Selling your French home? Targeting your potential buyer.........

Marketing is very much about tailoing your product or service to a specific group of potential buyers which you have identified from research. And depending on whether you own a one-room apartment or a three-bed house there is someone out there looking for exactly what you are trying to sell.

Recent research from America - and it can easily be applied to France - has identified five specific groups of buyers and what it is they are looking for and why. According to the figures:

- 30% of buyers are looking for a larger home as a result of an increase in family size (arrival of a second or third child for example)

- 27% are looking for their first 'real home' as a result of marriage or deciding to live together

- 24% as a result of a change in family circumstances, such as children leaving home or a change of job

- 39% of 55-65 year olds are looking ahead to retirement

- 28% of over 65s have reached retirement and are looking to downsize or move to a more relaxed area (such as the huge north/south shift in France as the post-war generation comes up to retirement and have a property to sell whose value has risen due to house price inflation.

Whether you are trying to sell your apartment or house to a buyer from virtually any of these groups, the most important criteria have been identified as:

- most typical purchase is a three-bedroom, two bathroom property

- 86% rate the kitchen as the most important deciding factor

- 50% are looking for a master bedroom or parental suite with its own bathroom etc.

- the principal living space tends to include an open-plan kitchen, dining area and lounge area

- quality of outside space, such as a terrace, garden, pool etc


With acknowledgements to realtor.com USA.

Posted by peterderouffignac@orange.fr

Furnished properties sell faster....

As any estate agent will tell you, when home hunting  potential buyers are more likely to be attracted by houses or apartments that are presented furnished rather those which have been stripped of their contents as the previous owners/sellers have already moved out. This is of course the reason why speculative housing developers invariably feature a 'show house' to give buyers an idea of what the property could like for potential purchasers.

Totally empty properties are difficult to visualise and viewers are often unable to imagine what their furniture would look like occupying the huge empty spaces around - though in fact some rooms may look smaller when empty than they actually are. Empty spaces tend to show off any minor defects - tired decor, worn or damaged floors, loose electrical fittings - that should have been put right by the previous owners before putting the property on the market.

There are a number of possible solutions if you find yourself having to sell your property in its empty state, among them the tried and tested 'home staging'. Proponents of this alternative include France's best known estate agent Stephen Plaza who in addition to owning a network of estate agencies is the star of several TV programmes such as 'Chasseurs de'appartement' (apartment hunters) and 'Maison à vendre' (house for sale) both on Channel 6. Plaza works with a number of designers and contractors who, in the worst cases, transform typical over-crowded, over-furnished pre- and post-war houses owned by our parents and grand-parents, and turns them into their light and airy modern equivalent. Typical budgets for a major transformation are often around 2 to 3 per cent of the asking price, and almost invariably result in a number of offers and a sale - including many which have languished on the market for weeks or months.  

If your home is empty but otherwise in good repair, you could employ a designer specialising in home staging who can furnish all or some of the rooms with furniture and acccessories for the occasion - say, the living room and one of the bedrooms if you are on a tight budget.  A lower cost solution is to present a computerised version on a laptop or similar showing what a room could look life when furnished. And floor plans which over the years seem to have disappeared from the details supplied by estate agents invariably help potential buyers to visualise where their furniture might fit.

When you decide to put your property on the market is the time to take photographs showing it furnished, as picture of empty rooms are almost worthless when trying to sell.

Finally, it does without saying that your pre-sale preparations should include fixing all those nagging little defects you may have been putting off for years, such as loose tiles, unfinished paintwork, dripping taps, cracked windows, and being ruthless in your de-cluttering.

France - record high property prices?

Two reports in France's LeFigaro* newspaper higlight the continued rise in French property  prices - now at record levels in major French cities, and why it is a good time now to put your property on the market if you are thinking of selling.

First, property prices approaching record levels.  The evidence is onverhwelming, and following a recovery of the property market in 2016 - by over 5% in the Paris area and over 2 per cent elsewhere - the trend seems to be continuing in the first three months of 2017, despite the common belief that election years are bad for property sales (the French go to the polls in two weeks to begin the process of electing a new President and a new parliament).

Paris still holds the record for the highest average price per square metre - currently just over 8,500 euros , followed by Nice (3,800), Lyon (3,440), Bordeaux (3,2776) and Toulouse (2,640). Most of these prices reflect an increase of 5% or more over 2016.

Traditionally springtime and the arrival of warmer weather help boost sales, as buyers prefer to get their house move organised and settle before the July/August holiday break and ahead of the la rentrée in September/October when children return to school and students start at university. Job changes are also popularly organised with a September start in mind and may involve a change of location.

Another group of buyers are the retired who need to get their house hunting done before the July/August recess when second homes may be occupied by their owners or let to summer tenants, and unavaialble for viewing. The traditional holiday period may also delay completion of the property sale as lawyers and much needed public officials themselves go on hliday. Hence the need to get your property selling or buying done before the end of June!

