Establishing a sale price

[phylisbide]

We understand from the weekend papers (?) that  house prices are dropping in certain parts of France - we have property in 24 and our friends wish to sell their share of the house we purchased together. In order to establish a realistic price,  should we put the house on the open market? Will we incur immobilier fees if we then decide to buy our friends' share? We are trying to be fair to both parties involved. Any thoughts would help us decide what to do for the best.  Thanks, Phylis.

[Val_2]

I would have thought that the more parties that get involved, the more its going to cost both of the vending parties? Why not just get a local notaire to value the property and then if acceptable to both sides, buy your friend's out thus saving a lot of money not getting agents involved who do charge a large fee and will hardly be doing anything for that money. Thats looking at it from an outsider's point of view.

[Will]

Val's suggestion is a good one I think. As far as the market is concerned, it is flat, i.e. static, rather than dropping. What is happening is that the many over-valued houses are not selling, or the vendors are having to accept offers. Make sure you get a valuation to sell, rather than just adding on 20% per year, as many sellers are doing - and a lot seem to be adding 20% on to the renovation costs too, so you end up with a really stupid asking price.

A notaire or agent immobilier may make a charge for a valuation if they know the house is not going to be put on the market, but it should not be a lot. They may be reluctant to take on more houses for sale, as many have a very large number of unsold houses on their books already.

[Gastines]

Having been in a similar situation with a relative,who got cold feet after the purchase of a property,it might also be worth remembering that as your friends want out and  the property market is slow at the moment, they should realise that if they want their cash out , it may well have to be a figure in your favour. Otherwise you could find yourself on a loser.

Very difficult situation with friends or family, as one lot seems to do most of the work,physical and mental, while the other may be only interested in the glory.Speaking from personal experience I'm afraid.

Trust all works out well.

Regards. By.St.Malo.

[Teamedup]

Also all the same notaires fees will be involved as with the original sale too. Which as your friends wish to sell, should perhaps be coughing up for too.

 

[phylisbide]

Thanks for the postings - had'nt really computed that the Notaire costs - and of course the charge to re-do the termite and lead checks - aught to be borne by the party who wishes to sell up - who knows what the price should be - we just wondered if putting it on the market - just to test the water really - might help to focus in on a final figure. Very boring....just want to be there really, not talking about it....thanks though

[daniel]

Notaires usually charge valuation as do immobilier agents when you tell

them your not going to sell.  You (buyer) will have to pay for the

"frais de notaire" unless the seller agree to share the cost. I'm not

sure you have to re-do the termite/asbestos/lead survey in this case.

[andyh4]

[quote user="daniel"]Notaires usually charge valuation as do immobilier agents when you tell them your not going to sell.  You (buyer) will have to pay for the "frais de notaire" unless the seller agree to share the cost. I'm not sure you have to re-do the termite/asbestos/lead survey in this case.
[/quote]

 

But they are going to sell.  Assuming the original purchase was in both sets of names the notaire will need to be involved in a change of ownership for the 50% - unless of course they are buying out a share of an SCI.

[Teamedup]

Exactly, these people are going to sell and the poster is going to have all these costs charged to them if not careful about they go about this.

 

[daniel]

Yes, assuming this in an 'indivision" and not a SCI, this should be

like selling. However, when I got divorced I broke the indivision with

my ex-wife who bought my part of the house. We didn't have to do the

termite/asbestos/lead trilogy. But maybe it was because the house was

recent (1980ish).

[HoneySuckleDreams]

Did any of this get sorted out?  We're having the same problem with agreeing sale price.  The other people have heard that the house prices are going through the roof.  We've been told 8% for the next year.  They want to get the house valued now, so they know how much money they roughly have (no problem there), so that they can go and find another property around here (no problem with that either). But then they want it valued again in 12 months and not sell it to us for another 6 after that!  We suggested that we get 2 valuations, a 3rd if they differ by more than 20%, average it all out and give them an extra 5% for good luck... considering we're finding the 8% notaires fees we think this is fair.  Unfortunately they don't, apparently we're trying to rip them off.  Does anyone out there think we are being unrealistic?  We think this is fair to both parties.  Considering that they will be finding a property at this year/last year prices and then realise the price in the current property at "next" years prices, we think that this is morally wrong.

[Just Katie]

It is of course more difficult to value houses in France than UK due to their 'uniqueness' to each other.  If you were to value a three bed semi on a wimpey estate a valuer in UK would simply make enquiries with estate agents to ascertain similar properties recently sold.  However, I appreciate that in addition to many houses being 'identical' in UK there is also the added bonus for valuers that the market moves more quickly and therefore it is easy to obtain recent comparable evidence.  However, would it be possible for you to use the same techniques in France perhaps by word and mouth find out what sold where and for what price.  If the market in France has stagnated for some time this should make your quest easier as the date when sold will be less significant.

 

[Teamedup]

Crazyfrog, I think that the three valuations is a good idea as long as it is all like for like and one of the valuers hasn't included their fees etc etc. If you are paying the notaires fees make sure that they know how much that will be too.

 

Write all the fees and prices down and then let them see it all. Tell them that you want half the notaires fees paying if they are going to make you wait 18 months, see how they like that.

[Anton Redman]

This time last year we looked around 24. Spent time in Riberac and close to Sarlat. Twice were told of course we could not spent this amount of time with you in high season. This despite being able to prove we were cash buyers. 10 out of 12 houses we viewed are still for sale 12 months latter.

