International

7 major differences between North American and French real estate markets

A list crafted by an agent who has experienced both regions

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I have had the pleasure of working seven years in real estate in British Columbia, Canada, and now I am in my fifth year of working in real estate on the French Riviera in the south of France. My experience in two entirely different marketplaces gives me the opportunity to share with you valuable information that can help you become an international agent and work successfully with clients who live in North America and want to invest in France.

Here are some valuable tips — for more detailed information you can always contact me directly.

1. There are no complete multiple listing services (MLSs)

There are some small groups of agencies who work together and call themselves an MLS; however, the amount of properties that are marketed by these mini-MLS systems is approximately 5 to 10 percent of all the properties on the market. Currently, there is no completely unified MLS service in France.

Solution: To adequately serve your international clients with a quality selection of French properties, you cannot just look on one website; you need to connect to an extensive network of agents from different agencies in France who will supply you with quality properties for your clients to review.

2. 50 percent FSBO

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About 50 percent of the sales and purchases of property in France takes place directly between buyers and sellers with the aid of a French notary. There are no agents or agency fees involved.

Solution: To help your clients be aware of properties for sale in France you will need to search the “FSBOs” sites or “Particular à Particular” sites as they call them in France. FSBO sites are a well-developed part of the French real estate market. In fact, sometimes the best property for your client will be with a direct seller and the agent involved will ask the buyer to pay a service fee.

3. Mandat simple vs. mandat exclusif

The French word for a listing agreement is a “mandat de vente.” A “mandat exclusif de vente” is most likely the kind you use in your North American office. This is when one agency has the exclusive right to market the property.

Approximately 5 percent of properties for sale with an agency in France use the “mandat exclusif de vente” type of listing agreement. The remaining approximately 95 percent of listings with agencies are called a “mandat de vente sans exclusivité” or a “mandat simple.” A mandate simple is a listing agreement where the owner has signed a listing agreement with multiple agencies at the same time, and the owner also retains the right to market and sell the property directly to buyers.

Solution: Because so many properties with agencies are “mandat simple” you or your clients might find the same property is, in fact, listed with several agencies at different prices. The solution is to be in contact with an English-speaking French real estate agent who can help guide you through the French marketplace.

4. The expensive property transfer tax

When you buy a property in France, at this time, you need to have a French notary manage the transaction. The notary charges the buyer a fee, and a large portion of this fee is the property transfer tax that goes to the French government.

At this time, the total cost of notary fees is approximately 8 percent of the purchase price, regardless of the value of the property. A 1 million-euro purchase equals 80,000 euros in notary fees. The only exception to this rule is that the notary fees for brand-new property purchases are less.

Solution: Your client needs to budget for this additional, unavoidable expense.

5. Terminology

The vast majority of real estate offered for sale, whether it is privately offered or offered by an agent, is advertised in the French language — so you need to understand the French real estate advertising terminology and be able to explain it to your English-speaking client. Google Translate will not help here.

Solution: I have helped fund and develop a website that hosts more than 600 articles on French real estate in English so you and your clients can learn about the meaning of many French real estate terms plus current market conditions. You can read all of those articles for free. The site is called ESREA France.

6. Don’t expect the address

It is very rare for a French real estate agent to give a client or another agent the address of a property before they see the property with the client and agent. French agents typically set up a meeting place close to the property and then take the clients to the property. Therefore, you will rarely find a French property address indicated on a French real estate website.

Solution: Develop a relationship with local English-speaking French real estate agents who trust you enough to give you the address of a property so your clients can view location of the property online while still in their North American home.

7. The birth of a network

When you have an English-speaking client who wants to invest in France, you also have another challenge. There are not so many English-speaking French real estate agents, and they are hard to locate in many parts of France because there is no centralized directory until recently.

Solution: To help you connect with an English-speaking real estate agent in France, you can also visit ESREA France. We are creating an online directory of local professional English-speaking French real estate agents. If there is no agent noted on the site for the town in which you are seeking an agent, we will seek out an agent for you at no charge.

Visit the site ESREA France today, register to keep up-to-date on the French real estate market and link yourself to a network of local English-speaking French real estate agents.

Please note, salespersons, brokers and office owners: I am passionate about helping make the French real estate market more accessible to agents globally, so I am available if you wish to learn more about the French real estate market and how it compares to the North American market.

David Hennessey works in real estate in the south of France and is also the creator of TheWonderTechnique.com, a personal development program. He is passionate about making life more stress-free.

Email David Hennessey.