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French house prices fall


Llantony
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Interesting reading and we all know the BBC gets it wrong (there have been a few threads on here about France and the BBC getting it wrong as I remember). With only 20 official complaints according to the BBC it would seem that most people really are happy. Some comments in the report were just plain silly but then that’s another story and another thread if somebody wants to start it.

Linking it back to France where an English surveyors report is worthless if you then believed everything in this report people would never get a survey done here but I know of at least one surveyor who charges loads of money doing surveys here in France and he is always working. I’m not saying it’s right but it does make you wonder [:)] .

Picking up one of those free property mags for round here (Aude) there is a lot of stuff for sale with anything half way decent being around the 300k mark, go down to the coast and add another 100k and we are talking about a 3 bedroomed detached house with a couple of hundred square metres of garden. It would seem by what others have posted here that even in France there is a north south divide.

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I'm losing the will to live on this one!

I still don't see why I've been told by 2 sellers that their house would be cheaper if we did not go via the agent.  Yes, we'd be happy, but the buyer would get less!  As we'd pay the commission on top of the asking price

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[quote user="Llantony"]

I'm losing the will to live on this one!

I still don't see why I've been told by 2 sellers that their house would be cheaper if we did not go via the agent.  Yes, we'd be happy, but the buyer would get less!  As we'd pay the commission on top of the asking price

[/quote]

NOOOOOOooooo  Not if the advertised price at the agency includes their fees which is probably the case else the seller would not have suggested that you buy direct. You seem to think that all agencies add fees on to the advertised price most now do not and I suspect this to be true in your 2 sellers cases.

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[quote user="Quillan"]You seem to think that all agencies add fees on to the advertised price most now do not and I suspect this to be true in your 2 sellers cases.[/quote]

Yes, the way it would work out cheaper for the buyer, without the seller losing out, is if you use the 'FAI' (frais agence inclus - agency fees included) price from the agencies as the base for comparison. As to whether or not agencies add fees on to or include them in the advertised price, it may be a regional thing. To go over it yet again, by far the most common practice nowadays seems to be for agencies to quote a price that includes their own fee but not the legal fees and taxes. A few agencies probably still advertise prices with no fees included (i.e. net vendeur - what the seller gets) and some, including many targeting English buyers, quote an 'all-inclusive' price - the idea being that the buyer gets 'no nasty surprises', but a lot of buyers are surprised at other fees which have been added on, and that you would not have had to pay under other arrangements. Notaires used to normally advertise houses for sale at the 'net vendeur' price, but it seems to be a growing practice to include their own 'negotiating fee' (like the agency commision) in the advertised price. It is useful to know the 'net vendeur' figure, because this is the figure used for calculating taxes etc.

So, if you are comparing the net vendeur price, then I do not see how the house would be cheaper for the buyer and the same for the seller by not using the agent. If it is the FAI price then yes, that will apply. But beware - as I pointed out in a previous example, if the seller gets more out of the deal, the buyer could end up paying more in notaire fees and taxes, so will not get the full benefit.

This whole question about fees, and who pays, comes up so frequently and causes so much confusion that somebody should write a book about it, in words of one syllable.[:D]

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[quote user="Llantony"]

I'm losing the will to live on this one!

I still don't see why I've been told by 2 sellers that their house would be cheaper if we did not go via the agent.  Yes, we'd be happy, but the buyer would get less!  As we'd pay the commission on top of the asking price

[/quote]

 

I think everyone is losing the will to live on this one :)

How much simpler can it be? if your not paying agancy fees then it must be cheaper!!!!!!!!

 

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[quote user="powerdesal"]I've only ever had two full surveys done, one on a house I bought, one on a house I didn't buy as a result of the survey. Unfortunately the surveyor of the house I bought must have been having a bad day, how can a surveyor state, in writing, that a wall is a solid brick wall when even I (subsequently) could actually see into the cavity at the side of a door jamb. It did somewhat destroy my faith in structural surveyors for a while.
As with most of us perhaps, I did not have a survey done for the French house.....why??, when in Rome I suppose!!!!!!
[/quote]

we too paid for a "full" survey on a UK house, and when the report came back we asked for someone to acually go in the house!  the report said that the stopcock could not be located in the kitchen area due to the furnishings(I presumed he meant the kitchen units) The house we wanted to buy was emply except for a fitted kitchen and bathroom fittings, the stopcock which I has spotted as soon as I came back into the house from viewing the gareden was in the gap in the worksurfaces where a washing machine would eventually sit! AND, that he hadn`t been able to check the  roof or loft insulation as he was unable to access the area as there wasn`t a trap door............this was visible to anyone who had even bothered to go up the stairs and look up!  Oh and 2 years later when we sold we had to have the wall ties done, do they realy disintegrate so quick?

