Buying a Home in France
David Hampshire
Buying a Home in France is required reading for anyone planning to buy property in France. It contains a wealth of priceless information and insider tips to help guide you through the French property jungle, and save you time, trouble and money. Regardless of whether you’re buying a family, holiday or retirement home, or a property purely as an investment, this guide will help ensure a smooth, problem-free transaction. Whether you want an apartment in Paris, a period townhouse in Nice, a farmhouse in the Charente or a château in the Loire Valley, Buying a Home in France will help make your dreams come true. Don’t leave home without it!
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Extracts from the book…
Negotiating the Price
When buying a property, it usually pays to haggle over the price, even if you think it’s a bargain. (Your idea of a bargain may not be the same as a French person’s.) Don’t be put off by a high asking price, as most sellers are willing to negotiate. In fact, sellers generally presume buyers will bargain and rarely expect to receive the asking price for a property (although some vendors ask an unrealistic price and won’t budge a centime!).
The practice of dual pricing (i.e. quoting higher prices to ‘rich’ foreigners) is rare; the prices advertised abroad are usually identical to those advertised in France. Nevertheless, in popular areas, asking prices may be unrealistically high (up to double the ‘real’ market price), particularly to snare the unsuspecting and ignorant foreign buyer. French owners are often astonished at the prices foreign buyers are prepared to pay for property and, although they will complain about foreigners pushing up prices when they need to buy, they seldom object when they’re on the receiving end! If a property has been realistically priced, you shouldn’t expect to obtain more than a 5 or 10 per cent reduction.
If you’re using an agent, it’s worth asking him what to offer, although he may not tell you, as he’s acting for the seller. It’s therefore wise to obtain an independent valuation (appraisal) to determine a property’s ‘true’ value. This can be provided by a number of experts.
Timing is of the essence in the bargaining process. Generally the longer a property has been for sale and the more desperate the vendor is to sell, the more likely a lower offer will be accepted.
Some people will tell you outright that they must sell by a certain date and that they will accept any reasonable offer. In other cases, you may be able to find out from neighbours why someone is selling, which may help you decide whether an offer would be accepted.
Buying a ‘distress sale’ from an owner who simply must sell is likely to result in the best deal. However, if you’re seeking an investment property it’s wise to buy in an area that’s in high demand, preferably with both buyers and renters. For the best resale prospects, it’s usually best to buy in an area or community (and style) that’s attractive to French buyers.
If a property has been on the market for a long time, e.g. longer than six months in a popular area, it may be overpriced. According to the FNAIM, apartments spend an average of seven weeks on the market, houses ten weeks. If there are many desirable properties for sale in a particular area or developments that have been on the market a long time, you should find out why; there may be a new road, railway or airport planned.
Before making an offer, you should find out as much as possible about a property, such as the following:
- when it was built;
- whether it has been used as a permanent or a holiday home;
how long the owners have lived there;
- why they’re selling (they may not tell you outright, but may offer clues);
- how keen they are to sell;
- how long it has been on the market;
- the condition of the property;
- the neighbours and neighbourhood;
- local property tax rates (see page 280);
- whether the asking price is realistic (compare similar properties in the area).
For your part, you must ensure that you keep any sensitive information from a seller and give the impression that you have all the time in the world (even if you must buy immediately). All this ‘cloak and dagger’ stuff may seem unethical, but you can be assured that if you were selling and a prospective buyer knew you were desperate and would accept a low offer, he certainly wouldn’t be eager to pay you any more!
If you make a low offer, it’s wise to indicate to the owner a few negative points (without being too critical) that merit a reduction in price. If you make an offer that’s too low you can always raise it, but it’s impossible to lower an offer once it has been accepted (if your first offer is accepted without haggling, you’ll never know how low you could have gone!). If an offer is rejected, it may be worth waiting a week or two before making a higher offer, depending on the market and how keen you are to buy a particular property. Note, however, that if you make a very low offer, an owner may feel insulted and refuse to do business with you!
Be prepared to walk away from a deal rather than pay too high a price.
