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Learn To Love Your Agent Immo!
By Peter-Danton de Rouffignac
May 2007

Introduction
Part of the process of buying a property in France almost always involves dealing with a local French agent immobilier. For some this can be a novel or occasionally frustrating business and in this Fact Sheet I have tried to highlight some of the advantages and defects in the French property buying system, and why sometimes things happen which seem inexplicable at the time but for which there is often a rational explanation. Before going any further, I have to confess an interest here: I work daily with selected estate agents within my local area (Roussillon) in my role as consultant helping mainly British and Irish buyers find and acquire property on this part of the Mediterranean coast. My remarks are therefore based entirely on personal experience over the last four years. 

The French agent immobilier
There are over 15,000 estate agencies operating in France, whose services include property sales and letting, managing property for co-propriétaires and providing specialised services such as valuations, investments and commercial transactions (sale of businesses as going concerns and/or commercial premises). They operate either through 13,200 independent firms (88 per cent of the total number of agencies, 70 per cent of annual transactions) or some 1,800 branches of large national firms, who make up the remaining 12 per cent.

These latter agencies, which largely operate through franchised branches, each have between 300 and 800 local outlets. They include Guy Hoquet, LaForet, Orpi and Century21.

The principal professional overseeing bodies are FNAIM and SNPI whose services to their members include liability insurance, bank guarantees (for accepting client deposits up to a specified sum), helping create local groupings of agents, joint research, education and training. They also police the activities of their members.

Not everyone you encounter in an estate agent's office is a fully fledged agent immo.

Strictly speaking, to become an agent immobilier requires certain qualifications (such as a degree in law), relevant training and experience - plus an annual licence (carte professionnelle) issued by the préfecture (loi Hoguet, 20 July 1972)... Staff working in agencies may have the statue of agent commercial and may be salaried or work on commission only, or a mixture of the two. Independent firms may have been established in the area for thirty or forty years, and can offer valuable local knowledge and experience which more recent arrivals may lack.

Agencies are subject to periodic - often unannounced -police inspections, for example to check that they have a correct formal mandat (instruction) from the owner for each property they are offering for sale.

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How the agent immobilier operates 
There are several different ways to buy property in France, including private sales between individuals (particulier à particulier) which are featured in local newspapers and specialist property publications; through a notaire who may be acting for an owner, perhaps following a bereavement where the successors wish to sell; and through an agent immobilier. 

You can of course use the services of various intermediaries for these transactions, including British based agents who have contacts in France; or home-based and French-based consultants. But it is the agency which holds the mandat of the vendor, that is, his/her authorisation to promote and sell the property. The mandat will specify the sale price of the property, the percentage and amount of the agent's commission, and the amount the vendor will receive after deduction of the agent's commission (known as the prix net vendeur). The property is then advertised at the sale price stated in the mandat. No agent can suddenly decide to offer the property at a higher price than stated in the mandat, because he encounters someone he thinks is a gullible foreign buyer! This is a fairly common myth which needs to be countered.

The mandat can be either exclusive, or alternatively the vendor may decide to instruct a number of agencies, and also reserve the right to conclude a private deal. However if the vendor tries to conclude a private sale with a client introduced by the agency, under law the agent can sue for his commission (as he has fulfilled his part of the contract with the vendor to find and present a willing buyer of his property). This is why when being shown a property by an agent you may be asked to sign a bon de visite which shows that you were introduced by the agent.

Certainly in my area, some vendors are in the habit of signing mandats with more than one agency, in the hope of a faster sale or a better price. This means that the same property can be featured in several estate agent's shop windows or in advertising, sometimes at different prices. This is because agents can broadly set their own rates of commission, which may vary from one agency to another. 

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Another potentially frustrating consequence of multiple mandats is that, in the competition to sell, some agents may not immediately inform their colleagues when a property is sold or under offer through another agent. They may indeed not even know which other agents have a mandat and of course the vendor may have also reserved the right to sell privately and bypass all the agents if he receives a good offer through his own efforts. This can be frustrating for potential buyers who may be taken to see the same property by different agents; and when you make an offer, it can sometimes be difficult for your agent to find out if the property has actually been sold or not. Vendors can be elusive when you need to contact them urgently, and in one recent (and fortunately rare) case involving a married couple in the throes of a divorce and unable to agree, he said Yes, she said No (or vice versa), until in frustration my clients pulled out of the deal and bought something else. 

Buyers can sometimes not understand why a property they liked and were told had been sold can sometimes reappear on the market at a later date. This can be yet another consequence of multiple mandats described above, or simply that potential buyers change their mind - maybe they cannot raise the necessary finance or they take advantage of the seven-day cooling-off period and pull out of the deal. So the property comes back onto the market. So don't rush to blame your agent immobilier, it may not be his fault. 

