notaire to call us in with the buyer to do a once-over with the paperwork and get the keys. Time wise, it looked like we could move in anywhere between the end of September and Christmas. I wasn’t too concerned with how long the final step would take but I was worried about how we were going to coordinate moving out with our landlord without incurring any penalty. Since our landlady had been trying to illegally raise our rent and stick us with mysterious charges that we had never heard of before, I wasn’t looking for any favors from her. In fact, I was quite convinced we would end up paying rent and a mortgage for one month (which I have since learned wouldn’t happen in this country).
The final meeting with the notaire and the buyer took 4 weeks to set up after we received the offer in the post. Days before the rendezvous, you have the déblocage de fonds from your account, whereby the bank puts the entire amount of the loan in your bank account before it is transferred to the notaire. I was going to pop off to the casino to play double or nothing but, unfortunately, I don’t even know the pin number to our account (you forget a code once and get blocked from your account, and the Missus is unforgiving).
The final signing went off without a hitch. It was really more of a formality. We met at the notaire’s office with the buyer and the real estate agent. The notaire read over all the paperwork to confirm everything and we signed and initialed a whole new batch of papers. Keys were finally exchanged and we officially became homeowners three months after we put in the offer.
In the end, like all comparisons between France and the US, I refuse to say which system is better than the other. The combination of a buyer’s market with low interest rates means it’s an ideal opportunity to buy in France … if you have the time to look at lots of properties. I appreciate the advantages in the French system with regards to preventing housing bubbles but, with the strict regulations and different “cooling-off periods”, I can also see why sellers find it easier to pass on property to their children rather than sell it. After all, by the time they can actually secure payment, they’ll probably be dead.