*LeFigaro.fr

Posted by peterdanton@orange.fr

French furnished lettings - security for both owner and tenant

French furnished lettings provide a measure of security both for the owner of the property and the tenant/occupier, following a tightening of the rules in the loi Alur of March 2014, promoted by the then housing minister Cecile Duflot.

Many are based on the regulations concerning unfurnished properties but offer a briefer period of tenure - 12 months renewable, reduced to 9 months in the case of a term-time student lettings - with the option to renew the tenancy and the right of the tenant to leave the property at any time at 4 weels notice.

On signing the tenancy agreement, the owner can ask for a security deposit of two months' rent (note that the maximum for unfurnished tenancies is just one month) and other provisions using a standard contract which will include an inventory of the contents. In order for a property to be classified as 'furnished' certain basic items must be provided by the owner, including means of eating, sleeping, heating etc and listed on a standard form which will become part of the lease and agreed between the parties.

If the owner wishes to give notice to the tenant, he can justify this only on restricted grounds,such as non-payment of rent or serious misuse, or his intention to occupy the property for his own use or in order to sell it.

How much to charge? It is possible for anyone with disposable capital to buy a property which has a tenant already in place (either furnished or unfurnished) so the rent will be known. The short-term furnished market is fairly competitive, offering a wide range of choice for a prospective tenant who will normally be well informed about going rates in the locality - from agency websites and informally from friends and colleagues. In some areas, including Paris, rents can be controlled by the local authority under new regulations (2016, 2017) designed to prevent price inflation where there is a known shortgage of available properties. Universities and other institutions may also have their own rules should a property owner wish to have his property added to their housing list.

Short term renters, according to the experts*, often have a different profile from long-termers and owner/occupiers, They may be younger, prepared to live in a small space (say, 20 square metres) on higher floors with no lift, and in cental/mixed areas that might not attract long stayers but which offer quick access to public transport, local shopping and other basic amenities, And if the property is well furnished and decorated and offers something a bit special renters may be prepared to pay an above-average rent.

Furnished lets by their nature mean a higher turnover of occupants than with unfurnished properties, and will need to be constantly refreshed and furniture  replaced. It may be possible to let them on a very short basis as holiday lets (such as through AirBnb) in popular tourist areas. In the case of 9-month student let, a two to three month summer rental might be possible - if the property is large enought for at least two people. If not, you could try attracting a seasonal worker. All these options require hands-on management in order to succeed.

* "Comment je suis devenue rentière" by Elise Franck describes in detail how she became the owner of several short-term rental properties, with numerous tips, illustrations and cost breakdowns. Essential reading, along with her website which cotains a lot of useful advice including before and after illustrations and examples of successful renovations.

Posted by peterdanton@orange.fr

Property sales rise 5% during 2016 in Pyrénées-Orientales

Sales of property during 2016 - excluding new-builds - rose by a healthy 5% in Pyrénées-Orientales over previous years - and surpassing the levels of the boom years 2000-2007following the switch to the euro and the price inflation that followed; together with a slowdown in sales - including by British and other non-French purchasers during the years prior to 2000  when prices were ridiculously low compared with Britain - a two room apartment on the beach for less than the equivalent of £20 000 was not uncommon.

The region is a now recognised first-choice for retirees from the post-war boom generation who benefited from full employment and increases in living standards during the 'thirty glorious' years up to 1980 and the shock of the first oil price rises. The typical French buyer from that period owns a house in or near Paris which can be sold for a high price that offers a comfortable budget with which to buy an apartment or house in the rural or coastal south, an area where the average price per square metre can be as low 1200 euros.......

An article in the current Logic-immo journal speaks of the attraction of the numerous small villages surrounding Perpignan, within easy reach of the Mediterranean coast (where prices are higher - for example around 4000 per square metre in Argelès-sur-mer) and the mountains inland, together with the proximity of the Spanish border for low-cost shopping; and Barcelona reached by car in two hours or fast TGV rail services (under 1 hour from Perpignan).

Posted by peterdanton@orange.fr

Paris 'chambres de bonne' to be converted into apartments

There are over a hundred thousand chambres de bonne - small attic rooms on the top floors of residential apartments, and traditionally used to house maids working for the owners below. As the employment of maids has decline over the years, owners tended to hold onto these tiny spaces, too small to legally rent (about 15% were let where they conformed to minimal size regulations) while the rest were left empty or used for storage. Their value however continue to rise with property price inflation, and was estimaed to have risen by over 80% since 1990. 

The city of Paris has recently inaugurated a policy of buying-up these attic spaces, and joining two or more together to create larger, saleable apartments.  Under this scheme an average of four chambres are linked together to create an apartment of 40 up to 130 sqare metres. When completed, they are sold in the smarter districts at between 11,500 and 12,500 euros per square metres. 

