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A cooling French property market

Connexion edition: May 2007

A slow-down in the French real estate market over the past year is good news for buyers, who are in a strong position to negotiate lower prices.
Between 2000 and the end of 2005, real estate prices soared in France, increasing on average by 13 per cent a year.
In 2006, prices rose by only 7.6 per cent, according to the Fédération Nationale de l'Immobilier (FNAIM).
Properties are taking longer to sell and buyers have a range of strategies at their disposal to reduce the initial asking price. Those wanting to sell are naturally inclined to minimise their property’s shortcomings, and it is up to buyers to point these out.
Estate agents say that by listing the negative aspects of a property in front of the seller, buyers will be in a stronger position to negotiate the best price possible.


Becoming familiar with the market will help the process according to estate agent Frédérique Tisseau of the Agence de Puyricard, north of Aix-en-Provence.
Before beginning negotiations, an in-depth knowledge of the market is necessary she said.
“The best way is to make comparisons between different properties in the same geographical sector.
“To to be able to do this, you need to make around a dozen visits,” she added.
Estate agents’ web sites or specialist trade publications such as Logic Immo are useful to make comparisons between the price per square metre, number of rooms and the size of the garden or balcony. Keep in mind though, that the French have a different way of evaluating properties compared to the English. Anglo-French agent, Sean Furlong of Saint des Fontaines, south of Perpignan said: “In England, it’s the maximum number of bedrooms which equals the maximum price, while in France there’s no real leap in price whether there are three or five bedrooms. The first thing the French look for is a large living room so that they can fit all their furniture in.
“They also like a large, convivial space where they can have meals.”
An English-speaking estate agent is invaluable to avoid confusion or missed opportunities, he added.
The convenience of public transport such as a metro station or bus stop, schools, shopping centres and markets can affect a property’s price and be used as a
bargaining point.
Again, the French and the English have different priorities, said Mr Furlong.
“For a French person, it is more important to live on one-level and be able to walk into town and buy a baguette every day.
“For an English person, a house with a view on the outskirts of a village will be more appealing.”


Buyers can also use the prospect of structural work, renovations, poor maintenance of plumbing and electricity and general untidiness as leverage to reduce prices.
“In England when a house is for sale, it will be so clean that it will look like a show home. On the whole, the French do not go to the same effort to put on nice background music during a visit or even clean the windows,” Mr Furlong added.
“They expect a coup-de-cœur or for buyers to just fall in love with the place.”
Pierre Heimke of the Century 21 Saint Guilheme Agency in central Montpellier said a good technique is to calculate how much the apartment or house, including the plot of land, would cost to build new. He estimates the cost of building a new house to be between €1,100 to €1,500 per square metre, plus an extra 5% to cover fees for the architect and building permits.


Buyers should not be shy to ask directly why the properties are being sold. Replies are often revealing.
“Properties are for sale for all sorts of reasons.
“It may be because of a job transfer, a divorce, a death or an inheritance split between several children", Mr Heimke said.
If the owner is moving for professional reasons, chances are they will be in a hurry and prepared to negotiate. That same urgency can be detected, and exploited, if the sellers have taken a high-interest bridging loan.


It helps to find out how long a house has been for sale.
Buyers can find out how long a property has been for sale by following the market over several months.
If it is still for sale after three months, then it is probably over-priced, says negotiator Gérald Gavaudan of the ERA agency in Venelles, north of Aix-en-Provence.


He gave an example of a 220 square metre maison d'architecte on the market for more than a year in an upmarket neighbourhood in Venelles. The owner, who recently moved out, originally wanted €580,000 but dropped the price to €520,000. The house remains on the market but no longer has a lived-in feel which makes it less attractive to buyers, he said.
In an article in financial magazine Le Particulier, the president of the Espaces Immobiliers BNP Paribas Jean-Claude Szaleniec advised buyers to locate the properties that interest them from the outset, even if they are over their budget.
Mr Szaleniec said: “If they are still for sale after a month, visit and then make an offer inferior to the advertised price.”


Another technique is to exploit the property’s faults.
One of the main inconveniences is noise, both inside (due to poor phonic insulation as was often the case in the 1960s) and out (caused by a busy road or nearby railway line).
“Even if the property has an obstructed view and a magnificent swimming pool, if it has traffic noise, it will be harder to sell than a lesser quality construction in a quiet location,” an agency based near Cannes told The Connexion.
A property in a noisy location can lose between 10 and 20% of its value compared to a quiet area. Buyers should try to visit more than once, and not only during the weekend. Vary the times of visits, especially during the noisy hours. Background noise of traffic from a distant auto-route may be almost undetectable during the day, but can increase dramatically, and annoyingly, during rush-hour.
An apartment on the ground floor of a building is worth 10% less than an apartment on the first floor, which will probably have a better view, be less noisy, lighter and more secure, according to a recent newsletter by the LCL Particuliers Bank.
If the ground floor apartment has a garden however, then obviously it will be more expensive. If it overlooks a green space, it is worth 10 to 15% more than the same flat overlooking a road or a courtyard.

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