Real estate transaction: how does the transfer of funds work?

• The preliminary agreement (preliminary sales agreement or promise to sell) often provides for a down payment or deposit.

• Payment of the balance takes place when signing the notarized deed.

The payment timeline combines the deposit at the preliminary agreement, the removal of suspensive conditions, and the final payment at the deed.

The notary is the central trusted third party. They receive the amounts and hold them in a dedicated escrow account. They verify the mortgage status, the title deed, and the diagnostics. Notarial liability and notarial regulations govern the security of the funds.

Using a notary offers greater protection than transferring money directly to the seller. For new builds, off-plan sales involve staged payments secured by a financial completion guarantee. Other special cases may provide specific unlocking arrangements, which must be set out in the deeds.

The notary’s role in the transfer of funds for a house sale

The notary receives payments into their escrow account and records the operations. They carry out notarial checks: mortgage status, land registry details, title, diagnostics, and document compliance. They hold the funds until all conditions are met. After signature and checks, they arrange for the funds to be made available to the seller.

Notarial escrow prevents any use of the money before the conditions are fulfilled. The profession has professional insurance and ethical obligations. In the event of misconduct, remedies exist against the notary through disciplinary or judicial channels.

Difference between the preliminary agreement and the notarized deed for the release of funds

At the time of the preliminary sales agreement or the promise to sell, the buyer often pays a down payment or deposit. This deposit, typically 5 to 10%, reflects the parties’ commitment. It is held in the escrow account or by the agency depending on the contract terms.

Payment of the balance is made when signing the notarized deed. The bank unlocks the loan and transfers the funds to the notary. The notary deducts the costs and releases the funds to the seller after the required formalities.

Exceptions: for off-plan sales, staged payments follow construction progress. Contract clauses may provide for prepayments or alternative arrangements. These provisions must be secured by the notary.

Legal security and safeguards linked to the transfer of funds in a property sale

Several safeguards protect both buyer and seller. Notarial escrow protects the sums. The financial completion guarantee secures off-plan transactions. The ten-year structural warranty covers certain works on new properties.

The notary checks that there is no mortgage via the mortgage statement. The lifting and removal of registrations are arranged before full release of the funds. In the event of a dispute, the notary can apply a retention or extend escrow holding.

Detailed steps for unlocking and releasing funds

In practice, the process involves the buyer, the bank, the notary, and the seller. Here is a clear, simple timeline of the usual steps.

Step 0: signing the preliminary agreement and paying the deposit

The buyer pays a deposit, typically 5 to 10% in practice. The money is paid into an escrow account or held by the agency depending on the contract.

Step 1: notarial file preparation

The notary prepares the deed and performs the required checks. They review the mortgage statement, land registry details, and diagnostics.

Step 2: obtaining the mortgage loan

The bank issues a loan offer letter. The buyer signs and returns the acceptance. The suspensive condition of obtaining financing can then be lifted.

Step 3: removal of suspensive conditions

The notary receives the certificate or accepted offer. They verify compliance before setting the deed date.

Step 4: signing the deed and paying the balance

The bank unlocks the funds to the notary’s bank details. The notary favors secure bank transfers. They deduct the costs and arrange the release of funds to the seller.

Step 5: mortgage release and registration

The notary arranges the mortgage release if needed. Land registration formalities make the transfer of ownership official.

Typical timeframes: obtaining the mortgage is 30–45 days on average. Time between preliminary agreement and deed: often 30–60 days. Standard SEPA transfer: 24–72 hours. Instant transfers may be possible depending on banks.

Deposit at the preliminary agreement: how it works and why it matters

The deposit formalizes the parties’ commitment. It is held in escrow. The buyer has a 10-day cooling-off period. If a suspensive clause is not lifted, the deposit is returned.

If the buyer defaults, the seller may keep the deposit according to the terms of the preliminary agreement. The exact conditions must be stated in the preliminary agreement or the promise to sell.

Lifting suspensive conditions before the loan is unlocked

The financing suspensive condition is lifted after receiving the loan offer letter and its acceptance. The notary often requests a bank certificate to formally record the lift. The bank checks borrower insurance, the down payment, and supporting documents.

Once compliant, the bank prepares the loan disbursement and schedules the transfer to the notary. Any specific condition must be met before releasing the funds.

Signing day: the notarized deed and payment methods

On the day the deed is signed, the parties meet at the notary’s office. After final checks, the notary proceeds with the transfer from the escrow account. A banker’s draft is still possible but is rarely preferred. The deed date is the official transfer date. The value date of the transfer varies by bank.

