Why do I have to make a down payment at the time of compromise?
Ange d’Azur accompanies you in your efforts to buy a house or an apartment on the French Riviera. We offer a personalized approach, depending on the type of property you are looking for. One of the steps in the purchase of a property is the payment of a deposit. Here is everything you need to know about making a down payment at the time of signing the preliminary sales agreement.
What is an escrow ?
When signing a preliminary sales agreement, the seller often asks for a deposit, also called an “escrow” of the price of the property purchased. The buyer must accompany his signature with the payment of a part of the total sale price of the property, and thus pay a deposit. The payment of a deposit is not a legal obligation and the amount is not determined by law. On the other hand, it is customary for the seller to ask for a sum equivalent to 10% of the sale price, which is the rate practiced in the vast majority of sales agreements. But this percentage is not an obligation. It can therefore be higher or lower, especially if the sum requested is too high for the buyer. In this case, the seller may agree to a lower amount, which is generally equal to 5% of the price of the property. It is important to note that it is the notary who collects the deposit and not the seller.
Is the payment of a deposit compulsory in order to sign a preliminary sales agreement ?
The payment of a deposit is a sort of custom between sellers and buyers. Indeed, the seller generally asks for a deposit to ensure the good faith of the buyer. It is thus a pledge of security. The payment of a deposit is not a legal obligation, contrary to what one may think. No law or text requires the buyer to pay a certain amount when signing the sales agreement. Indeed, the deposit is paid in order to seal the agreement between the two parties. This agreement may mention that in case of non-compliance with the agreement, the seller may keep the amount paid as damages. Therefore, the deposit is not a simple reservation, it is a first payment for the purchase of the property. If the buyer cancels the sale for reasons not mentioned in the suspensive clauses, then the seller can keep the amount already paid. On the other hand, if the buyer cancels the sale during the 10-day withdrawal period, then he/she will be able to recover this amount.
To facilitate your steps in the drafting of a compromise of sale, do not hesitate to call upon an expert. Ange d’Azur will accompany you throughout the process of buying a property on the French Riviera.