The first experiment has already resulted in a total sell-out - mainly to French buyers, who find these attic lofts attractive, particularly where the package includes improve access, such as widening the 'back stairs' or installing or extending a lift. 

These efforts alone wil not solve the capital's perenial housing problem but with over 100,000 empty chambres de bonne to working with, some thirty to forty thousand new homes could be created. 

Posted by peterdanton@orange.fr

Taking your home with you when you move

This post is inspired by an an Amercian TV series currently being shown on French television* about buying, transporting and renovating timber based affordable homes which can be sited wherever you want.

Much of the action shown takes place around Forth Worth (Texas) and features a series of entrepreneurs - a young couple husband and wife team, two sisters of a certain age, and a fearsome grandfather working solo - who buy up decrepit wooden homes sold at auction (sight unseen, buyers were not allowed inside until after purchase) and rarely costing $200 and often much less.

The secret is that the properties are large enough to include one or two bedrooms - but are transportable using a wide-load trailer and benefiting from the areas major highways. The journeys are generally around 50 miles, with an obligatory police escort, and in only one case it was found necessary to saw the building in two (it was T-shaped) and transport it in two loads. Average cost of transport including a police escort was around $5,000.

Back at base the entrepreneur(s) then proceed to convert and renovate the wooden structure, paying particularly attention to the floor and foundations, the ceilings and roof, plumbing and electrics etc - but rarely spending more than $10,000 to transform the property into a desirable small home.

On completion the wooden home is then sold agan at auction, for prices averaging around $20,000 and occasionally reaching $30,000 or more for a particularly large or attractive model. Buyers than were faced with the cost of further transporting the property to their own site and placing it onto the necessary concrete foundations, and connecting to the main services. As a result they ended up owning a desirable new property for a fraction of the normal costs of a bricks-and-mortar version on an estate.

A colleague who spoke to me about this type of housing solution said it was common in some parts of Australia for owners of this type of property to transport it by wide-loader to where they wished to move , enabling them to continue living in their existing home in which they had already invested.

It should go without saying that politicians and planners should be bold enough to permit alternatives such as those shown in the American programme. Note finally that the average $30,000 to $45,000 cost is about one-tenth of the prices being quoted for the British 'garden villages' recently announced by the Conservative government.

* French channel 6ter (22) Sundays from 11.00am 'Rénovation impossible'

Posted by peterdanton@orange.fr

How to downsize without becoming a minimalist!

As I have suggested in earlier posts, moving into a smaller property when you approach retirement does not necessarily mean that you have to adopt a spartan life and live out your retirement as a confirmed - or newly converted - minimalist. Downsizing can be a gentle process and can mean occupying no more space than you actually need and enjoying the savings - in cost, time and effort - that can result.

- As I have noted below in my advice about acquiring a (French) property, owning or renting no more space that you practically need saves money (a surplus can be saved, invested or put into your 'just in case' fund); it costs less in heating, lighting and maintenance; costs less to furnish; and offers savings in local taxes, rates, insurance and uitilities.

- Acquiring a smaller space means that you can consider buying rather than renting - if you buy wisely you will invariably get your money back on re-sale, even make a profit. You may be able to pay cash, using the proceeds of your own sale, rather than paying interest on a mortgage. Every case is different and you need to seek professional advice before deciding. 

- Simply giving up the idea of a spare bedroom(s) can help; Many I have seen gradually end up as a junk store, while you can still invite friends and family to visit and enjoy their stay in a rented house or flat - particularly good value outside the main season, and offering a 'breathing space' for both you and your visitors during a long stay.

- In my smallish loft the couch in the living room quickly converts to a double bed (duvets, linen etc are stored below the seating) and is ideal for close friends staying over for a night or two. I also happen to live above a bed-and-breakfast (chambres d'hotes) which offers another convenient alternative.

- When I lived in a studio on the marina I noticed that many boat owners also own a small studio property for visitors, as even a largish boat can become unbearbaly crowded with too many aboard. (When I left I in fact sold my studio to a 'typical' boat owner couple. They also slept 'on land' overnight if the weather was particularly stormy).

- Living in a small space also means that you become automatically tidy. Choosing your new space wisely means that you have ensured there is sufficient space for your (fewer) possessions and your motto can be the well tried 'a place for everything and everything in its place'. It works.

- Among the reasons why I left the marina and moved into a small town were the fact that the marina and adjoining 7 km beach attracted ten times the local population during the high season (principally July and August) and became eerily quiet for the rest of the year. I lived in a typical 'holiday apartment' block of 60 flats, and at most five or six of us lived there all year round (convenient when I was out and about property selling but lonely during quiet periods).

- As a result shopping and other essential services closed outside the season and a lot of journies had to be made by car (which I wanted to get rid of). I had done this  in Central London, hiring as and when needed. Surprisingly cost effective, with a full tank and a clean car when I needed it, and no maintenance!

