Who to pay the initial deposit to on a purchase

[JulesB]

After asking about where to start on buying a property in France we have been lucky to find somewhere first time.

I've read on the forums about the initial deposit going to the notaire but we've been asked by the Agent to give them their fees as the deposit.  (It's less than 10%).  Is this normal?

Thanks

jules

[Cassis]

I don't think so.  Our deposit was held by the notaire and the agent got nothing until completion.

[JulesB]

Perhaps I'd better contact the agent tomorrow before I transfer the money then!  I don't have the notaires details yet either so can't check with them (although i don't speak French yet so that could be difficult anyway).  Any other advice would be appreciated.

J

[Albert the InfoGipsy]

We paid our deposit to the agent and the amount is shown as credited (a deduire) in the settlement statement from the notaire.

I suppose it depends on how trustworthy you think the agent is.

[Gardian]

Dodgy:  don't do it.

Tsfr the deposit to the Notaire: he'll sort it out from there.

[BJSLIV]

Its not as dodgy as some people are making out. Its a very common way of doing things.

An agent will have a dedicated account (un compte séquestre) for holding clients deposits.  This normally features on his professional literature, business cards etc.

We paid our deposit this way 15 years ago, and everything went perfectly smoothly.

 

[Gardian]

[quote user="BJSLIV"]

Its not as dodgy as some people are making out. Its a very common way of doing things.

[/quote]

Maybe.  But why not insist on doing it through the Notaire?  As far as anything in this world is, it's risk free.

I know which option I would take.

[Nick Trollope]

I'm with Ian, especially as this Agent appears to want the deposit up-fronted for his fees. That is not normal (or even legal, I'd guess).

[Miki]

As BJ has said, this is very common.

Out of 4 purchases, twice we have paid the French agent  the

deposit. This is completely legal and as stated, they will have an

account for dealing with deposits. Too much doom, scare and panic over

this. The only time we never paid the immobilier, the purchases were

made

through a Notaire anyway.

Is perhaps the agent in question a British based one, in which case I personally would not pay them a penny and would deal direct with the designated  Notaire.

[Quillan]

Paying and agent as said by  BJSLIV is OK normally but what seems rather strange in this case is that the agent is asking for fees which don't total 10% of the asking price. I think in this particular case I would ask who the notaire is and tell them you will pay via the notaire or not at all.

[Will]

This sort of question is always a difficult one to answer in clear-cut fashion. Although procedures should be standard, they do seem to vary between areas and agencies.

The French agency for which Mrs Will works always insists on deposits etc being paid direct to the notaire, and tells clients that they should never pay anything up-front to any agency. The exception to this is where the agency has arranged some extra chargeable service on behalf of buyer and/or seller - for example where a geometre (land surveyor) has to be employed to establish boundaries.

Agents are supposed to have a secure account for clients' money, I understand it is a condition of membership of FNAIM (the French trade association for estate agencies). So there should be no problem involved in paying deposits to the agent. Conversely, there is no benefit to the agent in holding your money in such an account - interest is non-existent or minimal. So many agents prefer not to have the hassle and responsibility of handling deposits. There should be no problem with a reputable agent if you say you would prefer to pay the notaire direct.

If you do pay the deposit to the agent, make sure you get a receipt, stating date, amount, what the money was for etc. We have heard several stories of certain agencies denying that deposits were received from clients, or notaires querying the amount that was handed over by the agent and demanding more from buyers to make up the short fall. So do be careful - don't trust anybody more than you have to.

Having said that, the vast majority of agents are totally straightforward - it is a very small minority that gives the profession its bad reputation. Equally notaires can make mistakes - and blame agents, banks, everyone except themselves - so make sure all transactions with them are documented too. So you do not need to worry unduly, at least not until something goes wrong. The trick is to try and reduce the possible consequences of something going wrong. Topics elsewhere on this forum prove that things do go belly-up occasionally.

Paying the agent's fee in advance does sound somewhat irregular. Normal practice is for this to be paid to the agent by the notaire at the end of the transaction. Nevertheless, if you have paperwork showing what you paid and what it was for, there should not be a problem.

The above assumes you are dealing with a French agent and notaire, either direct or having been  referred by a sub-agent in Britain. There are some British agencies selling houses in France who operate in a totally different fashion, with their own scales of fees. These come largely outside French laws and procedures and their practices are a totally different kettle of fish. At least one of them is a high-profile copany which has done a lot of advertising and is prominent at exhibitions etc, so they are not fly-by-nights. They just operate differently: many customers are happy with the service, though others often query the amounts charged.

[Rob Roy]

[quote user="BJSLIV"]

Its not as dodgy as some people are making out. Its a very common way of doing things.

An agent will have a dedicated account (un compte séquestre) for holding clients deposits.  This normally features on his professional literature, business cards etc.

We paid our deposit this way 15 years ago, and everything went perfectly smoothly.

 

[/quote]

We also paid the agent, although it was only 7% from what I can remember. On the day of the signing he wrote a cheque to the notaire (from his holding account) for the deposit amount. The notaire did not seem to find this unusual.

[Benjamin]

Will

You state that you understand the Agent, if they are a member of FNAIM have to have a secure account for client's money. Is there a guarantee that if the Agent turns out to be a rogue even though he is a member of FNAIM, then the purchaser's money is some how guaranteed by FNAIM?

If there is no such guarantee, even though the chances of anything going wrong are very remote, then I think I would always feel happier paying deposits etc. direct to the Notaire.

Benjamin

[Will]

Benjamin - I don't now if FNAIM offers any such guarantees. Maybe somebody connected directly with an FNAIM member agency could answer that. FNAIM seem to be more of a body that represents its members, lobbies on behalf of the property industry and collates market information than acting as a consumer protection body, though it does use the slogan 'L'immobilier en toute sécurité' (property with total safety).

[BJSLIV]

from the FNAIM website           Obligations for a member of the organisation

Il doit aussi justifier

d'une garantie financière destinée à assurer les fonds détenus pour le compte de tiers. Fixée en fonction de l'exercice civil précédent, cette garantie s'élève à 110 000 euros minimum pour les professionnels qui encaissent des fonds (30 000 euros pour ceux qui n'en encaissent pas) et 120 000 euros minimum pour les adhérents FNAIM, un gage de sécurité supplémentaire pour le consommateur. Elle augmente ensuite par tranche de 20 000 euros, selon le chiffre d'affaires.

Il doit impérativement afficher certains documents, notamment :

le numéro de sa carte professionnelle
le montant de sa garantie financière
le nom et les coordonnées de son organisme de garantie
le taux de ses honoraires et leurs modalités de calcul.
Il doit obligatoirement détenir un mandat écrit, simple ou exclusif, l'autorisant à négocier ou s'engager.