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No need to be rude.

As I clearly said, obviously the house would be cheaper for me as I wouldn't pay the agent's commission BUT the sellers would lose money if they gave me a cheaper price than the one the agent advertised (which does not include their commission).  So - as I asked in my original posting that started this thread about house prices (not surveys etc.) what's in it for the seller?

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[quote user="Llantony"]

No need to be rude.

As I clearly said, obviously the house would be cheaper for me as I wouldn't pay the agent's commission BUT the sellers would lose money if they gave me a cheaper price than the one the agent advertised (which does not include their commission).  So - as I asked in my original posting that started this thread about house prices (not surveys etc.) what's in it for the seller?

[/quote]

With respect you never mentioned anything about the price quoted not having the agents commision attached which is more the norm. To be honest why ask on the forum, why not ask the seller direct? You can't keep asking the same question implying that the answers are wrong if you don't give all the facts in your question.

Actually to be correct your original posting was about the prices of houses.

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I think it is clear from the various explanatory posts that if the price advertised by the agencies is indeed the net vendeur price then by selling it to you direct for less then the sellers would indeed lose out. So the answer to your question is that there would be no advantage.

I would agree with Quillan, ask the sellers what they have in mind. I suspect that some cash under the table might be involved which, although fairly commonplace, is illegal, and is also undesirable from the buyer's point of view for several good reasons.

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Oh dear!  Cash under the table?  I hope not as one seller is a friend's friend of many years and seems a genuinely nice woman.  She was honest enough to pointed out that the floor in a small extension is on bare earth when we wouldn't have guessed.  The other seller is the father of Greg who is buying the house next door to our present one. So I'll ask next time I see him.
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[quote user="Llantony"]

No need to be rude.

As I clearly said, obviously the house would be cheaper for me as I wouldn't pay the agent's commission BUT the sellers would lose money if they gave me a cheaper price than the one the agent advertised (which does not include their commission).  So - as I asked in my original posting that started this thread about house prices (not surveys etc.) what's in it for the seller?

[/quote]

Llantony, from your comment about the seller getting less you must be the only person that offers the full asking price at the outset.

If a property is advertised for, say, 200,000 euros would you offer this at the outset? 99.9% of people would not, they would make an offer, which would mean that the agent would go back to the seller and the seller would consider lowering their price or some form of negotiation would go on and, in most cases, an agreement made to pay less than the original asking price.

What might be in it for the seller is if he says 'I'll let you have it less what would have been the agency fee, say 185,000. If you agreed to this he would have made - because this would have been his original figure that, in the example above he would have lowered to meet your offer, i.e.

Agency

Seller 185,000    Agency 15,000

Offer of 190,000 accepted

Seller 176,000   Agency 14,000

No Agency

Seller 185,000

Offer of 185,000 accepted

Seller 185,000

So this is how the seller can make more money by dealing direct.

Paul

PS Will, on ou abortive attempt to purchase (we signed the Compris, the seller did not) the Notaire stated that his fees and the taxes were calculated on the total price, i.e. sellers part and agents part.

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Paul - I can see where you are coming from though it isn't really comparing like with like - though it may well appeal to a Frenchman's logic.

What you say about the basis for calculating notaire fees, and whether or not agency fees are included in the calculation, is very interesting. There were changes to the fee structure made in May this year, but it is proving difficult to find exactly what they were. The whole thing is very complicated and has so many variables, such as whether or not the property is mortgaged (in some cases it is possible to include agency and notaire fees in the mortgage, in others it is not, and these all affect the actual amount payable). It always used to be possible to set some of the purchase cost aside, quite legally, for fixtures and fittings (e.g. kitchen units and appliances etc) and this would have the effect of reducing notaire fees and taxes - as far as I know, this provision still applies. One would expect agency fees to be treated the same way - they are, after all, part of the purchase, but not part of the structure of the house. But we are getting away from the basic question, and starting something else quite different.

By the way, we have twice offered the asking price for a French house. In each case we felt the house was fairly valued and an unconditional asking price offer has the effect of virtually guaranteeing the purchase - i.e. nobody can gazump you. But that was in a much faster moving market than today's - chances of being outbid are fewer now, but in the case of an apparent bargain price (which still pops up occasionally) it's still something to bear in mind.

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Saturday's Telegramme had an article about the downturn in brits buying property here in Brittany compared to previous years and 800 properties less in 2006 than 2005. There were more re-sales than ever before too,probably folks going back as they have been in their droves recently.The british(82,6% and mostly in dept 22) still buy the majority of property here but lack of cheap renovations now has forced them to spend an average of 104,000€ in 2005 compared to 50,000€  in 2002.
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I've just now joined this Forum and read most of the thread "French house prices fall." My first question is how can one judge? I see advertised asking prices all over the place but is there any sort of  central registry where actual paid prices are recorded and published? I'm a Brit living in the US and here there are any number of websites where I can look up the sale price of every house in my street going back five years or more. In France it seems I can look only at asking prices and while many appear plausible there are a large minority which seem way out of line. How do people reach an opinion on the market, is it anecdotal evidence, gut feeling, newpaper reports, agency press releases?