Banking delays, notarial timing, and the date funds are made available

A standard SEPA transfer takes 24–72 hours. An instant transfer is nearly immediate if the bank offers it. After signature, funds may be made available within a few hours or a few days. A delayed mortgage release may delay the release of funds.

The escrow account and the notary’s operational role

The escrow account is a notary bank account reserved for transaction funds. Notarial regulations require identification, blocking, and secure holding of sums. Funds cannot be used before contractual conditions are met.

Operationally, the buyer transfers money to the notary’s bank details. The notary records payment and finalizes the account statement. The release of funds occurs after signature and formalities.

Anti-fraud procedures are systematic: bank details verification, dual checks, and confirmation calls. These measures strengthen security and reduce bank transfer fraud risks.

How an escrow account works in a transaction

Notarial escrow receives transfers to the notary’s bank details. The sums are recorded and legally blocked. Once conditions are met, the notary releases the funds to the beneficiary.

Documents and checks performed by the notary before release

Before releasing funds, the notary consults the mortgage statement, land registry details, and the title deed. They check property diagnostics, including the energy performance certificate. They confirm the loan offer letter and the loan certificate. If a mortgage remains, they organize the release with the secured creditor.

Financing and conditions for unlocking mortgage loans

The bank plays a decisive role in unlocking funds. The loan offer letter formalizes the loan conditions and must be accepted by the borrower. The notary checks this acceptance before signature.

Loan disbursement occurs after verifying conditions: borrower insurance, supporting documents, and amount compliance. The bank then transfers the funds to the notary as provided.

Loan types can affect the timeline. A bridging loan may require staged disbursement and proof of resale. A first-time buyer loan or other subsidized loans can affect amounts and timing. Borrower insurance often remains a condition for disbursement.

The loan offer letter and its implications for fund transfers

The loan offer letter states the amount, rate, term, and acceptance deadline. It serves as supporting evidence to lift the financing suspensive condition. The notary checks its validity before moving the signature timeline forward.

Specificities of bridging loans, first-time buyers, and borrower insurance

A bridging loan often involves progressive disbursement. The bank may withhold part of the financing until resale is proven. First-time buyer status and subsidized loans can change rules and timelines. A borrower insurance refusal can block fund disbursement.

Fees, taxes, and mortgage release: amounts called at the time funds are released

At the deed, the notary deducts several items from the escrow account. They pay the net price to the seller, notary fees, transfer taxes, and any agency fees. Adjustments are added: property tax and condominium charges.

A mortgage release removes the registration once the loan is repaid. The notary coordinates this step with the secured creditor. Mortgage release fees are included in the final statement.

In the event of early repayment, indemnities may apply. The notary takes these into account in the final statement provided to the parties.

How notary fees are calculated and when they are paid

Notary fees include professional fees, taxes, and disbursements. At registration, they are around 7 to 8% for existing property and 2 to 3% for new builds. The notary deducts these amounts at the deed, directly from the escrow account.

Who pays what: price, charges, taxes, and possible retentions

The buyer pays the sale price and financing-related costs. The seller receives the net amount after any agency fees. Property tax and condominium charges are adjusted on a pro-rata basis. If there are reservations, a retention can be decided and managed through escrow.

Special cases, risks, prevention, and a worked example

Some sales follow specific rules. In off-plan sales, staged payments follow progress. The financial completion guarantee protects the buyer. In a life annuity sale, a lump sum precedes the annuity payments.

High-end sales or transactions by property traders may require reinforced escrow or bank guarantees. For business sales or rental investments, the split and timing may differ.

A major watch point is bank transfer fraud and phishing. Always verify the notary’s bank details by phone using their official number. Enable two-factor authentication when sending documents. Always request written confirmation of transfer instructions.

Event | Amount | Date (example)
Apartment purchase - price | €300,000 | J+45 deed
Down payment | €30,000 (10%) | J0 preliminary agreement
Deposit at preliminary agreement | €9,000 (3%) | J0
Bank loan | €270,000 | J+30 accepted loan offer
Notary fees (est.) | €24,000 | deducted J+45
Property tax adjustment | €1,200 | deducted J+45

Worked example: the buyer pays €9,000 as a deposit at the preliminary agreement (J0). After acceptance of the loan offer (J+30), the bank unlocks the funds. The notary receives €270,000, deducts the fees, and makes the funds available to the seller at J+45. A transfer delay of 48–72 hours delays availability and sometimes the removal of registration.

How to avoid bank details fraud

Verify the notary’s bank details by phone using an official number. Do not follow a change of bank details communicated only by email. Enable two-factor authentication when sending documents. Ask for a phone confirmation before any large transfer.

