Buying French bricks and mortar (5)
Cutting the ‘deal’.
We had found our ‘dream’ home, here in Chaudenay, Burgundy. Now the fun started, making the offer and clinching a deal. It is always the most difficult decision, what price to offer. When it comes to property buying, there is a little bit of a ‘trader’ in most of us and of course one always wishes to avoid ‘over paying’ for a property.
Our own experience in France is that the difference between the ’settlement’ price and the ‘asking’ price is somewhat narrower than what is often the case in our home countries of New Zealand and Australia. Yes, we have been told of transactions where the property was bought at 50% of the asking price (I told them I was in town for 24 hours, I can write them a cheque sort of thing) but within a band of 5% to 15% seems to be more common.
When we sold our village house in St Remy de Provence we received our asking price, and in Nice when we sold our apartment we also received our asking price. In both cases some negotiation occurred over fittings.
As you would anywhere, we sought out any negotiating ‘angles’. Why were the owners selling? (ill health) How long has the property been on the market? (two weeks, so that didn’t help us!) How many owners are there? (6 families - quelle horreur)
We sought guidance from the Immobiliere. We reminded ourselves that real estate agents are the same the world over - their goal is to complete a sale. He counselled us not to make a ’silly’ offer, which seemed to be valid advice.
Pushing against all this was our strong desire to purchase the property. It met our spec, was in good condition, had an excellent location and stood up to a key consideration, resale value.
The offer and acceptance process is reasonably straight forward. The Immobiliere may ask you to complete a simple ‘offer’ document or in our case we forwarded a fax making our offer. After some minor negotiation, a price was agreed and the deal was done. This photo may give you a better idea of what our half a million+ euros bought!
Attention!! Fittings/furniture are nearly always negotiable. It is most important to undestand that ‘fittings’ have quite a different definition in France. The seller is quite entitled to take with them all curtains, floor coverings, light fittings, ovens etc and even cupboards. We learnt this the hard way with our first purchase in St Remy, the house had been stripped bare, naked wires hanging from the walls, a lone free standing kitchen sink was all that remained in the whole house!
So be careful to specify each ‘fitting’ that you wish to retain. There is also another advantage, fittings and or furniture are able to be set aside from the property as a seperate agreed cost and this can create some minor tax savings for you.
So, once you have your agreed price you march off to the Notaire’s office. I will cover this in the next Post of this series.
A Bientot,
Bruce.
August 14th, 2007 at 9:07 am
Is the first picture part of your million dollar dream home shown from a different angle? It’s a bit confusing….
August 14th, 2007 at 9:19 am
Hi Mia,
Sorry to confuse you, it was my sense of humour!! The property is actually quite difficult to present in one picture as it consists of the main Maison, (2nd picture) a Cottage, (1st picture) extensive outbuildings which include apartments, stables, a huge old wine press room, all of which surround a grand central courtyard. There are also expansive lawns and gardens. if you go to our accommodation website www.maisonchaudenay.com the photos there will give you some idea.
Many thanks for your comment. A Bientot, Bruce.
August 14th, 2007 at 9:25 am
Couple of points arising!
1) Asking price.
We found this to be alomst infinitly variable. In any given area you could find two houses as near identical as is possible in France and one would be going for 100k and one would be going for 250k. Try as you might, no logic would account for the difference. But *sometimes* a quiet word with the selling immobliere (remember, *you* pay his fee - even if it is a percentage of the finished price) will reveal the house being sold by a vendor with utterly unreasonable expectations…
That said, we’ve seen more than one case where Unreasonable Expectations have been met by someone else even whilst we’re wondering if it’s even worth an offer…
Friends of ours were recently selling (long story) and based on the price the paid, the condition the house was then in, the condition it was NOW in, even if you disregard the huge amount of work that accounts for the difference, I stuck my neck out and told them to ask for 300k. On the advice of the immobliere who sold it to them in the first place, they asked for 200k. That’s odd - he’s the first person I’d have thought would go for the higher price, so why he thought he couldn’t have got it I don’t know. It sold for the full asking 200k so very quickly that everyone’s now wishing they’d asked a bit more at least.