We are not all angels
Some agents (and indeed intermediaries) may work harder than others, for example in letting you know that a particular property has come back onto the market. However, the property business is, or has been until recently, something of a seller's market following the switch to the euro which sparked a mini-boom in French property sales. In my area, this has now slowed down - by about 30 per cent in 2004 - partly due to inflated prices (also up by 30 per cent). My fastest sale took 20 minutes, but now it can take several days and several return visits by buyers before some transactions are completed. Agents are generally having to work harder. 

This does not mean however they will, with alacrity or at all, respond to your phone and fax requests for information. In some sectors the market is still fast moving - the right property (location, price) will not remain on agent's books for very long and by the time you have seen it on the internet, thought about it, booked your low-cost flight and arrived to view, it may well have been sold. I advise clients that the only solution is to arrive on spec, see what's available at the time and be prepared to commit if they see a property they like. This means having available funds or a loan agreed in principle. I have shown properties in the morning only for them to have been withdrawn the same day, due to a sale to another customer. There is often little point in taking endless videos or photographs to show the folks back home while you take a leisurely decision to buy or not. This may sound harsh and often people do not believe me until they arrive and witness the process for themselves. 

So it is not surprising that some agents may not rush to reply to someone calling from England with limited French who "may nor may not be coming to the area, perhaps some time next month, but would like an idea of typical prices of everything from a small cottage to a gite complex with pool"! Understandably, it is easier for agents to sell to the French - they can visit the area more easily, they may have local family connections, there are no language problems and they understand how the system works. That is how many agents feel. The British also have a reputation for what one agent described as 'property tourism' - a few days in the sun, taken on a tour of interesting villages, and no real intention of buying. Some consultants help people if they are new to the area to first do some local research on their own, and provide them with maps and guidebooks to help them find their way round. But don't expect your friendly local estate agent to do the same. 

Mutual trust and confidence
The French property buying process is rigorously controlled by law for the protection of both buyer and seller. This includes the role of the notaire in supervising the transaction, and such elements are the seven-day cooling-off period allowed to buyers (not however to sellers). I will conclude with a few issues that seem to recur when I am working with non-French buyers. 

Agent's fees
Agent's; fees are not fixed either by law or the relevant member bodies (FNAIM, SNPI) and can vary from 5 to 20 per of the sale price. However, as a guide they are usually around 8 to 10 per cent for transactions under €50,000 to around 8 per cent for transactions between €700,000 and 1 million. In some areas of France, the custom is that they are paid by the vendor (as in Roussillon where I work), in others by the buyer (in addition to the fees of the notaire). The collection of the 10 per cent deposit by an agent does not secure his fees: these are only paid over at or after signature of the final contract (acte authentique) in the notaire's office. Buyers may be surprised to learn that a lot of the agent's work occurs after the sale and involves assembling and preparing the comprehensive dossier which is required to complete the sale contract. 

Notaire's fees
These are fixed and operate as scale charges, averaging about 7 per cent and reducing with higher value properties. As my local notaires are at pains to point out, around 70 per cent of their charges go to the government (land registration charges etc) or in disbursements (expert surveys etc). The notaire may slightly overestimate his fees and virtually all my clients have received a refund of two or three hundred euros when they got their copy of the property deeds several months after completion (along with the notaire's fully itemised invoice). 

Deposits
Not all agents are authorised to take deposits and you may be asked to pay the initial 10 per cent direct to the notaire. This is quite normal. Some agents elect not to pay insurers for liability cover which then allows them to receive deposits; and those that do should have a notice displayed in their offices showing the guarantee cover they carry which authorises their taking of deposits up to this maximum amount. The notaire will inform you when he requires the balance of 90 per cent to be transferred, a few days before completion. 

Illegal transactions
Very occasionally a vendor may propose that the buyer pays part of the purchase price in cash, in return for a reduction. This is usually done in order to save the vendor some tax (for example if the property is not his main home), and is of course illegal. There is absolutely no advantage to the buyer (there are plenty of other properties to choose from) and there are no protections or safeguards in law. Both parties may face criminal charges and the buyer of course ends up with a property that is under-valued, creating problems when you come to re-sell. When attending the completion in the notaire's office, the notaire will invariably ask both parties "is this the true price... nothing under the table" and of course you would have to lie. My advice is, if you are offered such a deal, walk away. 

In conclusion
Although the French property buying process is different; it is carefully designed to protect both parties. It is not essential to have everything checked by an English lawyer, unless he is expert in French law and you need advice about matters such as divorce or succession. Most sales contracts are standard, using FNAIM or SNPI models; and the French agent or the notaire will explain any points you do not understand. I have found notaires helpful and forthcoming with advice, for example in the case of complex purchase arrangements (such as couples, non-married partners or a group of friends). The notaire's role is to ensure that every transaction is legal, transparent and equitable, and both vendors and purchases can rightfully have confidence in his professionalism, and that of your agent immobilier.

The author Peter-Danton de Rouffignac MA LLM is an Englishman of French Huguenot descent, who now lives and works in southern France and specialises in helping non-French buyers locate and buy property. Further information is on his website www.francemediterraneanproperty.com

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