About agents' commissions. Three months ago we sold our vacation house near Cahors (Dept46) privately but three agents we approached wanted commissions ranging from 6.5% to 10%. Their attitude was don't worry, the buyer pays. Now that we want to buy another house the agents say don't woory about our fees they're all included! Do people really fall for this?

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jupiter

as far as i know there isn't any shortcut to buying a french house if you want value for money.  i spent hundreds of hours researching regions and different types of housing.  i searched agents' sites (french & british) and sites advertising private sales.  i combed specialist publications, british national papers and french local newspapers

i followed up on every property that i thought was, on paper, good value.  i made half a dozen or so visits to the regions that i thought represented the best value

i constructed a matrix and scored the houses that i viewed, giving them ticks in boxes such as walking distance to shops, minimum 2 bathrooms, etc

i visited some 70 houses and now i HAVE bought but i STILL don't know definitely whether i had the best value i could have had.

in the end, it's a matter of comparing carefully like with like and developing an extra (almost sixth) sense about value and also about whether the property is where you can see yourself living happily

i do think there is excellent value in virtually all areas of france but you do have to have bags of patience and to be prepared to spend time, money and effort to secure your bargain! 

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[quote user="sweet 17"]

kathy

you are sooooo right!  most people do not commission surveys.  it seems crazy; here they are making what is, for the vast majority,  the MOST expensive purchase of their lives and they blithely go ahead without proper advice and counsel.  why on earth do they do it?

you are also right to point out the difference between a survey and a valuation.  i would go one step further - there is also a difference between the usual "homebuyer's report" and a survey carried out by a chartered building surveyor or qualified engineer.  admittedly, the homebuyer's report is better than nothing but it IS only on a pro forma and only those elements of the building on the pro forma are looked at.  it is a somewhat restricted inspection and not on a par with a properly-prepared report with detailed comments on the construction and the site

to be fair, a full structural survey is often impractical as it would mean pulling up fitted carpets, looking behind fitted furniture, digging down to foundations to look at them, etc.  needless to say, it's not easy or even necessary to go that far, bearing in mind the property still at this stage belongs to the vendor!  however, if a suitably experienced and qualified building surveyor is engaged s/he can generally suss out problems by close examination of elements s/he is able to see including walls, roof spaces, method of construction and so on.

i do think that we can all be guilty of taking complete leave of our senses when our emotions are engaged.  and i don't think us brits get more emotional than when house transactions are involved! 

[/quote]

For what its worth, even carrying a Building Survey (formally known as a Full Structural) we do not dig up foundations and pull up fitted carpet- most vendors would be extremely unhappy about such goings on. A Homebuyer Survey & Valuation Report may only be carried out to a pro forma but it still looks at the same building elements as a Building Survey but just not into the same depth of detail so for instance it may describe the construction of the roof, but would not list out the dimensions of the timber components. None the less the HSV does provide a lot of information and is a very useful tool in deciding whether to go ahead with the purchase.

 

  

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I know it's a bit off topic, but the original subject has now been hammered into oblivion anyway, so here's my question.

Who is most out of step with the rest of the world - the Brits who like a surveyor to check the property before they buy, or the French who do not and rely on what they see with their own eyes?

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Sweet 17 thank you, brilliant message and I admire your sheer hard work. What a monumental undertaking! When I stopped chuckling I realised of course that you're confirming my worst fears. We're all buying in the dark. Information is hard to get. Information of actual  prices paid is probably impossible to get. You put your finger on it when you mentioned  the need  to develop a sixth sense.

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Phil ............

It's a good question and does take us back to reality.

I suspect that for most of us, the combination of buying a property and buying it abroad (with all the real or imagined pitfalls that can be presented) engenders natural caution.  Despite the TV programme 'buy on a holiday weekend' stuff, most people on here are mature and correctly wary.

I wouldn't presume to stipulate a right or a wrong way: All I can say is that we asked an RICS surveyor to look at our place for us before we took the plunge. It wasn't a full structural survey: it was a "Is the place about to fall apart and is there anything so obviously iffy that we should either withdraw over or re-negotiate on?" There wasn't.

Now for me, spending 0.25% of the purchase price on that kind of advice (fully indemnified by his professional insurance), seems like commonsense.  But then it isn't the culture over here.

So, I'm off the fence: there is a right way in my opinion, but each to his own (and this debate has been thrashed over on many occasions).  

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