The classic was of resolving failed joint ventures in the UK is party A says to party B you can buy our 50% of it for X otherwise a Y months latter B has  to buy A's 50 % for X. Mexican stand off

I thought you could check the land registry in France to see what houses had really sold for so might be worth selecting five houses forsale and agreeing price was the average of those sold 

[phylisbide]

Thanks for all your postings. This is in the middle of resolution - hopefully by the end of the month completed. The Notaire's costs will (we hope) be shared between us - after all it is not us who wish to sell up - and the three agence immobilier figures were so wildly different I called in a fourth to see if we could establish a sensible average. The agences involved have recently been contacted by mail by our friends to check the up to date situation, and the price agreed - less 10% because it's an easier 'out' for them - has been finalised. This has been over a year of our friends changing their minds on whether to sell or not - happy to see it sorted out. Now have no cash left - but peace of mind prevails chez nous. New papers signed to ensure OH has rights of use until his demise, then reverting to the kids as per normal without major tax burdens - sorted. Spent a happy week there last week - all worth it.

[HoneySuckleDreams]

Phylisbide: I'm glad you've managed to get things sorted (over a year WOW).  I don't think we will be so lucky.  We are actually living in France now (with kids in school) so it's not just a holiday home for us.  Before we left the UK we all signed an agreement with clauses that dealt with the issues of what would happen if 1 couple wanted to sell (average of 3 valuations with 6 months for the other couple to decide and complete) or if there are issues with the way the "partnership" is going.  We've just had another meeting with the other couple and they don't want to use the agreement as a vehicle to sell, they are going to come up with a price which will be based on a) their valuation of the property, b) compensation for them having to sell earlier than expected i.e. a perception of what the house would be worth in 12-18 months time and c) recouperation of all shared maintenance costs they have spent on the house so far.  If we don't agree with their "fair" price, then they want to revert back to the agreement which deals with grievances, to force us to sell what is now our home. (oh.. and we pick up all the Notaires costs).  We have no opportunity to negotiate or have an input into the price they will ask us to pay.  Compare this to what you have negotiated and I think we are being taken for a ride....

We don't think this is fair.  Has anyone else been through this?  Is there a legal way we can progress this?  Does anyone know of a French Lawyer who deals with this, or is it a Notaire's job.  Is it English law or French law?  Any advice would be helpful.

 

 

[Teamedup]

Crazyfrog, in french terms that is exactly what you are doing. You are selling the jointly owned home.......... and then you are buying it.

 

Can't you just go along with this and then you buy it. They have no more of a leg to stand on than you do. If your agreement mentions all these things within six months etc, surely that has has much validity as them 'telling' you that they just want to sell.

 

Also was it agreed in the first place that you move in permanently? I don't know whether I have misunderstood your post, but got the impression that you had all bought as just a holiday home. I only ask this as if this was never part of the deal then it sort of changes the way I would see this and probably the way they see it too.

[phylisbide]

Crazyfrog - if this was originally a holiday home arrangements and you had no agreement as to what would happen if one party decided to permanently relocate, then I think the goalposts have moved. I hope you can sort this out.

A salutary point to be aware of  - often I commissioned work we all agreed needed doing on the house as I was there more regularly - so many of our joint bills were in my name only - the other party have had to go to all of the artisans (scattered all around the area) for bills to be changed to both names in order to satisfy the notaire that the bills are usable for Plus Value (CGT). And one of the bigger invoices paid had not been stamped as such by the builder and did not count - so another trip to get a formal 'paid' stamp was required. Our Notaire also required a new termite lead and asbestos check (approx 600euros) as the last one was over a year old..... still nearly there now.....

[HoneySuckleDreams]

Thanks for the feedback everyone.  In answer to the same question: yes, it was a holiday home, but the agreement was drawn up when we actually moved here and there are lots of clauses allowing one family (or both if both want to relocate!!) to have the use and to make sure the other family don't lose out.  I will keep you posted on developments.

[peterw]

An interesting post which brings up a lot of issues.

I know it is hard to be philosophical when in the middle of such a situation but it pays to be aware of human nature when entering into any form of "business relationship" whether it is formal or informal. Basically whether we choose to admit it or not, most people will look out for number one when in a partnership dissolution. If  we recognise this when going into a partnership, then far more attention would be placed on how to execute a get out clause.

As a starting point, I  am firmly of the belief that the party wanting to "get out" or sell should realise that this should be at no cost to the other party. Deciding what is at no cost is the hard part. The point is illustrated well by the wild variations that agents can provide. The agents of course are driven by wanting to get a listing which is more likely if a big price is set. Thus any set of agents valuations will be biased upwards. Part of an agents job of course is to manage buyer and seller expectations, to help establish a market price. The market price in reality is only dependant on what another party will pay for a property, not what a seller will sell for.

Perhaps a method of resolving such mismatches of expectations is for the partner "wanting out" to find a buyer at his expense- Valuation fees inspection fees notaires fees etc to be borne by them. Once a buyer is found  that becomes the sale price. No discount on the sale price, this is effectively given by the fact that the seller pays for the fees etc.

[fulcrum]

If it was me and I could afford the amounts involved without puting my financial situation in jeopardy. I would simply make an offer that covered the other parties financial outlay at the time they made the purchase. I would not allow for any supposed gains in the property market.

After all it is not your fault that they have decided to sell.

[P]

An ideal warning for others - go it alone as friends might not be friends when things go wrong.

It would seem though, if people do go this route that there needs to be legal document signed by all parties that covers every eventuality and how they will be handled.

As for those wanting out to get a lions share and all fees paid by the other party seems quite out of the question.