Questions about buying in France?
Here you get honest answers. Question 001: How do I find a constructable plot in the Dordogne?
Question 002: Are there also estate agents for the buyer?
Question 003: Why doesn’t the Dutch broker system work in France?
Question 004: Starting a B & B and financing with a loan?
Question 005: Who inherits the house upon death?
Question 006: Buying to renovate in France
Question 007: Buying a bungalow 2% cost?
Question 008: How can I get building insurance and open a bank account?
Question 9: What can I do about unexpected rights of way We are interested in a piece of land to build a wooden chalet. Last September we went to the Dordogne to look around, and we have indeed seen a lot of land. Twice we found a plot which interested us, but each time it turned out to be already sold without the appropriate agency being aware of it. It was very frustrating because in our minds we were already there. What advice can you give, in our case? Thanks. Fri. Regards, B. V. - H. Answer:
I think in your case I would skip the estate agent. You probably already know the village or an area in the Dordogne where you would really like to live. From there go to the mayors office and ask. The chances are 10 to 1 that he knows of (or has!) a few pieces of land for sale. The local cafe can also be a good source. Take your time, chat with some people. Choose a guest house with a French owner. Find out who the biggest farmer in the neighborhood is and ask him if he has a plot of land somewhere which could be built on. It is important to slow down. So don’t go running up to the barman out of breath asking where there is land for sale. Having said that ... I found a house from my car window by asking a man who was mowing his lawn "There’s a house for sale near here somewhere. Do you know where it is?" It was not the house I was looking for, but I bought the house he told me about. Good luck! Gregor (Krek.) Hakkenberg Are there also estate agents for the buyer? J.deW. Answer:
There are various consultants in France who are paid solely by the buyer. You have much more chance of getting objective advice and guidance from them. You pay either an hourly rate or sometimes a percentage of the transaction price. Good evening,
We are now rich in experience as to the estate agents and their apparent practices. Fascinating. I read somewhere on a site as advice not to go to estate agents. Anyway, I still have the urgent need for knowledge .........:)
Now, I understand that estate agents are actually just sales agents, their commission is taken off the top of the sale price. Price negotiations are therefore primarily at the expense of the estate agents commission, which of course he tries to recover by putting pressure on the seller about his price. Seems like a fun sport.
I am astonished about the phenomenon "exclusivité". Why on earth would a any one give exclusivity of their house to one agency, when the commission is the same as non exclusive ... I don’t get it. It seems logical that the estate agent should take a lower commission for exclusivité. After all he is sure of the return.
Which brings me to the question why there is no estate agent regulating body/group, operating like in Holland. I am the last person in Netherlands to idealize rules and regulations, but I can not help feeling that in this area "our" system works better. Especially as the interest of the agent and the customer go hand in hand. In our system there can be no conflict of interest occuring between estate agent and seller. In short: do you know why the Dutch system will not work there??
M.vr.gr., Ad de Jong. Answer
Dear Ad,
Your sketch is pretty accurate. However a few things, I find, require explanation.