- Apartments and houses in the heart a typical small French town tend to be cheaper because they invariably lack car their own parking space or a garage. It is possible to use public (paid) parking in the local streets or space in the many private car parks nearby. Property prices rise for just-off-town-centre properties that include parking - and perhaps a garden - and 10 - 15 minutes walk to the town centre.

- I now live in the heart of the historic old town, in a gated pedestrian alley, and surrounded by pedestrian-only streets. Within 5 minutes walk I can reach my bank, the main post office, my doctor and numerous specialist health services like X-rays and blood tests; plus a supermarket and two mini-markets that are open till 8 pm and Sunday mornings, and the daily open market in the town square (and an indoor market next to my bank in early 2017).

- These are just some of the reasons why I chose to move where and when I did. I had a lot of freedom of choice to make my own decisions and your own personal case may be entirely different. As noted above you should seek professional advice for some decisions. I have made mistakes and had a lot of advice from close friends - which I have tried to follow. Honest!

Posted by peterdanton@orange.fr




  

Buying or selling - preparing a property for sale

If you are prepating to move here's what you can do to help sell your property - and what buyers are often lookng for - including you......

According to recent research the way houses and apartments are sold has gradually changed over the last decade - owners are now taking more care how to present their home (known as 'house doctoring') and buyers are taking less time to search, viewing fewer properties before deciding, and come armed with a list of 'must-haves' which will define their choice.

- Typically buyers spend more time on the internet searching through agency websites and consulting private sales announcements and less time on the actual search, down to actually viewing just two or three properties in many cases. Items on many wish-lists include a preference for modern or older style properties, the latter often defined as 'le charme de l'ancien'. Older houses are seen as more solid and particularly if recently converted will appeal to younger buyers making their first purchase.

- Other popular requirements include:
- a large living room, preferably with an open plan (American) kitchen (rare in older properties unless recently converted)
- separate bedrooms for each child, to include a place to do homework, store books and toys, and convertible to a 'teenage den' in due course
- sufficient space and ceiling height to install a mezzanine
- separate larger bedroom for the parents (chambre/suite parentale) to include its own bath or shower room, and if possible a separate clothes storage area - known as le dressing.
- at least one more WC/shower room
- sufficient storage generally, though this is one of the easiest to remedy (numerous storage solutions offered at DIY centres etc)
- large garage - to include space for a workshop or hobbies, storage of sports or camping gear
- outside space - balcony or terrace, space for pets and children to play, possibly a swimming pool as you move further south
- parquet flooring, tiles acceptable in kitchen or bathroom
- a separate WC is a bonus - especially if it is equipped (rarely in my experience) with a wash-hand basin (to avoid visitors using your bathroom).

- A house or apartment with recent, neutral décor, as well as items from the above wish-list will make the job of selling much easier, provided it is well photographed and presented in the appropriate media. A pleasant location, including nice views, are a bonus though some buyers may compromise on either if the property itself really attracts them.

- Property descriptions to note include 'bon standing' (posh!), 'quartier tranqillle' (quiet neighbourhood), 'tout à l'egout' (connected to main drainage).

- Totally empty properties may be harder to sell as potential buyers find it difficult to visualise the overall space and imagine themselves in place. Leaving curtains hanging can help soften the space.

- Small spaces look better when furnished with a few large pieces of furniture (such as an attractive settee) rather than an abundance of smaller pieces, often advertised as 'designed for small spaces'

- I personally dislike convertible or multi-functional furniture - such as a sofa-bed (canapé) that has to be opened and fitted with sheets, blankets etc every night

- I also have a thing about ceiling (pendant) lights, particularly chandeliers, unless you happen to live in a chateau. They are best used over a table (such as a dining table) or kitchen counter, rather than as general room lighting - which can be harsh.

- Ceiling spotlights are much more subtle, particularly if you can adjust them to highlight interesting features of the property, such as wood beams.  You can do the same with 'mood' lighting, dimmers and 'task' lighting for example in your work area.

- If you are a potential buyer, your wish-list may include some or all of the above, and if these desirable elements are not already in place, you can view the property with an eye to its potential for conversion. This is where you may need to use your imagination. Many properties are on sale because their owners need more space and unless they have de-cluttered the property it will necessarily look small and un-manageable.

- You need to look at potential for shifting walls, taking advantage of large windows, introducing lighter colours (not patterned) on walls, using 'accent colours' to emphasise some features, furnishing with more modern pieces, and generally bringing the property up to modern tastes, either your own or that of a potential buyer.

- You may be depressed by the radical changes necessary to make your home  saleable, but keep in mind that your potential buyers will hopefully be the new owners with carte blanche to do what they want with your former home.

- You can get ideas and inspiration watching French TV programmes hosted by estate agent Stephane Plaza such as "Cherche appartement ou maison" featuring property buyers and "Maison à vendre" about preparing properties for sale.The average spend by vendors in the second programme is normally between 3 and 4 per cent of the asking price.  Both on Channel 6.

