Tuesday, June 30, 2009

Selling your French property

Unlike their British counterparts, French estate agents are licensed by the local Prefecture and controlled by strict legilsation and the rules of either of the two main professional associations FNAIM or SNPI, to which they usually belong. Their offices can be subject to unannounced spot checks by the police and licensing authorities, and their professional body. If they receive and hold client monies (such as a depsoit on a sale) they should be licensed to do this and have special indemnity insurance (a certificate displayed in the office should show their authorisation and the amount insured), in addition to their professional liability cover.

Agencies employ negotiators on a salary or commission only basis, while some 'property negotiators' work largely independently while being loosely attached to an agency as an agent commercial. If they are correctly registered with the Prefecture they are entitled to sign sales mandates (described below), negotiate between buyers and sellers, and help conclude property transactions, on behalf of the agency.

As a vendor, you can instruct one or more agents to handle the marketing and sale of your property, signing either an exclusive sales mandate (mandat simple), usually for three months renewable, with a single agent; or non-exclusive mandates (mandat simple sans exclusivité) with several agents. The mandate authorises the agent to market the property on your behalf, in return for a percentage commission - the amount being stated in percent and figures in the mandate.

There are arguments for and against exclusive or non-exclusive mandates. Some argue the more agents the better chance of a sale, while others prefer to select an agent with a known customer base for your type of property and someone who is prepared to work extra hard to achieve a sale. Under a simple mandate, problems can arise between rival agents as to who actually introduced a client/buyer and is entitled to their commission. Also in cases where a vendor claims he found the buyer himself through his own efforts.

The consequences of signing a mandate are serious: for example, you cannot change your mind and decide not to sell (normally within the first three months); and if a client originally introduced by an agent returns after a lapse of time (12 - 24 months) and makes an offer to buy your property, the agent will usually be entitled to his commission.

If a client presents you with a willing client offering the full asking price on the property, you cannot refuse or offer the property to someone else, withou becoming liable for the agent's commission - he has after all fulfilled his part of the contract with you.

Once a client makes an initial offer in writing, below the full asking price, the agent should contact you to see if this is acceptable, and you may agree or decide to hang on and await a better offer. Once an initial offer has been agreed, at or below the full asking price, it is difficult for either side to withdraw, and the agent will be pressing both parties to proceed to the compromis de vente.

The transaction should then proceed smoothly as described in the postings below on Sales.