More than 50% of properties are bought through estate agencies.

ESTATE AGENCIES

The agent immobilier is rather more respected in France than the UK. This may be partly because the profession is highly regulated. Before he can set up in business, he must have:

• Standards of qualification, competence and experience.
• A professional permit to cover all property transactions. The permit has to be revalidated annually by the local préfecture de police.
• Professional indemnity insurance.
• Bank guarantees that cover him for all money he holds on behalf of clients. It is illegal for him to hold any money if the guarantee is for less than €85,000.
• Up to date knowledge of the true cost of transactions and market values. He is required by law to give this information and to give it honestly.
• Power of attorney (mandat de vente) before he can negotiate any sale on behalf of the vendor. The mandat has to be renewed after three months. He cannot purchase any property himself for which he holds a mandat for sale.
• Specified rates of commission written into the power of attorney and prominently displayed in his office.



PAYMENTS TO AGENTS


Traditionally, in France the purchaser, rather than the vendor, who has to pay the agent’s commission.

But this is no longer universally so. Agents in some regions have now adopted the more common EU practice of charging the vendor.

It makes little difference in the end. The commission is usually hidden in the purchase price if the vendor pays it, or a property may seem unusually cheap if commission is to be added. Commission rates were fixed by law until 1987 but agents now charge whatever they think the market can stand. In practice they usually ask 5% (plus TVA at 18.6%) but the rate can be higher for up-market properties. Sometimes a sliding scale is used. In either event the agent must display his scale of charges.

No commission is payable until the sale is legally finalised by the writing and recording of the deed.

The Uk Estate Agent

An increasingly large number of UK estate agents are represented in France. Most commonly these are ‘piggyback’ operations where the UK agency is adjoined to a French agency. Some agencies, however, have associations with French agents as well as their own regional offices.

But a few agencies do things differently. They attract custom at UK-based exhibitions and ‘profile’ new customers before promising to find French property that suits the buyer’s budget and personal preferences. They claim to provide a one-stop service intended to deal with every aspect of the purchase process.

But the process is not always as straightforward and transparent as the publicity suggests. Included in one ‘package’, for instance, is advice on ‘rights of way’, ‘land divisions’, ‘making a will’, etc. The same agency even talk about ‘popping in for a cup of tea to see how you are getting along after the purchase’. They also encourage the view that a successful gîte or bed and breakfast business can be up and running within a few weeks and that continued support and assistance will be available to help make this possible.

Prospective purchasers should be careful about these claims. On occasion, buyers have been brusquely informed, following the purchase, that continued agency expertise, or a referral to an appropriate professional, is indeed available – at €100 an hour. And, although their fee is ‘all inclusive’ (including legal work and taxes) ‘one-stop services’ do not come cheaply. One agent’s scale of charges in 2002 ran from a minimum of €550. For the purchase of a €30,000 property in the Charente, in the same year, the agent’s bill was €880. In effect, the purchaser paid twice the normal cost of the transaction process.

The buyer must decide for himself whether this kind of ‘bells and frills’ package is worth the premium rates charged. Judging by the dissatisfaction of some customers it is certainly worth checking the small print. Communication throughout an English solicitor may be an advantage, but this assumes that French estate agents and lawyers are poor communicators. They are not.

It is also worth noting that matters such as ‘rights of way’ and ‘land divisions’, etc. are routinely checked by the lawyer handling the legal work, and that some other elements of the package – such as ‘drawing up a will’ – can be done separately and relatively inexpensively. It is also worth asking if it is realistic to turn a property – which could require some renovation – into a successful business within a few weeks.

And, if communication remains an issue, there is an excellent network of UK agents offering the same services at the same scale of charges as their French colleagues. www.real-estate-european-union.com has definitive listings. You will also find valuable advice delivered with the voice of integrity and experience at www.findaproperty.co.uk and www.hamptons-int.com