* An excellent source for design ideas and photographs of small spaces before and after conversions is the website elise-franck.com as well as her book which describes in great details how she goes about converting rundown  properties (in Paris, Lyon, Marseilles)  either for sale or short-term furnished letting. She also provide a consultancy service to clients. Packed with colour photographs and detailed cost breakdowns.

Posted by peter-danton@orange.fr

Home sellers in Paris - 40% are retired!

According to figures released by Notaires de Frances and reported in Le Figaro today, an analysis of actual property sellers shows that 60% describe themselves as 'executives' and some 40% as retired (one-third of them being over the age of 60).

Neither figure is surpising, given the average per-square-metre price of 8240 euros in the central districts, and that older owners - the post-war baby-boomer generation and the beneficiaries of stable employment up to the 1980s - have been watching their asset grow and are now cashing-in, and either downsizing and/or moving south to the sun. Regions such as Languedoc-Roussillon on the Mediterranean coast are among the fastest growing in France, and property prices still well below those of Province-Cote d'Azur.

Note also that currently only one-third of the population in Central Paris own their principal or main home, the remaining two-thirds being obliged to rent.......

When does my property become my principal home?

If you decide to move to France and live permanently you should ensure that your French property is classified as your 'main and principal home' - if only to avoid paying capital gains tax if you decide to sell.

By declaring your presence and completing an annual French tax return, your new home will normally be accepted as your principal place of residence within 12 months of occupation. Any additional checks - for example, if you decided to sell within a few months of your arrival - might include checking electricity and water consumption, possession of a French driving licence and a 'Carte Vitale' which provides access to the French healthcare system.

French tax returns cover the period January to December and are issued in March/April for completion by the end of May/June. In your first year of arrival you should obtain the necessary forms from your local tax office (or perhaps the Mairie) and in future years they will be automatically sent to your French address. They can also be completed and submitted on-line. 

Simplifying the rules when buying a French apartment

Following the widespread criticism of the loi Alur, the French government has announced imminent changes to the procedures for buying and selling apartments and other types of property situated within a co-ownership complex or condominium.

Under the loi Alur, promoted by the then housing minister Cecile Duflot, owners are asked to provide large amounts of extra documentation detailing the history of the building in which the property is situated, including any works undertaken and planned, and detailed accounts going back several years. These have to be provided by the syndic (the building managers) before a would-be purchaser signs a pre-contract ('compromis de vente') and at which point he/she is entitled to withdraw - creating additional costs for the owner/vendor for the work needed to compile the dossier.

The new procedures have created serious delays, of up to three or more months, before the 'compromis' can be prepared and hopefully signed, and in some cases have increased the number of documents required from 30 to 300 or more pages.

No detailed information about the proposed changes is as yet available and is awaited in a decree promised for mid-September. The only detail announced is that documents may be sent in electronic form rather than hard copy, but their is no indication about how the quantity may be reduced. 

Choosing a French estate agent

Though many owners choose to go it alone and successfully market and sell their French property, the vast majority of property transactions pass through estate agents. How then to choose your French estate agent? I offer some guidelines:

1. Look around your area and check which estate agents handle the same sort of property as the one you are trying to sell. Some estate agents specialise in high value chateaux and wine domains, while others may have more experience selling holiday apartments or moderately priced houses either as first or second homes.

2. Check that your property fits naturally into the agency's selection, including your hoped for price - if your propertyly is more expensive, be prepared to argue why, and listen to the agent's advice.  Bear in mind that no two properties, even in the sqme street, are ever entirely alike.

3. You can sign an exclusive contract with a sole agency, or choose to appoint more than one, and at the same time reeserve the right to market and sell the property yourself.

4. If you decide to appoint more than one agency, there should be a logical reason - such as achieving wider coverage. There is little value in appointing several agents in the same town or local area, and prospective buyers may be confused and wonder if you are desperate to sell - and why?  A local agency plus one or two with, say, British connections can reach a wider market for your property and improve your chances of finding a buyer.But note point 5 below.

5. When I worked in a French estate agency, with over 60 years experience in the area and four local offices, I found that:
- buyers tend to come to the office, having seen local publicity or looked in the window, either unannounced or by appointment
- they tended to visit a number of estate agencies in the region and may have seen the same or similar properties via another agent
- buyers generally knew the area from holidays or previous visits and had a fairly clear idea of what they wanted, including how much they could afford to spend
- our role as 'negotiators' was principally to listen and try and match the properties on our boooks to the potential buyers' aspirations, then accompanying them on visits to those selected from our online catalogue (totalling some 500 properties of all types)
- the bulk of our work, once a sale was achieved, was supervising the transaction through to completion, in close cooperation with the Notaire handling the sale

6. Finally to dispell some popular misconceptions:
- estate agencies are generally not in fierce competion with each other, even in slow times and there is little chance for aggressive 'marketing' (see 5 above again) of a property, sometimes expected by the seller. Property selling takes time, buyers are naturally cautious and may dislike 'pushy' sales tactics. They have a wide range to choose from, even in busy times, and may even change their plans.

