Negotiating the price of a French property
Negotiating the price can be tough for the buyer, and even for the seller. But it can be cheaper if you concentrate on one main objective: obtaining the property of your dreams at a good price.
Let’s focus on some solutions or advice for a better and more comfortable negotiation of the purchase of a French property:
• Find a bargain
Currently there are a wealth of properties for sale in France, and fewer buyers than before. Thus it is a buyers’ market, with vendors more anxious to attract attention to their property and sell at a good price, putting you in the dominant position. If you need to sell your property in the UK first and are worried about the downturn in prices here (maybe receiving 10% less for it) don’t forget that properties in France may still be up to 15% cheaper.
• The decision in principle
In this case, the very first and most important step in the negotiation of a property’s price is the Decision in Principle. The buyer is to have a clear idea of what he is looking for, especially of how he wants to reach his goals. The buyer is responsible for planning all the steps of the purchase. For example, in relation to finances, can he pay for the property in cash or will he need to take out a French mortgage? The buyer will need to have proof of this. Having a strong financial position makes for a better negotiating position.
It’s also important for the buyer to have quite precise ideas about where he wishes to buy a property (perhaps an area where he has spent many holidays) and what sort of property he wants (a village house, a county estate, plenty of land and so on) By having most of his plans in place, the buyer may have the opportunity to better negotiate the price with the seller. He’ll also be taken more seriously by the estate agent.
• No rush
Buying a property with a mortgage often takes a lot of time- there is a lot of paperwork to fill in, which can take a little while! It’s best to think long and hard about what would work best for you. Here at Sextant Properties we’re ready to help and advise you every step of the way.
• Keep yourself informed
Prices are of course not the same in all geographic areas of France – More undiscovered areas or places away from the sea such as Auvergne and Limousin are a sure bet- your money will go a lot further here. In the long run you’ll probably see higher returns. In the South of France however there hasn’t been too much of a downturn in prices and many people are selling second homes so aren’t in a huge hurry, thus limiting any negotiating.
We also advise you to have a look at the area and its surroundings before purchasing a French property, e.g the price of a small studio could easily be doubled if the apartment is located in peaceful surroundings only for the next Olympic village to be inaugurated around the corner. Be cautious!
• Stay firm throughout
Don’t be too flexible about options you are offered. Make sure the estate agent knows that you may walk away from the purchase if you don’t obtain what you want. Remember however that an offer of 10-15% below the asking price is generally as reasonable as it gets. Asking for 30% less than the advertised price is probably unrealistic.
• Is the property hard to sell?
Note that the price of a property can decrease if it has been for sale for a long time. If the property has only been on the market for a few days or weeks, you won’t have any chance of lowering the price. The longer a property has been for sale, the greater the chance of negotiating a price reduction. Make sure you have a good relationship with the estate agent- he’ll know the local market well and can advise as to whether a property that has caught your eye is in fact a bargain.
• Don’t forget about agency fees
If there is no scope for lowering the vendor’s price, the agency may agree to lower their fees so that the sale can go ahead. Indeed, don’t forget that there is the vendor’s net price, then the price with agency fees on top. If the agency does reduce their fee somewhat to a rate acceptable to him, vendor, buyer and agency can all be satisfied.
• Are there renovations to be done to the property?
If the house in question needs full renovation (if it’s a barn to renovate or house or a mill in ruins) insist on the fact that converting and restoring the property could be very expensive.
If you keep in mind some of these points, you’re sure to be in the best possible position for negotiating and buying your dream French property.