Making an Offer on a house

[Bertiebe]

We are relatively new to France, but after much research think we have found the house of our dreams.  The question is this, the house has been on the market for 3 to 4 months and apparently the Agent has advised the seller that he will have to accept a reduction in price.  The house is advertised at Euro: 190,000 (incl agents fees).  Can anyone give us any guidance on the approximate amount we should offer ( we have heard that we should not be taken for a ride and should offer only 60-70% of the asking price!!)  Any advice would be gratefully received.

Secondly, there appears to be a few woodworm holes in the floorboards of one of the bedrooms (very tiny and looks like furniture beetle according to one of the UK websites), should this be something to worry about.  I have heard the house is not in a termite region (Haute Pyrenees).

Thanks for any info.

[Eslier]

It is impossible for anyone to advise you on the value of this property without knowing the house and the commune it is situated in. You will need to compare it with similar properties in the same area to get an idea of what the true value is. Four months is not long for a property to be on the market in France, so this is no reason alone why the vendor should be expected to accept a low offer. It is quite customary for some properties to remain on the market for years.

Having decided upon a rough valuation of the house in this area, you need to think very carefuly about what it is worth to you. It is important that you agree on a price that you are comfortable with, which may have little to do with trying to get a bargain. Don't be swayed by tales of bargains that can be had, the reality is that the majority of properties exchange hands at a fair market value.

A little bit of woodworm is not usually anything to get worried about and is quite common in France. If you are worried about it then get an experienced French carpenter builder to view the house with you and ask him to advise you if he thinks you need to investigate it further.

My advice would be to make the vendor a fair offer - which may be well below the asking price or on the other hand may be only just below the asking price. Be prepared to negotiate but keep in mind what it is worth to you. Remember also that if you go ahead with the purchase, it will be far better to be on friendly terms with the vendor if at all possible.

[Cassis]

How badly do you want the house?  Is it the house of your dreams?  Is it a fair price compared to other properties you have seen?

Totally agree with Eslier on woodworm - even if active, unlikely to be a major problem unless you can feel the boards flexing under your feet.  And no, 4 months on the market is not very long at all - I know of several properties that have been on the market for over a year (several years in some cases) but the owners are in no rush to sell until they get the price that makes their move viable.  They may be expecting too much, but that does not mean they will take significantly less.

If you know the sellers are desperate to move, that can put you in a stronger position.  But offering 60-70% of the asking price is ridiculous unless you know they are VERY desperate to sell and it is clearly overpriced.

PS If you are already in Toulouse then I assume you have a fair grasp of property values in the area? [8-)]

[Bertiebe]

OK, I thought it would be useful to people to keep a running record of our experiences:

So, we've gone in at 168000 Euros on a house which was for sale for 190000 (seems to be about the going rate in the village; even the agent thinks 190000 is a tad steep).  Initially the owner said 'absolument pas!' but has since mellowed (in a single day) and now seems to be trying to cut a deal.  I don't understand all the ins and outs that the agent is trying to explain but it seems that the owner will take 173000 and will do our bathroom up for free and there's something about a tax dodge which benefits him (I haven't figured this bit out yet but my other half remembers reading something in the magazine about if the house is sold by the end of the year they don't pay tax fonciere/d'habitation).  The agent is not willing to send me an e-mail describing the details so it sounds rather 'unofficial' to me.  Anyone come across any fiddles which sound like this before?

So far it's rather fun.

Thanks to Cassis and Eslier for your input.

[Cassis]

[quote user="Bertiebe"]there's something about a tax dodge which benefits him (I haven't figured this bit out yet but my other half remembers reading something in the magazine about if the house is sold by the end of the year they don't pay tax fonciere/d'habitation). 

[/quote]

Probably referring to the fact that the owner on 1st Jan pays the taxe foncière for that year.  I think it's normal to split the taxe d'habitation pro-rata, though.

[suein56]

[quote user="Bertiebe"]OK, I thought it would be useful to people to keep a running record of our experiences:

So, we've gone in at 168000 Euros on a house which was for sale for 190000.  Initially the owner said 'absolument pas!' but has since mellowed (in a single day) and now seems to be trying to cut a deal. ... it seems that the owner will take 173000 and will do our bathroom up for free ...
[/quote]

I might be a little cynical but, be careful that this does not mean that the owner will accept 173000 net to him and then the agents fees will be on top, so at 5% this could mean 173000 + 8650 + notaires fees on 173000. It pays to double check.

Sue

[andyh4]

Also be very certain that he is not expecting some of the payment to be made directly to him rather than through the notaire.  The cost of the house is important in determining tax liabilities, by accepting an under the table payment he may be trying to avoid paying some tax - BUT if when you come to sell the house later  increases in value will be based on what the notaire has recorded as the purchase price and not what you paid

[Bertiebe]

Andy makes a good point... and this is exactly what our vendeur is proposing.  Seems to be 'unofficial' as I thought but goes on all the time.  As I see it this has both pluses and minuses for the buyer.

On the plus side, the purchaser benefits from paying notaires fees on only the 'over the top of the table' amount.

On the minus side, yes the purchaser may have to pay for a greater profit margin later AND, what if you pull out as a result of 'clauses suspensifs'?  I bet you'll have a whale of a time trying to get the 'au dessus du table' money back.

Of course we shall not be considering anything faintly shady.

[Sunday Driver]

You forgot the other, more important minus side: 

What your seller is proposing is tax evasion - the reduced "over the table" price deprives the state of the full tax due on the transaction. You are both likely to go to prison for it. 

You are right when you say this is shady.  Find another house.