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Immobilier's fees.


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We have our house up for sale again , with four different immos. We've had a lot of viewings, especially from one immo in particular, who has the best website. But only two lowish offers.

So it's just dawned on us to check their fees, and we found that three were around 7%, but the other, from whom we had had so many viewings, 11.5%!

I was wondering what experience other people have had with immobilier's fees?

Another question - if an agent sells a house for his company, does he or she get the commission, or is it shared?

The way things are going, we are thinking of trying to sell privately when these mandates have expired. Perhaps we could do this now? Though the truth is, we're not in a hurry to sell, as we are happy here for the moment.

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When you sign a mandate with an agency to sell you property, the agency commission level (percentage) is clearly stated, together with the agreed sale price and what would be left to you in the event of a sale at the asking price (prix net vendeur). The agency's commission scales should also be clearly posted at the agency. Levels of commission are not regulated and can be freely set by the agency.

Agency commission goes to the firm, with a percentage of it paid to the negociator who handles the sale.

Note that even 'mandats simples' can have far-reaching effects, such as not selling privately to a client originally introduced by the agency, sometimes for a period up to 24 months. Although you may 'not be in a hurry to sell' note that if the agency introduces a buyer willing to pay the asking price you may well find you are obliged to sell, or risk financial penalties, which can include paying the agency's commission and possibly compensation to the would-be buyer.

Mandates are governed by France's strict laws of contract and should not be entered into lightly.

Peter-Danton de ROUFFIGNAC MA LLM www.francemediterraneanproperty.com

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I think we should have tried to negotiate a lower fee.

Actually, I've checked again and the 11.5% is for clients from the UK as someone else has to share the fee. And most of those who have viewed were french.

So I must work out what the fee is for french buyers.

M. de Rouffignac - thanks for the info . We do know that if we are offerred the asking price we have to accept, and we would [:)]

But I didn't know about the restrictions on selling privately, even after the mandate expires, so must read the small print.

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11.5% is very unsusual. I've never heard about an agent asking more than 10%, and then only in case of very cheap property, like a ruin or a plot of land. For a normal home, the fee is usually around 6% though you might be able to negociate this down to 5% or even lower, depending of the eagernes of the real estate company.

Never sign a 'mandat exclusif' and try to advertise your property on as many internet sites as possible. Like immo-free.com, leboncoin.fr. If you sell without a real estate agent, your notary public can take care of all the legal issues, including the obligatory researches (lead, asbestos, energy etc.). For free!

If necessary you can hire someone afterwards, to take care of the paperwork and make certain there are no mistakes in your compromis de vente for a modest fee of about 1 or 2%. Even if you find your buyer through te relatively expensive advertising site (1%), you have still saved 3% - thousands of pounds.

In short, your real estate agent is a typical example of a bad apple, spoiling it for the entire basket.

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[quote user="Krek"] If you sell without a real estate agent, your notary public can take care of all the legal issues, including the obligatory researches (lead, asbestos, energy etc.). For free!

[/quote]

I think you'll find that the obligatory surveys (the diagnostiques) are up to the seller to pay for.

On the other hand, having the compromis de vente done by the notaire doesn't cost any more - it's included in the notaire's fees, and it ensures that all the legal angles are covered.
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Well, of course, you'll have to pay for the diagnostiques yourself. I just meant that most notaries will organise this for you, as a service when you sign your deed with their offices. They all have their adresses, and probably get a little kick back (not allowed, but well...).

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Never sign a 'mandat exclusif' ..........

Unless it suits your needs. As I have said before, this can sometimes be a good option for the seller, particularly if the agency works within a group of other agencies for each exclusive property, and particularly if the seller lives elsewhere, doesn't speak French, or doesn't have the time to do the rounds of all agencies in the area. Yes, you can negociate the agency fees, but this is not done when you sign the mandat. The agency is bound by law to fill in the mandat/avenant/advertise the property in accordance with their declared fees (on display in their window/office). If they are willing to negociate the fee, it is normally done when an offer is made and the real sale price is being decided upon. Only then can they officially note the decrease in fees in the compromis/promesse d'achat. 

Jane

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  • 1 month later...
I complained about the fee we are going to pay on some land we are buying (58% of net vendeur prix) and the agent said it is the minimum they charge on any property.  I pointed out someone already bought part of the land and they charged the same fee for that part, and was told it was the same amount of work if they sold it off in separate parcels so everyone who bought a parcel would pay the same minimum fee.  Nice work if you can get it!

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The agency is not allowed to sign you up for a higher fee than the one displayed in his window. But of course he can go lower if he wants to. So do not wait until the negociation is under way (and you can't play the market anymore). Tell the AI that you will sign his mandate, but only if he restricts his fee to 5% of the selling price. This way your property will be for sale at a lower starting price and you'll have the more chance of selling.