Obviously you’ll be in a better position if you’re a cash buyer and able to close quickly. Cash buyers in some areas may be able to negotiate a considerable price reduction for a quick sale, depending on the state of the market and how urgent the sale is.
An offer should be made in writing, as it’s likely to be taken more seriously than a verbal offer.
Insurance
An important aspect of owning a holiday home in France is insurance (assurance), not only for your home and its contents, but also for your family when visiting.
It’s vital to ensure that you have sufficient insurance when visiting your home abroad, which includes travel insurance, continental car insurance (including breakdown insurance), building and contents insurance, third-party liability insurance and health insurance.
If you live in France permanently, you’ll require additional insurance, including third-party car insurance, third-party liability insurance for tenants/homeowners (see page 307), and possibly life insurance if you borrow more than a certain amount – all of which are compulsory. Voluntary insurance includes health, household and travel insurance, which are covered in this chapter, as well as car breakdown, dental, disability and life insurance and supplementary pensions.
It’s your responsibility to ensure that you and your family are legally insured, and French law is likely to differ from that in your home country or your previous country of residence, so never assume that it’s the same.
It’s unnecessary to spend half your income insuring yourself against every eventuality from the common cold to being sued for your last centime, but it’s important to insure against any event that could precipitate a major financial disaster, such as a serious illness or accident or your house falling down.
When buying insurance, shop till you drop! Obtain recommendations from friends, colleagues and neighbours (but don’t believe everything they tell you!). Compare the costs, terms and benefits provided by a number of companies before making a decision. Simply collecting a few brochures from insurance agents or making a few telephone calls could save you a lot of money. Note also that insurance premiums are often negotiable.
Further information about insurance in France can be found on the Service Public website (www.service-public.fr) or from the Centre de Documentation et d’Information de l’Assurance (CDIA), Fédération Française des Sociétés d’Assurances (Tel 01 42 47 90 00, www.ffsa.fr).
Health Insurance
Whether you’re visiting or living or working in France, it’s extremely risky not to have health insurance for yourself and your family; if you’re uninsured or under-insured, you could be faced with some very high medical bills. When travelling in France, you should carry proof of your health insurance with you.
Visitors
If you have a holiday home and come to France as a visitor (i.e. for less than 90 days at a time and less than 183 days in any year), you should check whether you qualify for free or subsidised health treatment in France as part of a reciprocal health agreement between your home country and France. If you don’t, you must choose between a private international health insurance policy, and holiday/travel insurance.
Residents
If you’re planning to take up residence in France and will be contributing to French social security (sécurité sociale) – e.g. if you’ll be working in France – you and your family will be entitled to subsidised or (in certain cases) free medical and dental treatment.
You must register with the local office of the CPAM and obtain a French medical card (Carte Vitale). Most residents also subscribe to a complementary health insurance fund (assurance complémentaire maladie, commonly called a mutuelle) that pays the portion of medical bills that isn’t paid by social security, although if you’re elderly this may cost more than it’s worth.
You should nevertheless check the conditions under which you may become covered by the French state health scheme and when such cover might become effective.
If you’re planning to take up residence in France, you should ensure that you and your family have full health insurance between leaving your last country of residence and obtaining health insurance in France.
One way to cover yourself for this interim period is to take out a holiday/travel insurance policy. However, if you already have private health insurance, it’s better to extend your present policy to provide international cover (which is usually possible) than to take out a new one. This is particularly important if you have an existing health problem that won’t be covered by a new policy.
Those on low incomes may qualify for couverture maladie universelle (CMU) without having to make contributions, although this provides only basic health cover. Residents who don’t contribute to social security (e.g. retirees) and aren’t covered by a reciprocal agreement (see Reciprocal Health Agreements below) or entitled to CMU must choose between a private international health insurance policy, which is mandatory for non-EU residents when applying for a visa or residence permit (carte de séjour), and holiday/travel insurance.
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PUBLICATION: June 2008
EDITION: 8th
PAGES: 368
BINDING: paperback
SIZE: A5 (210mm x 148mm)
COLOUR PHOTOS: over 100
MAPS: 27
