III. BUYING AN APARTMENT IN PARIS: ALL ABOUT AGENTS, SEARCH AGENTS, NOTAIRES AND AVOCATS
When starting your search for apartments for sale in Paris, you will meet the following important professionals:
AGENTS ET AGENCES (REAL ESTATE AGENTS AND AGENCIES):
A real estate agent is the same as anywhere else in the world. They represent either the buyer or the seller, and they are paid on commission. Important: In Paris, there is no such thing as a multiple listing service, so you’ll rely on agents to show you what they have to offer or call you if they receive a hot new listing. As anywhere, they come in all shapes and flavors; some are good, and many are not.
Importantly, you need them more than they need you. Great Paris apartments are difficult to find and they are snapped up within hours. If they have a regular clientele, or another potential buyer who stays in contact with them, those clients will get the first calls. It’s the squeaky wheel rule. If you’re constantly in touch with agents, they are bound to remember you. Don’t expect to meet them once and have them call you.
A Few Tips When You Visit Agencies:
Be Specific: Have a good idea of what you want in terms of size and budget. Be specific in terms of elevator, old or modern building, views, and so on. If you walk in and expect an agent to teach you about the local market or simply present you with everything, think again. Lots of people walk into agencies to learn about an investment in Paris real estate and agents have learned to filter them out. They’ll view you as a window shopper, be polite, but never call you back.
Size: These are what you will generally find. Studio: An average studio ranges between 15 m2 and 35m2 (160 to 375 sq. ft.) One bedroom: An average one-bedroom apartment ranges between 47m2 and 60m2 (500 to 650 sq. ft.) Two bedrooms: Between 602 at a small size to an average 120 m2 (650 to 1290 sq. ft.) Three bedrooms: Between 80m2 (860 sq. ft.) and more.
Dress: You are evaluated in terms of buying potential the moment you walk in the door, and first impressions count. Dress your best so that you look like you can afford a nice property.
Price: When they ask you what price you want to pay, don’t be clever. Say, “le prix de marché” (the market price) and leave it at that. There is no point in trying to negotiate a bargain before you’ve found the apartment of your dreams. And, if you indicate a price well below the market, they won’t take you seriously. There is always time to bargain once you’ve seen an apartment you love, but if they think you’re a cheapskate or completely unrealistic, they won’t get back in touch with you.
The Assigned Agent: You’ll probably be assigned to the most junior person because they don’t know you and you don’t speak French fluently. This isn’t all bad, because the junior person may have more time and fewer clients, so can call more often. However, they usually have no ability to filter their offers, so expect to get a lot of calls or emails showing ugly apartments. You need to invest the time to help them understand what you’re looking for and to show you’re serious. Call or email them every month to let them know you’re still looking.
You’ll quickly find that unless you live in Paris full time, it’s not easy to find the apartment of your dreams. The reasons are obvious: you may not know the neighborhoods or even your favorite neighborhood well enough to be able to say “yes” to one street and “no” to another. You have limited time, and you can’t cover all the agencies in Paris to find the ideal apartment for you.
You may be lucky and find the ideal apartment, in the right neighborhood, at the right price the first day you start to look, but it’s rare. Most great apartments either don’t make it to an official listing or are sold within hours of being listed. You understand the difficulty, because the realtors call those clients who are at the top of their mental lists.
Serious buyers are increasingly using search agents to help them find an apartment to buy. Search agents charge between 1.5 and 3% of the sale price of the apartment, separate from the agency’s commission. In our experience, they can be of excellent value. If they are good negotiators, you can cover their fee in the savings alone.
Some search agents can also take on the remodeling – more on that later.
A notaire is not the same as a notary public in the United States. A notaire is a highly respected independent official who handles the sale. Simply put, the notaire does the property and title searches for you and they collect the taxes on behalf of the French government. They must ensure that the property documents are in order; that the buyers and sellers are who they say they are; that the terms are met; and, that the apartment is the size, in the exact location, on the stated floor as advertised, with no liens or encumbrances. They receive your payments and transfer them to the seller at the appropriate moment.
While the buyer and seller can share the same notaire, we strongly recommend that you choose your own. It doesn’t cost more because they split the fee, but the benefits can be invaluable. While they are technically neutral, there are many ways to represent your interests over the sellers. We always use our own notaire and his ability to uncover problems and propose favorable solutions have been invaluable.
Examples of Issues Uncovered During the Buying Process:
One of the most common problems that a good notaire will point out is the variation in the official apartment sizes. The advertised size is sometimes less than the loi carrez (legal size) due to closets, balconies, lofts, and especially any area in the apartment that is lower than the minimum-required ceiling height (such as under a slanted roofs). Since real estate negotiations start at the price per square meter, based on loi carrez, you’ll want to know if the apartment is less than that. This doesn’t mean that the price should be lower if the apartment has fewer square meters than stated, because some features like a soaring loft or balcony are extremely valuable… but you want to be sure the seller or agent isn’t trying to pull one over on you. Important to note: We have often paid the original price negotiated even if the loi carrez is less, because we know that certain features such as lofts or balconies increase the living space and are worth more. But you need a notaire to point out these things so you can make sure of what you’re paying for.
Other issues we’ve run into are:
- Asbestos in a cave (basement storage room): This is easy to remove but allowed us to negotiate a reduction.
- Termites (not surprising in hundred-year-old buildings): This is as treatable as anywhere else and paid for by the building owners. But this allows wiggle room on price, especially if the seller is in a rush.
- Reserves for water damage and important misstatements regarding building works: In one case, we were told that an elevator had been voted on; the estimates and vendor chosen; and a payment reserve set aside by the building owners. This was all true. However, our notaire read the fine print in the assemblée general (annual homeowners’ association meeting) notes to discover that installing the elevator was contingent on a particular owner selling his basement storage room that would be located at the bottom of the elevator shaft. This owner was angry with the building for a slight that occurred decades before, and he refused to sell it. The owner could not be forced to sell it, which meant the elevator could not be installed. After much research, we determined that the owner of the storage room would eventually sell it for a higher price, but it allowed us to re-negotiate a large reduction in the selling price of the apartment.
You’ll need to study the best options in terms of holding entity for your apartment, whether in your own name or in the name of a French real estate company. We recommend you consult with a tax lawyer who is experienced in setting up trusts for apartments. Most people choose an SCI or SARL, but it depends on a variety of factors. Your lawyer can also help you with your tax filing if you rent out your apartment or can recommend an accountant with this experience. We can recommend several good tax accounts and attorneys in Paris for tax planning and for structuring your purchase.
We are unwavering in our standards to find and purchase only the best. That means the best neighborhoods, best apartments, best features and best views.
A quick summary: the first stage of a purchase is making your offer and having it accepted. You then sign a preliminary purchase contract and pay a deposit of 5% to 10% of the purchase price. Documents are checked and verified. The final closing usually occurs three-six months later.
Buy in the best neighborhood you can afford because the cost of remodeling is the same no matter what price you’ve paid per square meter for the apartment. Spend hours, days and weeks searching for your ideal neighborhood.