Buying without an estate agent

Negotiation
Negotiate directly with the owner
How hurt pride can break a deal
The negotiating game
Negotiating the French way


More than 50% of the French choose to sell their house independently. This does not mean they do not try to sell through a real estate agent, but because the system of exclusive sale rights is relatively uncommon in France, they also try other channels. This means that even if a house is on sale with five different property agents, it can usually also be found on web sites for private sellers, such as www.pap.fr, www.sansagence.com or www.immogo.com. Sites that place ads exclusively for houses 'FSBO' - for sale by the owner. You should not come accross an estate agent there.

The property brokers in France have a habit of not communicating amongst eachother. They see all other agents as competitors and therefore there is hardly any cooperation. This can lead to different agency commissions being asked for the same property. You will find one property for widely varying prices on several sites. An example:

Mr. Durand wants to sell his home. He asks an estate agent to come by, who estimates the market value of his property at 280,000 euro. Because the estate agent also has to make a living, the asking prices must be higher. One estate agent might manage to cranck the sale price up to 300,000 euro. The owner and the broker receive 280,000 euro and 20,000 euro (6.5%) respectively. The next estate agent is more modest and will only ask for 5% or 15,000 euro commission. If you find the house and buy through him, you pay 295,000 euro. The third wants the property to be sold quickly and therefore requires only 9,500 euro (3%). If you happen to come across the house via his agency, you would pay 289,500 euro.
But... Mr. Durand also has his home up for sale privately. With a little searching, you could find the house for even less. Even if the published price may not be lower, then at least you know that there is room for a lower offer, as the seller won’t need to pay the estate agency fee.

Negotiation:

Negotiating is just as current a in France as in other countries. You can assume that the seller wants to sell his property and therefore is usually willing to compromise on terms or price. A 10% margin is generally acceptable. Some owners will put a fixed price and will refuse to go down. But this is very rare. If you come with good arguments, the owner is usually willing to compromise.

Negotiations through a property agent are slightly different than directly with the private seller. The agent also has a personal interest. You are obliged to buy a house through him if you have visited it through him. This can lead to strange situations. An example from the practice of buyer advisors 30 Ó Vendre:

A house is for sale at 549,000 euro and there is a potential buyer, Mr. A. After some bidding Mr. A does not want to go higher than 500,000 euro. This is rejected by the seller, who also has to pay the agent (about 6% = 30,000€). A few weeks later, another potential buyer, Mr. B, finds the property through the owner himself. Mr. B succeeds in negotiating and buying the same house for 494,000 euro. Less than the previous bid of Mr. A, but because there are no agency fees, the seller still is left with more. The estate agent in this case refused to negotiate anything from his commission of 30,000 euro and blocked the sale. Had he settled for 6,000 euros, for example, Buyer A would have bought the house and the estate agent would also have earned a good commission. Finally bad luck for Mr. A, who was not entitled by law - after failed negotiations - to go directly to the owner.

This example shows that it is always wise to check if a property for sale with an property agency (agent immobilier) - but not yet visited with this agency – is available directly from the owner.
If you are looking for a house of 400,000 euro, the agency could ask for 20,000 euro commission. For a much lower price you can hire someone like “30 Ó Vendre” to search non stop for you on websites and in local newspapers. More than likely you will find the same property at a lower price.

Negotiate directly with the owner

In a direct negotiation with the owner in France, it is important to identify with the owner. Of course you want to pay as little as possible for the house and the owner wants to receive the highest price. This is a good starting point for a stalemate. Obviously, from the start both parties must be willing to come to an agreement. Try to be aware of this during the negotiations. Always use arguments that you can easily justify. Do not say for example that the kitchen is outdated and that a new kitchen will cost 20,000 euro so the price should be lower. Maybe the owner is very happy with his kitchen, where he enjoyed cooking for years, and therefore can’t see this as a good reason. By “insulting” his kitchen you are not closer to a good result, merely off on a tangent.

Hurt pride can break a deal

The following story gives a good illustration of the problems that may arise during the negotiations:

A consultant is aproached during a tough negotiation between two individuals (NL-FR) and asked to try and salvage the situation. The Dutchman had many arguments to negotiate the asking price of 245,000 euros down to 220,000 euros. The French owner did not appreciate the direct method of approach and came back with a counter-offer of 260,000 euro. The Dutchman of course, did not understand. He did not realize that he had insulted the Frenchman in such a way that he no longer wanted to sell his house (where his father grew up) to this rude foreigner! Unnecessary. When asked in an interview, the Frenchman said that he really wanted to negotiate a deal but not with someone who pretended he did not want the house, as though he would be forced to live there. Unfortunately there was nothing left to save. The negotiation was no longer possible.

In France, in a negotiation it is not only important to define the price but to raise all other subjects to be discussed. You can NOT bring up a subsequent argument - for instance relating to planning permission - once both parties have agreed on the price. All important terms should put on the table during the negotiation, before any final arrangements are made.

Author: Mikel de Rooij
30 Ó Vendre

 

The negotiating game

The seller can go in any direction even during negotiations. What some buyers forget in the heat of the moment is that ultimately it is the seller who determines whether he sells for the price and terms offered. Until the compromis de vente is signed, the seller is free to turn down an offer, to withdraw the house from the market or to sell it to someone else. The buyer and seller only have rights and obligations after both parties have signed the compromis de vente.

 

Negotiating the French way

Negotiating the price is an art. Your bid can often be the final offer, and so should therefore be delivered with words of appreciation and admiration, ah ...., c'est superbe, formidable, magnifique! ... ... and how well the seller has rebuilt / refurbished / maintained the property, how wonderful it would be to live here, how very nice the seller is. Compliments are a good lubricant for an agreement.

Author: Wim van Teeffelen
www.compromisdevente.info

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