The main disadvantage of signing a mandat exclusif is that you can't sell your house yourself anymore. Even if your neighbour wants to buy it, as long as the mandat is running, you have to pay the agency his commission. Also,

Of course it is even better to try and sell without an agency. Like 40% of the owners do. Just search the internet for 'vendre ma maison entre particuliers' ot 'FSBO France' and take your pick.

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"The agency is not allowed to sign you up for a higher fee than the one displayed in his window. But of course he can go lower if he wants to. So do not wait until the negociation is under way (and you can't play the market anymore). Tell the AI that you will sign his mandate, but only if he restricts his fee to 5% of the selling price. This way your property will be for sale at a lower starting price and you'll have the more chance of selling."

The agent is not allowed to display the property for sale at a reduced rate price - he has to advertise according to the fees he has in his window. As I said before, it is negociable at the offer/compromis stage but not for advertising purposes.  

"The main disadvantage of signing a mandat exclusif is that you can't sell your house yourself anymore. Even if your neighbour wants to buy it, as long as the mandat is running, you have to pay the agency his commission."

Yes, this is a disadvantage if you live in the property and might know someone who wants to buy it. It's ideal if you do not live nearby. But I don't undertand you point about paying the commission - it's the buyer that pays, not the seller.

Regarding the post about 50-odd% commission - this is not uncommon if the land is sold at a lowish price. I work in an agency where anything up to 35.000E incurs agency fees of a flat 3,000 euros. So, if you buy a plot of land for 3,000 euros you could pay 100% fees again, making it 6,000 euros. and then you get hit with, I believe, over 100% of the sale price again at the notaire's office. It's not hidden - it's there in the agency window. Obviously if you are buying a plot of land that costs a lot more than that, then I apologise - 50 % commission is unheard of at the higher price end.

Jane


 

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The agency can put any percentage he wants in the mandat, and publish the house in his shop window for the 'inclusive price' that is also on the mandate. If a house is 1 million euros and he decides to take only a decent 1.5%, he can publish the house in his window for 1,015,000 euros. This is the price that is also in the mandat. The buyer is not concerned with the amount of commission, just with the total acquisition price.

If you work for an agency, Jane, you should know that it is not the buyer who pays the commission of the agent. The buyer often has no obligation whatsoever to the agent. The seller has signed a 'mandat', so it is the seller who has agreed to pay the commission.

The fact that the seller usually makes the buyer fork over the fee, does not change the legal facts.

What it comes down to, is that the agents commission deminishes the total negociation 'play' that both buyer and seller enjoy. If the owner wants 100,000 for his house, it will usually be put up for sale for 116,000 (including 6% for the agent plus 10% negocation room). If the buyer has a maximum budget of 100,000, the sale will not be made. Because even after using up the negociation margin, the house will still be 6.000 over budget. The buyer will have to go down to 94,500 (plus 6% makes 100,000)  or the buyer must pay more. Without the agent the house would have been put up for  110.000 and after haggling would have been sold for 100,000. Agreed, sometime an agent will lower his fee a little to make the sale happen after all.

But whichever way you turn the story, the agent makes the sale more expensive. This is why it is easier to sell without.

Of course, if you live in England and you can't go to France to show the house to interested parties, it is handy to use an agent. Or a friend or neighbour for that matter. But this is still no reason to sign an exclusive contract. Just have three keys made an give one to each of the agents of your choice. Let them compete. They might work harder and you still have the liberty to find your own buyer through a 'for sale by owner'-site and save 6%.

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Like the original poster very well said though, the agency that is charging him the most commission is also briging more visitors. After you have some people interested if the price is high you can always ask the agency to move their commission down for the sale to go through. I mean even a greedy agent knows that 5% of something is better than 11.5% of nothing.

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I note that one major agent " B--- as in B--- on the Landscape" now only  charge 4-8%.I did say only !!! I think  Immo's haven't woken up to the fact that over the last 15-20 years just how much French property prices have risen. Add on the Notaire's fee and it is a substantial add-on to the vendors asking price. Also I believe that if you have a Mandate Simple with several agents you can still advertise yourself. Beware of potential buyers who sign a viewing paper at the Immo and then try and bypass their fees.

First house bought at £14k add on 8% not too bad. House price £300k+ add on 4-8% + Notaire's fee rather a lot.

Bad for the buyer that is.

Regards.

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When we bought our house last year we had been negotiating over the price with the vendor (via the immobilier). The vendor came down but not enough and we were going to walk away from the purchase. The immobilier then agreed to reduce their fee and we got to a price we were prepared to pay.

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