Estate agents - at least, the good ones - are a little more than sales agents. It is true that there are some who only think of their own pockets and are quite cynical over their dumb clients. But particularly for the seller an estate agent be a real plus. He can assess the house, he put ads in the newspapers and on his site, he helps those interested in a visit to the house and he can negotiate for you. Moreover, he has a common goal: to sell the house for as much as possible. Negotiations need not be detrimental to the commission
The estate agent may just stick to his predetermined commission of six to ten percent. Then whether he sells the house for 450,000 or 420,000, it does not hurt so much. If it only goes through him, so that he can send the bill. It may happen that an estate agent gets into the negotiations. If a deal is likely to falter on a few thousand euro, he can show his good will and reduce his commission to close the deal. Under the motto: Better half an egg than an empty shell. I don’t know if they ever do this in the Netherlands though. Also the buyer can always ask the selling estate agent to compromise. Some are very rigid, but most are not so bad, especially in today's market. Never just accept exclusivité
Mainly foreigners still fall in the trap. Sometimes people think that the agency will work harder because he is certain of his commission. But it can also work the other way. What will motivate him if there is no competition. The profit remains the same and he no longer runs the risk that another agent will sell it under his nose. I've already heard a couple of times from Dutch people who could not put their house on a private site, because even if they sold the house themselves the agent would still get his 3%! Ther are estate agents who don’t even offer a ‘Mandat Simple’ and people sign without realizing that they are signing an exclusive deal. A bit silly. If you have confidence in a particular agency, you can give them a couple of months chance to prove themselves. Make clear arrangements about his investment in your success, such as a specific advertising budget. The agent gets exclusivity on the house for the first three months if he, for example, provides translations for advertising in at least three foreign magazines for an X amount. So you can capture the whole advertising plan. In this way you give some freedom and the broker pays it back by actually investing in your success. Why don’t estate agents work in the Dutch way?
Good question. I think at some point they will have to. However, it is not financially feasible as long as people still put their homes on the market with several brokers. Because what the French system actually comes down to is that averaged out the agent only gets 1.5% of each house. There are on average four agents per house in the game, each asking 6%. Three of the four earn nothing. As more web sites for individuals develop, the more likely it is that 4 out of 4 agents are earning nothing. The system will self destruct. I don’t really know what the alternative is. The Dutch system starts with exclusivity. The French system stands by the grace of mistrust. Often there are no good pictures displayed, seldom an address, often the neighbors are not informed etc etc. To get to the NL system there must be a major shift in mentality coming from the client and the agent. It stikes me that we will eventually see it. Besides there are all these réseaux that houses share. The SIA is one of them. Exclusivity
People do not want exclusivity, because the market is not transparent enough. Imagine that your home is exclusively with aan agent who has an untraceable website, or bad business strategy. Then you run the risk of your home being invisible to those interested. People spread the risk of not selling by going with multiple agents. Additional comment of formal 'buyer agent' Mikel de Rooij of 30 to Vendre:
With exclusivity a national site could capitalize on this issue. I have also tried to get this off the ground, but forget about it. A Dutchman explaining how the game should be played is not the most ideal situation. Even if everyone would benefit. Six years ago I wrote my proposal to the FNAIM. They gave me was involved in the further development of the SIA system. This was very informative. I learned that France is far from ready for a system similar to NL. All proposals which I did then was an explanation of how the French market would react too suspiciously here. Personal experience of Krek.:
When I was in France, because of circumstances I came in possession of a list of 10 families in our region looking for a house. I stepped into two estate agents with this list and the request to help these people find a house. I would give advise to these people but would not accept money via the agent. They did not want me in the mix fearing that I would come with a competitor in order to take the commission on the houses they would show me. So distrustful. Overview and openness
The Dutch system works particularly well because the agents cooperate and have a mutual understanding of what each other has to offer. With the site for all agents, Funda.nl the market is open. In France, they are so used to being at each other's throats that it has become very difficult. If an agent discovers that a house is for sale somewhere, he calls and asks if he can sell it. They sit on their houses like a hen on her chicks.
The open system only works if it is done in one foul swoop. But that means that suddenly everyone must be at 1.5%, that agents must also work for the buyer, that a kind of Funda.nl -connect system must be put in place where all the agents have to put their offers. And it also means that the agents who currently sit together on a house, must do some kind of land consolidation. Because if the owner is only required to pay 1.5%, there is not much to distribute. Sell it yourself?
I advise customers who want to put their home on a private site for sale should in any case also go with two or three agents. The probability that the house is sold through the agent in the traditional way is still quite large (approximately 50%). Because many home seekers still look on the spot in agency windows. Choose a broker with a good multilingual site that has lots of advertising and an office with a big window in the center of a nearby larger city. Take one per city or one with branches in several cities, so your house for is seen up for sale in different places. Never pay more than 6% commission and do not forget to leave some room for negotiation in the sale. Looking for yourself as a buyer?