French property prices - latest trends

One of the most accurate surveys of French property prices comes from Notaires de France, who together with INSEE (a government research organisation) base their figures on actual transactions completed over a 12 month period. They have just produced their report for 2014 and the main conclusions are as follows:

House prices have fallen dramatically only in some areas, particularly second homes located remote inland sectors. Examples include  La Creuse a 50% drop (since 2008), and Périgord, le Gers and Normandie (20 to 25% drop). Whereas overall prices are down from 1 to 3% overall in the rest of France.

Prices for apartments show similar wide variations, from extremes such as Reims (11.1% drop), Toulon (11.2% drop), Limoges (9.1% drop), St Etienne (10.1% drop), while overall in  the rest of the country price deductions have been in the order of 1 to 4 per cent.

Some cities showed significant rises in house prices (older properties) during 2014 compared with 2013, and include Marseille (4.2%), Grenoble (10.9%), and Dijon (7.3%), while several towns in the north of France showed significant falls - Le Havre (14.2%), Rouen (9.1%), Lille (6.6%) and Orléans (9.3%).

Overall there were an estimated 700 000 proerty transactions completed during 2014 - just 3% less than recorded in January 2014 for the previous year.

The overall outlook is seen as promising, with mortgage interest rates at a record low, but France's high unemployment and general uncertainty about the 'recovery' are discouraging many would-be buyers from purchasing.

Bear in mind always that average prices and overall trends are simply indicators, and no two properties are precisely alike, as are the individual circumstances in which sellers and buyers arrive at a common accord.

Buying a second home in France

If you already live in France and decide you wish to move and buy another property, then you need to plan your sale and purchase carefully to ensure the optimim tax benefits.

If your present home in France is recognised by the tax authorities as your 'main and principle residence' and you submit French tax returns from this address, then on sale your home will not be subject to the property taxes (capital gains tax) and charges that apply to selling  second homes in France. If you acquire your 'second' home before selling the primary home (and move into it) then you normally have 12 months to sell the first home, without it attracting capital gains tax. In today's slower property market you may find it difficult to sell a property within this period of time, which can accordingly be risky if you wish to avoid the tax - and also repay a bridging loan (normally repayable within two years).

In order to reduce these risks, you could sell your first home before committing to purchase the second home - this requires perseverance and a cetain amount of juggling between buyers and sellers, if one transaction (buying your new home) depends on the other (selling your existing home) - but it can be done. I have found that using the same Notaire to handle both transactions can help ensure the process runs smoothly. In the worst circumstances you might have to move out of you first home and move into temporary accommodation until completion of your second (new) homes.

Alternatively, you can purchase your second home but continue to remain in the first home until you manage to sell it (free of capital gains tax), as the second home would not be liable for CGT unless you decided to sell it while you first home was still designated as your principal residence. 

With careful timing and good advice, selling one property and buying another in the above circumstances should be relatively straightforward.

French property searching: the 'bon de visite'

Quite often the question arises about the 'bon de visite' - it's role and validity in the French property searching and buying process. Here I try to explain briefly.

When an owner decides to put his/her property up for sale, he has a number of options -  to try and sell it privately, or to place the property with one or more state agents; or to use a combination of the above.

If you decide to use an estate agency, as owner you will agree a 'mandat de vente' under which the agent agrees to market and try and sell your property, against an agreed commission, based on a percentage of the sale price. If you use only one agent you can sign a 'mandat exclusif' under which the agent has the sole right to market your property, and even if you attract a buyer yourself, you normally expect to pay the agent a commission - or at least an agreed portion of it.

If you want to use use more than one agency, you can sign a number of 'mandats simples' - and indeed include in the contract the right to try and market yourself. This alternative can give rise to confusion and even disputes where it is unclear which agent 'first introduced' the client to the property and is therefore entiled to his/her commission in the event of a sale. Hence the 'bon de visite'.

When a potential buyer buyer walks into an estate agency to help find a suitable property and is eventually taken on a number of visits, he/she will sign a 'bon de visite'. This is a simple document which includes and name and other details of the potential buyer,  and most importantly a list identifying the properties visited with the agent. In the event of a dispute over commission or who first introduced a buyer to a property, the 'bon de visite' becomes part of the evidence.

Note throughout all this, that it is the owner/vendor who is bound by the terms of the mandate which he/she signed with one or more agents, and not the buyer. A vendor who is in breach his agreement with the agency, for example by not paying the agency's commission when the agency has fairly secured a sale, can be subject to prosecution through the courts and subject to costs and damages.Note finally that a vendor who has signed one or more 'mandats simples' will find that among their conditions is the obligation to notify the agency of a buyer either introduced by another agency or privately. 