On the subject of furniture, one HUGE point to remember is that the immoblier’s fee (if one is involved - we bought direct - of which more below) and the notaire’s fee, and some of the taxes involved in the sale, are a percentage of the price of the *immovable* proberty i.e. the house itself. The *more* you can have of your agreed price specifically made out as a payment for Other Things like furniture, kitchen appliances, the better. (Bear in mind the notare will not let you get away with tricks like the €10,000 light fitting!) In our case our house was divided in two and one half already *fully* furnished, so we put down something like €8k in total as furniture. BUT it had to be fully itemised and listed on the vente as it forms part of the contract, which seems a little strange, as things like a coffee machine and a gas-hob kettle are now part of the permanent history of this little house, along with the list of previus owners and what they paid for what reading back like Leviticus!
Also permanently written into the contract is the detail of any morgage you may take out to buy the property, by the way.
Immobliere. You don’t have to have one! In our case, we heard the house was for sale via word of mouth, had a look at the outside, and then asked the vendor to come let us in for a look. (He lived 150km away). He said get the key from the agent, but we pointed out that if we did that then the agent would instantly earn about €12,000 and that would come *out* of the total available pot of cash, i.e. however true it may be in theory that the purchasor pays the agent, the bottom line was that fee would ahve to come out of the cash we could otherwise be offering him. He came. No agent was involved, the agent’s fee went totally out of the picture.
Now of course, not everyone can find out who’s selling a house without going via the agent. And the agent will make damn sure you sign a chit saying he told you first, to secure his fee! But you can find houses for sale with no agent involved by
- keep an eye out for hand-written For Sale boards. If you see such a thing, go see the seller direct, even if your first instinct is to find otu if your tame immoblier knows anything about it. He will - but in the process of finding out and telling you, he’ll have earned his fee!)
- visit your local notaire’s offices. Lots of properties are sold via the notaire. In a small office there may just be a single A4 folder with half a dozen sheets in it. But some larger offices have as big a display of property details as an estate agent! The notaire or his/her staff can arrange visits to properties, etc., just as an immobliere would. Unlike an agent, they don’t actively sell, they sit and wait for enquiries. So the advantage to a *vendor* is to use an agent who will get out there and find him a buyer but, of cousre, for a fee. But if the vendor isn’t in a rush he will realise he may get more money, albeit at a slower speed, by selling via the notaire’s office.
I’m also told, though I’ve not followed up in any way, that you can visit the local tax office and see a list of properties being sold by the state where the owner has defaulted on his property taxes. However, this is more likely to yield up a half-acre of woodland or a… when we see a house with no roof, crumbling walls, and a tree growing out of the window, we refer to it as a “fixer-upper”.
August 14th, 2007 at 10:00 am
Hi Chris,
Hope you are having a good season. Always enjoy reading your informative (and passionate!) experiences. The ‘Asking price’ certainly is a bit of a lottery. For any seller it does pay to do some homework of your own and to be ’strong’ about your price. The French make frequent use of established ‘tables and percentages’ (for many different purposes) and Immobilieres will often purely apply the market %age growth on top of the previous purchase price. You need to make your own calculations for ‘improvements’ and the value of any special features. As a cross check you can do a engine search for French property values which will throw up how the market has moved in the various regions of France.
A bientot, Bruce.
August 14th, 2007 at 6:47 pm
Congratulations on your new home. It looks like a beauty!
We understand how tedious and frustrating the home search can become.
Duane
August 17th, 2007 at 7:05 pm
That looks wonderful. Mu husband and I are currently perusing the internet for some great property. What will you do with this one, live in it or another b & b?
August 20th, 2007 at 10:47 am
Hi Carla,
We are doing both - living and offering rental accommodation.
See our website www.maisonchaudenay.com.
A Bientot, Bruce.
March 25th, 2009 at 1:01 am
Hi Bruce,
Lots of really useful info on your site, I wish I’d found it sooner!
Matt