Of course you are first going to look for yourself, and at first only on private sites. It is also wise to have a look around yourself in the region where you want to live. Simply ask around, that can bring very surprising results.
And finally you can go to the estate agents. Remember that they are not there to help you, but to sell. Always keep in mind : "The agent is the counterparty" So never confide in them saying that you absolutely want to buy a certain house. Never tell them what your maximum budget is (you can safely say that you are looking for a house around the 500,000 mark, but do not say you can possibly go up to 600,000) and if the agent says that the price is non-negotiable, place an even lower bid. No matter how beautiful you find the house, stay cool and say that you will keep on searching. Putting the agent out of the game?
Some people sneak back later to a house which they found through an agent and try to do business directly with the owner. This may pose major problems to the seller because he has signed a contract. Moreover, it is not correct, because the agent has done his work and made it clear in advance what it would cost. He must simply have his money. You can of course try to move the agent on the amount it takes as commission. If you can make him believe that it’s the only way to make the deal, he might agree to compromise. Or not.
Gregor (Krek.) Hakkenberg Dear webmaster,
On your website, we have found all the necessary useful information about buying a house in France. We are a young couple looking for a permanent home and so we have already undertaken all the necessary searches on the internet. There is so much contradictory information available. And before we actually go on a trip to France in June to focus on looking around at houses, we would like to be sure on a few things. Perhaps you can give us answers to some of our questions?
1 What is the amount or percentage you can get a mortgage for (one site says it’s 50%, another talks about a full mortgage). Just like in the Netherlands a mortgage is based on what you already have and above all how much you can proove you earn. If you live in France without a job to begin with, you can forget about a mortgage. A 100% mortgage is attainable only if you have a lot of money somewhere else or if you own another house out right. Do not be fooled by indiscriminate advertising by unreliable people. 2 What type of mortgages are there in Fr? Even for example repayment?
Interest only mortgages started piecemeal to arrive on the market in France, especially interesting for people without heirs. In many cases it is not useful because the mortgage has only very limited tax-deduction. You can do better to pay off as quickly as possible. This makes the monthly payments much higher. 3 Are there any other ways to finance a home? If you make a Bed & Breakfast of it, can you get a business loan? A business loan for a chambres d'hotes is rarely attainable. Banks see a bed and breakfast as a sideline not a business, the assessment is the same as for an ordinary house. For a real business property it is naturally different. 4 On your site we read that you can get out of the purchase without penalty during a cooling off period. Is it true that you are still bound by the agent to buy another house (because we read that somewhere)? No, it is not true, even if some agents might like you to believe it. If you sign a preliminary contract you can get out of the purchase within 7 days without any explanation to anyone (with a signed written note by registered post or even delivered by hand to the notary). Idealy don’t buy through an estate agent in the first place but directly from the owner. Saving you 5% in costs. 5 Are you required to invest a certain amount of money in a house? You must either own money or have a job, you should first look for a job and rent something. When you have worked for a while, may be you can talk to a bank. Hopefully you can help get us a little further on our way. Thank you for your trouble! You're welcome. A few more things:
I have a feeling that you - like many people who contact me - dream of buying a house and then renting out rooms. This is very difficult without a job along side. Or even impossible. Example.
Suppose you have 100,000 euro. For that price you won’t have a house with enough rooms to rent, so you borrow 80,000 euro. Then you can afford a house with three ‘chambres d'hôte’. It won’t be very luxurious. Your repayments will be approximately 600 euro per month. So, 12 x 600 is 7,200 euro per year. You can rent the three rooms in high season for ten weeks (very optimistic) at 100 euro per day. There are some costs, so count about 90 euro. 70 days times 90 euro equals 6,300 euro. Add a bit more for low season and count 10,000 euro per year total revenue (the average in France is 2,500 euro per room per year, so we remain very optimistic)! You have 2,800 euro left over. And then the maintenance and taxes are not even close to it. And don’t forget that it is a lot of work!
