Currently in England the exchange of contract happens shortly - if not immediately - after your offer has been accepted.
In France, things happen differently: you are required to pay a deposit at an early stage of the process when you buy a French property.
However, not all payments on account have the same implications as they depend on the type of contract, which is why there are several names for the initial contract.
Among the most used you'll find the 'compromis de vente', the 'contrat de réservation' and the 'promesse de vente'.
Compromis de vente: Commonly called the preliminary sales agreement, the buyer is here compelled to purchase a property subject to certain conditions being fulfilled, which mainly deal with the safety of the mortgage and surveys to be carried out (lead, asbestos etc).
In the event that the buyer does not fulfil these conditions, he is entitled to withdraw from the contract, even though he will lose his deposit.
IMPORTANT: tu parles pas du cooling off period!! Note that after signing the Compromis de Vente you are given a seven day "cooling off period" during which you can withdraw from the sale without incurring any penalties.
The seven days usually start from the day you receive the signed compromis.
After that, any other reason or change of mind would not allow the buyer to withdraw from the purchase even if he is willing to lose his deposit.
In fact, the vendors could: -Force the sale before the court -Seek damages When there is a penalty clause in the contract, the amount of damage to be given to the party in breach is fixed and usually amounts to 10% of the price plus the estate agent's fees.
Contract de réservation: This is what is called the reservation contract in the UK.
The purchase of a property will result in this sort of contract with a developer (of a New build development), by which the buyer reserves the property he wants in exchange for a deposit.
This type of contract enables the developer to secure prospective buyers before the structural and financial aspects are put in place.
The deadline must be within a year if the developer requires a 5% deposit and within 2 years if the deposit is 2%.
In the event that the contract is not respected by the developer, then the buyer can pull out and recover the deposit.
Promesse de vente: Usually called the promise of sale, this contract allows the buyer to purchase a property at the end of a specific period of time.
The sellers must stick to this promise and sell to the buyer only at a price fixed from the start.
In this case, the payment on account is an indemnity as sellers set aside their property for the potential buyers.
This indemnity will be lost by the buyer if he decides to withdraw from the purchase if he changes his mind or if the sale of a property falls through when the funds are needed for this property.
These various contracts will greatly minimise your liability so that you have nothing to pay, or at worst lose your deposit only.
In France, things happen differently: you are required to pay a deposit at an early stage of the process when you buy a French property.
However, not all payments on account have the same implications as they depend on the type of contract, which is why there are several names for the initial contract.
Among the most used you'll find the 'compromis de vente', the 'contrat de réservation' and the 'promesse de vente'.
Compromis de vente: Commonly called the preliminary sales agreement, the buyer is here compelled to purchase a property subject to certain conditions being fulfilled, which mainly deal with the safety of the mortgage and surveys to be carried out (lead, asbestos etc).
In the event that the buyer does not fulfil these conditions, he is entitled to withdraw from the contract, even though he will lose his deposit.
IMPORTANT: tu parles pas du cooling off period!! Note that after signing the Compromis de Vente you are given a seven day "cooling off period" during which you can withdraw from the sale without incurring any penalties.
The seven days usually start from the day you receive the signed compromis.
After that, any other reason or change of mind would not allow the buyer to withdraw from the purchase even if he is willing to lose his deposit.
In fact, the vendors could: -Force the sale before the court -Seek damages When there is a penalty clause in the contract, the amount of damage to be given to the party in breach is fixed and usually amounts to 10% of the price plus the estate agent's fees.
Contract de réservation: This is what is called the reservation contract in the UK.
The purchase of a property will result in this sort of contract with a developer (of a New build development), by which the buyer reserves the property he wants in exchange for a deposit.
This type of contract enables the developer to secure prospective buyers before the structural and financial aspects are put in place.
The deadline must be within a year if the developer requires a 5% deposit and within 2 years if the deposit is 2%.
In the event that the contract is not respected by the developer, then the buyer can pull out and recover the deposit.
Promesse de vente: Usually called the promise of sale, this contract allows the buyer to purchase a property at the end of a specific period of time.
The sellers must stick to this promise and sell to the buyer only at a price fixed from the start.
In this case, the payment on account is an indemnity as sellers set aside their property for the potential buyers.
This indemnity will be lost by the buyer if he decides to withdraw from the purchase if he changes his mind or if the sale of a property falls through when the funds are needed for this property.
These various contracts will greatly minimise your liability so that you have nothing to pay, or at worst lose your deposit only.