Estimating the value of a French property

If you are thinking of buying or selling a French property, you may be interested in a short article in this morning's LeFigaro which summarises the pirnciple factors that can affect the value of a property, for better or worse. Here I summarise the main points and (French) terms used.

- 'Surface' - More square metres normally cost more money! Square metres are calculated where the ceiling height is 1.80 metres or more. Mezzanines are not counted as officially  habitable space even when 1.8 metres or more in height. The 'loi Carrez' governs the sale/purchase of apartments and in all cases if the measurement of the area proves to be 5% inaccurate or more (over-estimated) a buyer may claim compensation.

'Terrain' - A tiny patch of grass or space enough to include a pool, a tennis court etc.

'Implantation' - Refers to where the property is located - urban, suburban, rural; close to local services or not; undesirtable elements such as a main road, factory entrance, noisy bar etc nearby

'Agencements des pièces' - Refers to the interior layout of the property, particularly bathroom/WC(s), wasted space (corridors, landings), inter-communicating bedrooms etc.

'Aspecte' - Which way does the property face in relation to natural light, the sun, a nice view etc

'Date de construction' - What were the applicables norms at the time compared to present day?

State of the interior 'décoration' and 'equipements' (such as kitchens etc, gas, electrics, plumbing) - and much will it cost to put right?

'Dépendances' - Presence or absence of outbuildings such as garage etc.

'Servitudes' - restrictions such as a right of way across the property

'Etat du marché - State of the local property market

To the above list I would add, in the case of an apartment or villa, within a co-ownership property ('copropriété') the level of monthly management and service charges, which can be high where there are shared extras such as a concierge, parking a pool, extensive gardens etc.

The article adds that while estate agents may offer a free 'estimation' they may pitch the price too high (to raise the owner's expectations and secure a mandate to sell) or too low (in the hope of a quick sale). An independent professional valuation will cost between 200 and 700 euros.

Source. lefigaro.fr 18 March 2015 

Selling property? Signing an agency mandate

If you are selling a property in France you  can do this either privately or using the services of an estate agency - or indeed using a combination of both. Here briefly are the options available:

1. Estate agency - 'mandat simple' (simple mandate). Signing a simple mandate with an estate agency, either French and/or British, enables you to benefit from the marketing skills of the agency, and normally also allows you to market the property yourself - or indeed use two or more agencies at the same time. The 'simple mandate' sets out the address and description of the property and the commission - expressed as a percentage of the selling price and in figures - that the agency is entitled to receive if they manage to secure a buyer and a sale results. It is generally advisable to use no more than three agencies, particularly if they are all located close to the property, as this can create confusion among potential buyers. If using more than one agent, it is sensible to agree the same advertised price with each of them, based on one or more estimates of the property's value. Using several agencies can also allow you to choose, for example, one or more local ones, and perhapss an 'international' agency that advertises to non-French buyers.

2. Exclusive mandate - 'mandat exclusif'. This is much the same as the above except that you sign a mandate with a single agency and they alone have the right to market and try and sell the property. You do not have the right to appoint other agencies or market the property yourself.

3. How long does the mandante run? In the case of both simple and exclusive mandates, most generally run for a minimum of three months, after which you have the right to cancel. In today's slower property market, an agency may ask for a longer period. If you do not formally cancel the mandate after this initial period, the mandate is presumed to continue until you decide to cancel, or lapses after a fixed period, say 12 months.

4. What if I find a buyer myself? In the case of a simple mandate you can deal with the buyer directly and the agency does not earn any commission. In the case of an exclusive mandate, it is normally agreed that the agency will receive its commission even  where you  have found your own buyer. Disagreements can sometimes arise where it is argued that a 'private' buyer has traced your property through the agency's advertising and you might prefer to negotiate a compromise (part commission) with the agency rather than face possible litigation.

5. What happens if a buyer, introduced by the agency, approaches me direct and wants to negotiate a deal direct? This can and does arise, as such potential buyers invariably wish to offer you the 'net vendeur' price - the sum you would receive after paying the agency commission. This means you are in the same position finncially as if you had sold through the agency. You would also be in breach of contract, having broken the terms of your mandate with the agency and risk being taken to court. Note that French law is very strict on this issue and the courts invariably decide in the agency's favour.

6. What happens if a buyer, originally introduced by the agency, comes back to me after I have cancelled my mandate with the agency? Again, you will find a clause in your agency mandate (simple or exclusive) covering this possibility, normally entitling the agency to its commission for a stated period after cancellation. In practice this can be for six months to two years in my experience and I would advise negotiating  the shortest period possible before signing a mandate.

7. Keeping in contact with the agency - No news generally means 'no buyers' and if your agency is silent for long periods this is invariably why and you might start thinking of changing agencies or other options. For your part, particularly if you have signed a simple mandate, you should inform the agency as soon as you have a firm offer from a genuinely client, in order to avoid wasted visits etc. This enables the agency to mark your property as 'under offer' and you should again inform them if your potential private sale happens to collapse and you want the agency to continue marketing your property.