In principle it’s not interesting to rent lodgings or a B & B to start with if you need to borrow money. It will simply not be enough and is only interesting as money on the side when there are no mortgage repayments! I don’t know any one with a B & B that doesn’t have either a fixed income (or retirement) along side. Anyway good luck! Gregor (Krek.) Hakkenberg (thanks to Ondernemen-Frankrijk.nl) Good morning,
Nice site with tips on buying a house in France. I hear often that problems arise when someone dies. The children have no automatic right to inherit the house? How can this be arranged well? Thank you for your reply.
Sincerely
Y.V. Answer: Dear Y,
Here, I have little knowledge. Moreover, the laws concerning this issue have recently changed. Inheritance rights are now considered excellent with the new law. For more detailed information please look at the acclaimed Wim Bavelaar site where there is a lot of information on this matter.
The best advice I can give you in this area is, to live as long as possible!
Gregor (Krek.) Hakkenberg
Once again we have just spent a very happy holiday in France, we also decided it would be nice to own a holiday cottage in this country. But with a mortgage, young school children, etc., etc. the money flies out the door. Is it therefore by definition, an unrealistic dream? Is it only reserved for people with money or an inheritance? I refuse to give up on this, so what options do I have? We have some of our own money, enough to buy for example a ruin with a small terrain. Well, now I'm a real do-it-yourselfer and no job scares me. And I would like to study the local construction business. But a ruin to renovate, where time is limited (probably only during holidays and weekends) is something else. On the other hand, if you don’t mind waiting 5 years or longer before you can live in it, then what does it matter, at least you will have a house there. Or should we save and wait until we can buy a house that is already a home? What’s going to happen to the land and house prices in France over the coming years? And I can’t wait, my hands itching, I want to work! Not next week or tomorrow but now! (Whoops, my holidays are almost up).
Seriously, there are plenty of stories about people buying a run down property where they are forced to give up halfway, or about what a misery it all is, but there must be nevertheless positive stories, where with effort, enthusiasm and limited resources, a ruin has been successfully renovated modelled into a habitable house? Or is this unrealistic?
Sincerely,
Marco van der H.
Answer:
Dear Marco,
Buy a ‘fixer-upper in France’? I wouldn’t do it.
At the request of Marco here a few thoughts on the pros and cons of buying a run down property in France, plus some practical tips.
Search
Let's start at the beginning. Where to find a ‘fixer-upper’ and the investment required? Well. An almost habitable farmhouse in the Auvergne is cheaper than a goat ramshackle shed in the Var. Renovation possibilities are everywhere. You just need to first figure out where you want to live and then look around a bit. I would initially avoid agents like the plague. They're not interested in selling a cheap shack. And if they do, they ask for a relatively high commission to cover their costs. This in addition to the relatively high legal fees. Just go look for yourself, talk to people. Look around. Look around?
I found my own home just by driving around the country lanes, not knowing where they led to. It was hidden among the trees somewhere at the end of a barely passable trail. The brambles grew up in the gutter, so you could see the roof. But the spot, the place ….. Structural Search
I've said it before, use mostly local people. The people who know the most about the neighborhood are retired farmers and postmen. Of course one should not be in a hurry, enjoy a quiet drink together with the people you are cross-examining. Thus the search process very enjoyable! Agree on who is driving, because the breath test is becoming increasingly popular. Found something? Then what?
Suppose you have found a ruin or a piece land you want to buy. Firstly, of course, buy something with a CU (certificat d'urbanization) or in the sale agreement at least the condition subsequent that the CU will have been obtained before the definitive act is signed. An area where you are not allowed to live is pretty worthless. In principle obtaining planning permission should not be a problem, though sometimes there are some tough local regulations. For example in my own region, for a long time chalet style wooden houses were not alllowed to be built. They did not fit into the landscape. Only since a relative of a local counceller managed to obtain such a permit by rustling and expanding the rules. There is always a precedent. Buy now or later?
