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One of the questions we receive most frequently from our readers and guests is, “I’m looking to buy an apartment in Paris – where should I start?”
Buying real estate anywhere has its challenges. When you’re navigating listings, visits, brokers, fees, and regulations from across a continent or an ocean, the whole process can grow to herculean proportions. Although anything is surely possible with unlimited time and resources, very few of us possess either in infinite supply. This is where apartment-hunters come in. Specialized in representing buyers and helping them navigate the French real estate red tape, “search agents” can often be your best resource in helping to make the entire process manageable. Which lets you get back to the exciting part: finding the place you’ll call home in one of the most beautiful cities in the world.
We asked our friends at Paris Property Group, renowned Parisian search agents, to give us a list of their top five things to keep in mind as you go about your apartment search. Enjoy, and happy hunting! -Geneviève
1. There’s no Multiple Listing Service (MLS)
Looking for a property in Paris is a full-time job. There’s no MLS, so individual real estate agencies – and there are more than 3,500 – list only their own properties. Sellers can list with more than one agency but that just makes it more likely that your dream property will be snapped up before you get a foot in the door.
Working with a search consultant who is also a licensed real estate agent allows you to access the best properties and can save you time and money. A search consultant scans the agencies’ listings for you and taps into an extensive network of contacts. As they are fully regulated under French law, your interests are protected.
2. One agent typically represents both parties
Traditionally, one real estate agent represents both sides in France. This is a recipe for a conflict of interest. The agent wants to get the property off his or her hands quickly, which is not an incentive for acting in the buyer’s or seller’s interests. The buyer pays the agent’s fee of around 5% of the purchase price.
3. Sellers can’t negotiate above the sale price
The good news for buyers is that once the asking price is fixed in a sales mandate with a licensed realtor, the seller is forbidden to negotiate above it or to raise the price once you have seen the property. If you offer the asking price, the seller is obliged to accept and the property comes off the market. Buyers don’t risk being squeezed out by a competitor coming in with a better offer.
Be aware that if you purchase directly from a private seller, these regulations do not apply, so you could still end up in a bidding war.
4. The buyer doesn’t have the property surveyed
The seller has to provide and pay for a range of diagnostic examinations of the property. Real estate agencies have a legal obligation to include some of the diagnostics results in the property advertisement, so they should be carried out before the property is listed for sale.
The diagnostics are carried out by approved (certified) companies that guarantee their accuracy. They range from the property’s energy efficiency and greenhouse gas effect to the presence of lead or termites.
The preliminary sales contract must include the results of the diagnostics. However, they are mostly informative for the buyer and don’t normally oblige the seller to update or repair the property.
5. Lawyers aren’t involved in property transactions
Unlike in the U.S., lawyers don’t handle property transactions. So, after the seller has accepted your offer, you’ll meet the notaire (notary). He or she is a public official with specialized legal training that differs from that of a lawyer. Notaires handle property transactions in France and also deal with other official acts, such as wills and inheritance.
The notaire normally draws up the preliminary sale contract (promesse de vente), which is the vendor’s undertaking to sell the property. An agent can prepare a contract too, but in that case it’s called a compromis de vente and obliges the vendor to sell and the buyer to buy.
A notaire’s involvement at this stage provides better protection to the buyer. A contract drawn up by an agent may specify, for example, that you owe a fee to the agency whether the sale goes through or not. Also, if you later decide to buy through a company structure or add a co-purchaser, this could be considered a second sale of the property – subject to double the taxes.
A notaire must draw up and sign the final deed of sale to ensure the transaction is legitimate and complies with all the official requirements.
The same notaire can act for both parties, although it’s a good idea to have your own. Their fee is fixed by law and they collect stamp duty and purchase taxes. These fees and taxes vary according to the purchase price, but add up in total to around 7% of the purchase price.
Being aware of all of these issues beforehand helps smooth the path to buying your own little piece of Paris.
Written by Kerstin Bachmann for the HiP Paris Blog. Looking for a fabulous vacation rental in Paris, London, Provence, or Tuscany? Check out Haven in Paris.