8. Finally, note that signing a sales mandate with an estate agency means that you, the property vendor, are entering into a binding legal contract, and you need to be fully aware of the implications of the various clauses outlined above. If in doubt, best to take advice before you sign anything.

French property prices - again!

Endless discussion once again on one of the property forums dedicated to living, working and buying/selling property in France, where I have tried once again to explain the possibilities of making a profit - or not. No two cases are ever the same.

Anyone who bought a French property before 2002 probably enjoyed the benefits of ridiculously low prices - two room apartments on the Mediterranean could be bought for the French equialent of £20 000.......This was before the changeover to the Euro which resulted in price inflation, in much the same way as decimalisation did many years earlier in Britain.

I bought a beachside property just before 2002 and some four years later was approached by my next door neighbour who wanted to create two extra bedrooms and buy my apartment. By this time, apartments such as mine were costing three to four times what I had paid, and as I explained to my neighbour - who knew what I had paid for it - I would have to sell it at a price that would enable me to buy a 'replacement' at the new, higher prices. He accepted this argument, as he wanted to stay in the building, and extending his existing apartment was a cheaper option than moving, as he too had bought his present apartment even earlier than me at the then extremely low prices.

The 'profit' I made enabled me to move to a similar but more modern apartment along the beach, in a complex facing a yacht marina. I stayed there for some six years but as the crisis hit the European economy I gradually got fed up with the long winter months (and short noisy high season) and put the property on the market - where it stayed for two years! Eventually my agent found a buyer, a yacht owner who had managed to capture one of the extremely rare berths available (there is a waiting list). I eventually sold for a modest profit and by opting to move to the nearest town - with cheaper average prices - found an atypical property which I like.

Analysing my sale, one has to bear in mind that I sold a property in a 'sought after' area which attracts relativeley wealthy buyers (boat owners) and moved to an 'atypical' apartment (sometimes not easy to sell) - city centre, no parking, third floor, no lift. The owner had had to move for work to another town and the property had been on the market for some 18 months - but he too made a ' profit' by selling to me at 30% more than he paid for it (as I discovered going through the documents provided before I signed the purchase contract).

What I hope these two examples show is that 'normally' you can expecte to at least recover your purchase costs (including transaction fees and taxes) and even in a slow market earn enough 'profit' to enable you to buy a similar type of property - or theoretically, trade down by leaving a smart area for one less popular. I was also fortunate in that both my buyers and my seller wanted to move, and their choices were motivate by special needs - to extend their existing apartment, to live close to their boat, as a result of a change of job. I was in a sense lucky that my own circumstances coincided with theirs - which perhaps confirms the much used adage that your property is only worth what someone is willing to pay for it! 

Apartment sale (2)

Further to my post of 30 May below, I am now in the process of selling my apartment under the new regulations required by the loi Duflot/ALUR , which requires the vendor provide a lot of additional information about the property, some of which was normally made available only at the signature of the acte finale (final document completing the sale) but which now has to be available to the potential buyer before he/she signs the compromis de vente (or pre-contract) and is asked to make a down payment on account, normally based on 10% of the sale price.

As noted below, the new procedures can delay the preparation and signature of the compromis de vente by, according to some estimates, 4 to 6 weeks - leaving the vendor in a position of uncertainty as to whether he has a genuine sale or not. As I wish to buy another property as soon as my present one is sold, it is difficult to agree any firm offers as my purchase will depend on my sale. Working closely with my agent and in cooperation with the buyer, we have taken the following steps which I would recommend to others involved in selling their apartment within  a co-ownership (copropriété) building:

1. I have confirmed with the syndic (building managers) that the charge they will make for supplying the documents required related to the history and management of the building - this will be made of a charge of €400 frais de mutation (change of ownership of the apartment) and an additional €250 for providint eh remaining documents.

2. I have signed and the buyer has countersigned a 'letter of intent to buy'  (lettre d'intention d'achat) which sets out the main terms and conditions that we are asking the notaire to include in the comromis de vente, including:
- Détails of the buyer and seller, description and address of the property
- Confirmation of the sale price including the agent's commission
- Confirmation that the buyer intends paying cash and is not seeking a bank loan or mortgage (this ensures that his cooling-off period (droit de réflexion) will be just seven days after signature of the compromis.
- Confirmation of the likely timescale for preparation and signature of the compromis and if all goes well, final completion.

This is very helpful for me as vendor and once the compromis is signed and a deposit lodged with the notaire, I am in a better position to start looking for another property and making a tentative offer using the above procedure. As my buyer does not wish to move in until early September, I am hoping to complete my purchase to coincide, thus avoiding the need to put my furniture in storage, and hopefully I will move directly from my old apartment to my new one. Fingers crossed!

I will post more information over the coming weeks as it happens.