The property prices are under pressure lately. THE CRISE is in the headlines lately, including the development in the U.S.. The chances therefore are that the prices will fall (further). Whether or not the price of ruins or land will be effected I dare not say. It may be true that more pressure is on the low end of the market (growing demand by people who 'descend' the ladder) so that prices will just keep rising. No idea. It could go either way. In some regions house prices are years behind the trend. There are still some rising prices, partly because many people still want to leave the cities and commute using the TGV connections to live in the countryside. If they sell their expensive house in the city, for that money they can make a major dent in the country. So that would sustain the prices. Well, in short, I do not know. Is it realistic to self build?
Everything depends on your expectations, capabilities and commitment. And those of your family. A teenager of 15 will perhaps not enjoy three weeks at a remote building site in the middle of no-where. But actually around me I see people who with their own hands and with the help of neighbors, family and friends gradually transform a hovel into a palace. They can at least be sure that every euro they have put into the property will be doubled straight away. For a real ruin in a beautiful spot with a bit of luck you are looking at around 50,000 euros. Once it is habitable (roof, floor, toilet, shower, kitchen for a total of 25,000) you would pay more than double. Do it or not?
If you really want to, and you can do it yourself and you are not in a hurry ... always do it.
Gregor (Krek.) Hakkenberg I am planning to buy mobile home in a holiday park. The house is 1 year old. Are my transfer fees 2%?
P.
Answer:
Dear P., Unfortunately, the answer may not be positive: There is indeed no need to pay transfer tax (= 5.08%), so the usual buyer costs go down from about 7% to about 2 %.....
But .... in most cases TVA must be paid (some owners are exempt), so that can significantly increase the amount. This depends on how the TVA-settlement is arranged with the purchase price, the exact date of transfer, etc.. Most estate agents disguise the TVA gevalletje, to show "only" 2% transfer tax, but unfortunately it is usually not the whole truth.
Sincerely,
Wim Teefey
Corporate Fran Dear Sir or Madam,
What’s the procedure for taking out a home insurance for our (future) holiday home?
Thanks for your response.
C.B.
Answer:
Dear Mr. B., The French law requires that your home is insured from the moment of signing the acte authentique. In the past the notary would not even pass the deed if no proof of insurance could be provided by the buyer, but nowadays most notaries are more relaxed in and consider it the personal responsibility of the buyer. But it is still required. You can get a home insurance for your property from any insurer:
- Through an insurance agent or broker in the area where your house is (as the vast majority of homeowners in France)
- By bank
- Via an online supplier and www.secara.fr.
I hope this helps you a little further,
Sincerely
Wim van Teeffelen
www.compromisdevente.info Dear Sir / Madam, We bought a property (acte de vente May 2008). We asked dozens of times if there were any servitudes or right of way issues. In emails to us from our notary he always confirmed that there was no evidence of servitudes. The notary of the vendor, did a search for servitudes. In the acte it states that there are no servitudes left on the property. Today - we came back after the sale in the beginning of August 2008 - a neighbor came by waving a document which states that a right of way exists (established some 40 years ago, according to him).
Suppose the neighbor is right, what should we do?
Sincerely,
Hans
PS: We definitely only want the house without rights of way just like we have said and asked from the out set (since November 2007). Answer:
Dear Hans, I would initially go with a copy of the document to your notary. Then he has to rule on how it actually is. It may be that your neighbor is waving a document that is no longer valid.
If the notaries have made a mistake, then you can start a lawsuit to undo the sale. Or sue them for damages (if proven). Personally I have little chance of success in the French legal system.
I will send your question and this answer to the sales contract specialist Wim van Teeffelen of Compromisdevente.info. Perhaps he has further comments ..
Sincerely,
Gregor (Krek.) Hakkenberg
Dear all,
I would like to add my contribution to this discussion, but crucially important is where we stand in this process.
