Housing transaction costs - France three times higher than UK!

[Crevette]

I found the following chart very interesting ;

http://economist.com/markets/indicators/displaystory.cfm?story_id=9688013

Agent's fees are the highest in France than any country surveyed...

-Rob-

[Llwyncelyn]

Hi Will is the expert on this but you are not with respect comparing apples with apples.  Here the social security charges plus tax skew the figures.  Again here you cannot buy a house without going directly to the Notaire who in reality are Government officials.  Their charges are set as in stone so its not like the UK where most of the details are contained in the District Land Registry files and on line and Solicitors back home charge say £250 plus vat for non contentious conveyancing.  Again in the UK most of our land and property is now registered land with a title number although non-registered land still exists.  Different system here.

Also some house values back home and let us say somewhat high so if you are buying a house around the M25 you could be looking at perhaps ( I do not know) £500000 her values are so much lower?

However I agree that if you are buying here at say 200000 14% on top does make it expensive.

Brussels wants the Notaire market here opened up?  What chance when one is called Maitre?

 

[Patf]

And even the female notaires are called Maitre.

[Llwyncelyn]

I knew that and our Maitre is female and also is not married and uses a hyphenated name.  Very scary.

[jc]

Female doctors in France until recently had to be called LE Medecin;they are now able to be referred to as LA Medecin.

[Jonzjob]

I may be totally wrong, but although the notaire's fees are set in stone you can barter with the immos. They still charge an arm and a leg, but at least you can make the arm/leg a bit smaller. If they won't barter then go elsewhere and tell them that you will too!!

We are lucky here because the notaire in Carcassonne got together and formed their own immobilier. They give the notair rate for the immo service and as one of the immos is an English lady, well!!! Apparently there are about 4 other towns in France that have the same setup?

[Ian]

Immo rates are potentially negotiable (like many things) - I have negotiated a price for me that stays fixed with an entirely variable fee for my immo.  Whatever he sells it for above my price he keeps - and if I agree a price with one of his buyers at (or below) my price he earns nothing. (If I find a buyer -  he of course earns nothing either)

Of course you can only negotiate if you are talking to the boss - we had a couple of sales reps from one of the larger immo firms come out to see us and understandably their boss gives them no leeway to negotiate-  though they hinted that to actually close the deal once we have a buyer dangling on the bait - they might shave a bit off their fee.

[Will]

Most 'sales reps' for French agences are self-employed, on commission only, so if they cut the agency fees their own cut drops drastically. A salaried negotiateur (or negotiatrice, like Mrs Will) is more likely to do a deal, as will the agency's principal. I can't really imagine an agent selling for no commission at all because the seller accepts a low price.

There are always digs at the size of French agency fees, and unfavourable comparisons with the 0.5% upwards that you can get in England. Although on the outside there doesn't seem to be much difference between selling a house in England and one in France (apart from the lower prices, which few seem to complain about - until they are the vendors of course), the two systems are not really comparable, and neither are the costs involved in running a business in France compared with England. I had a friend in England (now retired) with an estate agency business who made most of his money through running a branch of a building society rather than through selling houses - there are few such alternatives available to French agents.

House sales are a highly competitive business, and if any agency was able to charge significantly lower fees they would clean up the market. For an average house, you will be very unlikely to find anything under 4% agency fee. At the top end of the market, as the scales are percentage based, then there is more possibility of a reduction of course, but even at 7% the agent is making very little (and doing as much, or more work) when selling a pile of rubble in a field.

Don't forget that notaires, whose income does not depend on house sales, charge sales commission too - the government-controlled scale for them is 2.5% to 5%, on which they add 19.6% TVA.

Remember too that - in both France and England - serious buyers effectively subsidise the many time wasters, who take up a lot of the agents' time for nil reward.

[WJT]

Taking away the agent's fees, according to that graph France has the highest registration cost of all the countries! [blink]

[Ian]

Like any other walk of life real estate agents should be free to charge whatever they see fit for their service.  And likewise other people are free to decide whether it is a fair price or not.

One only has to compare the number of French vendors actively trying to sell privately to the number one sees in the UK to get an insight how much "value for money" vendors feel they get in general in both countries. 

That said - outstanding and flexible service from French immos will of course be rewarded by a queue of people wishing to instruct them to sell their house.  

In both countries it is the incumbents themselves who are the architects of their system of work - if they feel disatisfied they should change their working practises. Most agents are doing the best they can - nearly everyone grumbles about their work sometimes and feels they should be better paid!

[Will]

Quite right Ian, particularly that bit about people who work for agencies should be better paid. [:)]

There's a culture difference betwen England and France, in that if you want to find buyers in England you have traditionally instructed an agent, whereas in France, outside the big cities and popular places to live, agencies are a comparatively new phenomenon and rural French sellers have always relied on notaires and private sale ads.