What to do in case of an error or dispute after transferring funds

Contact your bank and the notary immediately. Keep all evidence: emails, confirmations, and transfer receipts. File a complaint if it involves fraud. The notary may implement measures such as extended escrow holding, remedies, and court actions if needed.

Worked example: simulation of a transfer of funds

Using the scenario: price €300,000, down payment €30,000, deposit €9,000, loan €270,000. After acceptance of the offer, the bank unlocks the funds to the notary. The notary deducts the fees, arranges the mortgage release, and releases the funds to the seller. If the mortgage release is delayed, the notary keeps part of the amount in escrow.

Capifrance local real estate advisor expertise

A Capifrance local real estate advisor supports you at every step of your buying or selling project. They help coordinate the bank and the notary and check documents (energy performance certificate, diagnostics). They help you plan the payment timeline and secure bank detail verification.

Benefit from a free appointment for a personalized simulation. Contact a Capifrance advisor near you for local, tailored support.

Conclusion

The transfer of funds follows clear steps: deposit, lifting conditions, signing the deed, and release of funds.
The notary, through escrow, ensures legal security and safekeeping of the sums.
Bank–notary coordination is essential to meet the payment timeline and avoid delays.
Special cases (off-plan, life annuity, high-end) require specific safeguards.
To secure your transaction, contact a local Capifrance real estate advisor who will coordinate the bank, the notary, and administrative steps.

Selling a house, apartment, land, property, or commercial premises? Start with a reliable property valuation. A Capifrance advisor will provide a professional valuation and personalized support to sell under the best conditions.

Looking to buy? Explore our exclusive real estate listings in France and find your gem for a main home, a second home, or a profitable rental investment.

Faq

Who transfers the funds during a real estate transaction?

Funds are transferred by the buyer or, most often, by their bank. The bank unlocks the funds and transfers them to the notary (escrow account) so the notary can release the funds to the seller.

When does the notary release the money to the seller?

The notary releases the money after the notarized deed is signed and after checking that conditions are met. Any mortgage release and land registration formalities can affect the timeline.

How does the bank unlock the funds?

The bank unlocks funds after the loan offer letter is formally accepted and required documents are received. It then makes a bank transfer to the notary according to the agreed terms.

Can the seller receive money before a mortgage is removed?

In general, the mortgage release must be arranged before full payment. However, the notary may set up suitable solutions on a case-by-case basis.

What should you do in case of a transfer error or fraud?

Contact your bank and the notary immediately. Keep evidence and file a complaint if necessary. Acting quickly increases the chances of blocking and recovering the funds.

How does the transfer of funds work for an off-plan purchase?

For off-plan sales, funds are unlocked through staged calls for funds based on construction progress. They are secured by the financial completion guarantee and the developer’s safeguards.

Is the transfer of funds different for a life annuity sale?

Yes. In a life annuity sale, payment includes an initial lump sum and life annuity payments. The notary formalizes and secures these arrangements.

What fees are paid at the time funds are released?

At signature, the notary deducts the net sale price paid to the seller, notary fees (professional fees and transfer taxes), and possibly agency fees and adjustments.

Can part of the funds be held back if there are reservations after the final walk-through?

Yes. A retention or extended escrow holding can be agreed to cover reservations. The notary manages the holding and release of the sums.

How long does it take for the transfer of the sale price to be effective?

A standard SEPA transfer generally takes 24–72 hours. An instant transfer may be faster if banks offer it. The value date depends on the bank.

Where can you find recent real estate transactions?

Recent transactions can be consulted via public databases derived from notarial references and land registry publications. Some online platforms also provide aggregated data by area and price per square meter. Notaries and local real estate advisors also have professional tools to analyze completed sales.

What is a real estate transaction?

A real estate transaction is the legal and financial operation by which a property changes ownership. It includes negotiation, signing a preliminary agreement, lifting suspensive conditions, signing the notarized deed, and the secure transfer and release of funds through the notary.

What is the real estate transaction profession?

The real estate transaction profession consists of supporting sellers and buyers through the sale or purchase of a property. The professional (real estate agent or independent advisor) values the property, organizes viewings, negotiates terms, secures the preliminary agreement, and coordinates with the notary and bank until final signature.

What are the steps in a real estate transaction?

A real estate transaction generally follows these steps: valuation and listing, negotiation and offer acceptance, signing the preliminary agreement with a deposit, obtaining financing and lifting suspensive conditions, then signing the notarized deed with the transfer and release of funds.

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