Hans talks about an acte de vente "which was passed in May 2008. Is that the acte authentique or the compromise de vente?
If it is the compromise de vente, then there is probably no problem. It states (if it is well done) that in the case of any new or newly discovered servitudes have a suspensive effect (suspensive condition). If the servitude is detrimental for the buyer (in the sense of 'enjoyment') then the condition precedent can be turned into a subversive. This is yet another process, but it is do able.
Based on the email, however, I think it’s more likely the case that the acte authentique has already passed. In which case it is only really a question of whether the holder of the servitude can get his rights respected. I agree with Greg that the notary (the party who passed the acte authentique) would first have to figure out whether this claim is valid. He will make an official report of it (at the expense of the person claiming to have the right of way). Until this time you can just ignore the servitude (or what the servitude once was) and thus refuse the neighbor right of way. Servitudes that are not included in subsequent actes have a weak legal status, but if the notary come to the conclusion that the claim is valid, then it is perfectly possible for a case to go to court so a judge can rule on this. I am less pessimistic about the outcome than Gregor. If a judge passes judgement in favor of the servitude holder, it is then possible to recover any eventuel damages from the notary.
Wim van Teeffelen Dear Wim and Gregor,
Many thanks for following this case.
For a further and more detailed explanation: We are now at the stage of the acte de vente or the acte authentique. We have not yet received a copy since we have signed an acte de vente. Can the notary distribute copies now that she knows (pending research) that there may be an error (namely that there are no servitudes)?
Am I right in saying that if and when the notary confirms that the claim is valid, from that moment the servitude holder can exercise his rights until such time that the court passes another judgement?
Who has the last word, the "notary"? The notary of the vendor has researched the servitudes. I have the impression that the notary of the buyer (us) accepted unquestionably what the notary of the seller established. I would say that the notary of the vendor is the responsible party from whom the damages should be recovered. On this point we are have a strong opinion. I think you talk too fast about 5 years before the court ruling.
Does the central controlling body of notaries in France - if indeed ther is one – have any authority in such a case or it do they not get involved?
If you want it, we can keep you informed of developments.
Once again our thanks.
Sincerely,
Hans Dear Hans,
It is customary that some time (often alot) passes between signing the acte authentique and issuing the official ownership document. This may only happen when the transaction is recorded and if all the various fees are paid. But the sale has been passed and is legal! If all goes well, you will receive an attestation issued by the notary, immediately after signing the deed. This allows you to prove that you are the new owner. In principle, the alleged servitude holder can claim his rights from you. You can flatly refuse, the acte authentique in hand (ie there is no right of way in it). If the alleged servitude-holder does not agree, he can hire a notary of his choice (the choice is up to him, it does not have to be the seller’s notary), to investigate his claim. Until there is a ruling on each claim you can refuse. You have indeed in good faith signed the acte authentique. Once the notary has completed his investigation (however long that takes), there are two possibilities: the notary writes in an official report that the claim is justified, or he writes off the claim.
In the first case, the claim holder can come by to pursue his claim. You can then file a lawsuit (against the vendors notary, due to lack of research), but for the time being you must recognize the claim and honor his right of way. Should the judgement come that it was an error of the selling solicitor, not the purchasing solicitor. The selling solicitor can then be dealt with a claim fro damages. In the second case, the refused claim holder can still go to court to contest the outcome of the notary. You do not recognize the claim, and you are obviously very strong: in fact two investigations have shown that there is no rightful claim. If the court still finds the claim holder in the right, you should honor the claim and you in turn begin a lawsuit against the notary of the vendor.
Legal proceedings in France are indeed slow, but 5 years is a very pessimistic approximate. But it will easily cost a year.
The Brotherhood of notaries will only get involved if a notary has made a mistake. So far it is not the case.
Sincerely
Wim van Teeffelen
www.ondernemen-frankrijk.nl
| 
