.
.
| When my landlord said "Sorry, but we
want to sell the apartment," I went into cardiac arrest. After three
years of "schlepping" the groceries up three flights of stairs, I had become
suddenly attached to my spacious Marais 17th century flat with its sunny
southern exposure, its little idiosyncrasies and the friendly "quartier
merchandises." The thought of uprooting was frightening and I knew in my
gut that finding any other space as homey and comfortable as this at a
similar price would be almost impossible. There were sleepless nights.
Buying the apartment immediately became
my number one project. The first questions to arise were: Most importantly,
did I want to own a piece of Paris -- how permanent a resident would
that make me? If so, then is it a good investment? What price is reasonable?
Can I get a loan? Can I afford it? Who can I trust to help me?
Nine months later (equivalent to giving
birth!), I had the answers and I had the apartment. If you are considering
owning a piece of Paris, then possibly what I learned in nine months, you
can learn in these one thousand or so words: |
| "I now have a little piece
of Paris I can call my own and I wouldn't trade it for all the square footage,
king-size beds and walk-in closets I used to think life was all about...
...Stateside, that is." |
|
|
|
|
Owning a piece of Paris doesn't make
you, necessarily, a permanent resident. Many people are purchasing
property in France for the sheer pleasure of renting it and earning money
from their investment. Renting it can be for short-term (by the week) or
long-term (by the month or by the year). There are many agencies and management
firms that can keep your apartment rented and profitable for you. Of course,
like me, you can simply live in it and enjoy it, although I have had very
good experiences renting the apartment while on vacation and making a few
extra bucks to help pay the mortgage.
As it turns out, the Marais, and particularly
my part of it, the 3rd arrondissement, had become one of Paris' wisest
investments. Prices had risen 14.7% over the previous year (first quarter
1999 to first quarter 2000), 5th highest in the city. The highest rise
in prices per square meter was in the 1st with 18.9% and lowest was in
the 18th with 7.3%. Either way you look at it, real estate in Paris was
on the rise with 15 out of 20 districts showing an increase of over 10%.
|
“When good Americans
die, they go to Paris.”
|
|
|
|
|
The most expensive district in first quarter
2000 was the 7th with an average of 28,275FF/m2 (per square meter), followed
by the 6th at 27,858FF/m2 and the least expensive was the 19th at 12,346FF/m2.
My landlord was offering the apartment at a price per meter comparable
with the average. He likely would have offered it at a higher rate to an
outside buyer, to include agency commissions and losses he might incur
should the apartment remain empty while offered for sale. Instead, I was
a ready buyer and we were both in a win-win position.
In France, it is necessary that a "notaire"
record the property deed. The notaire drafted the "promesse de vente" or
"promise to sell" contract allowing two to three months to obtain a loan
plus I provided a deposit of 10% of the purchase price, kept by the notaire
until the completion of the sale. If a loan cannot be obtained and the
sale should "fall through," the deposit is returned. If the sale is completed,
the deposit is deducted from the final sales transaction.
The notaire provides a variety of other
services, too. He collects all the administrative and town planning documents
needed to complete the sale, he checks the seller's financial and mortgage
position, and repays any bank loans and, where relevant, sums due to the
manager ("syndic") of the property, by deducting the proper amounts from
the sale proceeds. The notaire fees, most of which are actually tax assessments,
are added to the cost of the transaction. Be prepared to pay up to 10%
of the purchase price in these fees! |
I sought out a notaire who could speak
English to get me through the "rough spots." I discovered that some notaires
take advantage of foreigners by leading them to believe that their transactions
cost additional fees. This isn't true, so be careful whom you choose. Ask
your friends till you find good references and then interview each of them.
Next was to obtain a loan. I made
an appointment with my personal agent at my bank in Paris and discovered
"tout de suite" that if I didn't have a salary deposited in the bank monthly
that I wouldn't be considered. That was rejection number one. Following,
I made a trip to my hometown in the States and met with my bank, my accountant
and my attorney. My bank immediately said no, they would not lend money
on property outside the US. My accountant crunched the numbers and told
me what kind of loan I could afford. My attorney offered a way I could
take out a business loan and my US business would buy the property. Still,
it was expensive at US interest rates of about 9% and complicated in having
to set up the legal aspects of the deal. I considered it rejection number
two.
Then a close (and wise) friend asked one
simple question: "Have you thought about asking at the British banks?"
No, I hadn't! Turns out, these lending institutions make loans available
to international customers. I visited three banks: Woolwich Bank, Abbey
National and Banque Transatlantic. All have agents who speak English,
of course. Banque Transatlantique was not interested in working with me
as I was not a customer of the bank with a large "portfolio." Both Abbey
National and Woolwich had very creative loan options and were happy to
take my application. I chose to put 20% down on a variable rate mortgage
that maintained the same monthly rate, but varied the term of the loan.
The interest rates at the time were more than 3% lower than the US rates
and more than 1% lower than the French banks' rates. The result was a monthly
mortgage payment almost the same as the rent I had been paying, so in effect,
the apartment purchase was costing me only the down payment!
My loan application was accepted by one
of them and the closing of the sale took place without complications and
to everyone's satisfaction, especially mine. I now have a little piece
of Paris I can call my own and I wouldn't trade it for all the square footage,
king-size beds and walk-in closets I used to think life was all about,
Stateside, that is.
| About the author:
Adrian Leeds is the publisher of the electronically published Insider Paris
Guides http://www.insiderparisguides.com
- the author of the Leeds Good Value Guide to Paris Restaurants - http://www.insiderparisguides.com/restaurants/index.html
- co-coordinator of the Parler Parlor French-English Conversation
Group - http://www.parlerparlor.com
- editor of the Parler Paris Bi-Monthly Newsletter - http://www.parlerparis.com
- and is president of Western Web Works, LLC of Knoxville, Tennessee. She
has lived in Paris seven years with her daughter.
Adrian
Leeds grew up in New Orleans, attended the Fashion Institute of Technology
in New York City, spent a year on a kibbutz in Israel before settling into
a career and family life, first in Knoxville, then in Los Angeles. In 1994,
she brought with her to Paris more than 25 years experience in marketing
and public relations, first with Levi Strauss & Co., then with television
station promotion, broadcast advertising sales, media purchasing, advertising
agency account management for her own firm as well as others. |
|
.
.
|
Additional Resources:
