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What are the problems and pitfalls usually faced by foreigners who decide to collaborate with you?
The problems and pitfalls encountered by non-residents wishing to buy a property in France are multiple and recurrent. First of all, when looking for property, they often face the following difficulties: offers not updated on online real estate portals, real estate agents who do not reply to requests, a lack of time to search and visit, the multiplication of trips to France to make visits that cost them time and money. Also, most of them are fed up spending hours on research that ultimately fail. Some of the non-residents approaching us have sometimes spent more than a year on unsuccessful searches!
Again, once they have found a property the pitfalls and problems faced by foreign buyers are multiple: difficulties to negotiate a fair price with the seller, misunderstandings of the French property buying process, struggles to find a Notary speaking their mother tongue, a difficult understanding of documents drawn up in French (especially the sales contract) and many others. The role of our company is to allow foreigners to easily find their property in France while avoiding wasting time and money as well as the multiplication of trips to visit.
Once the property found, we accompany them through the Legal process, clearly explaining to them each step of the process and detailing the commitments of each of the parties and their withdrawal rights if something unexpected happens. We also provide them with a translation of all documents to their native language so that they fully understand them.
Once the deed of sale signed, we are involved in the establishment of utilities and home insurance that can also be tricky for foreigners because of the language barrier. We provide a complete management of the project from its definition to comfortably moving into their new property in France.
Which areas are of particular interest to the foreign buyers you collaborate with?
6 areas stand out from the others. First, Paris remains popular with foreigners over the years. The attractiveness of the city and the fact that real estate investment is completely safe contributes to maintaining a high level of demand. Then come Provence and the Alps for obvious reasons (quality of life, proximity to the sea and the ski slopes, excellent airport coverage). The surroundings of Grasse are particularly popular because this area offers both a real proximity (about an hour) with the ski slopes (Gréolières les Neiges) and the sea. The Pays de la Loire, Brittany, Aquitaine and Normandy are also regions that are highly attractive to foreigners, particularly for the Brits.
What do you think of the soaring prices in Bordeaux: sustainable or hype? Do you have a lot of enquiries about this city? Are these rising?
Bordeaux is a city that has really had a lot of media coverage in recent years. This factor combined with the implementation of a high-speed train line connecting Paris in 2 hours contributed to the soaring prices. We are expecting prices in Bordeaux to continue to rise for perhaps another 3 or 4 years and then stabilise. We do not think they will double a second time as we have seen over the past 8 years.
The sellers then take advantage of this situation to try to sell above the market price, and as these prices do not scare investors or Parisians who see in this city an opportunity for quick proximity to the Atlantic coast, it works. Also, similarly to Paris at the moment, the offer (especially in the city centre) is lower than the demand which sustains this price surge.
For us at French Property Connection, we have noticed an increase in enquiries for the Aquitaine region in general but the requests made by foreigners on Bordeaux itself remain low or nil. We think that Bordeaux really attracts the French more than foreigners unlike the surrounding areas.
Regarding your British customers, is Brexit already having an impact?
Paradoxically, we noticed a rather strong increase in the enquiries from the British in the first half of 2018. Against the trend, the likely establishment of Brexit in 2019 has accelerated the desire of British citizens to realise their project. According to a study conducted in the United Kingdom, 65% of Britons say that Brexit will not affect their decision to buy real estate in France.Furthermore, 23% say they want to accelerate the implementation of their project. Only 8% of them are willing to give up on their project once the final consequences of Brexit are known.
We can clearly split British buyers in two categories. The first group are people wishing to buy a second home in France. The other category includes British retirees who wish to permanently settle in France. The latter, even if the final consequences of Brexit are still unclear, could be really impacted to the extent that they will surely not be able to live in France while taking advantage of their British pension. This factor and the depreciation of the British Pound could force a large number of retirees to review their project.
Regarding the British wishing to buy a second home, they would also be impacted but to a lesser extent. Even if this category is also impacted by the fall of the British Pound, their main constraint might be their freedom to move within the European Union. A Visa could be required so that they can circulate legally and freely in France and having access to their property. Nevertheless, the possible consequences remain rather vague and bilateral agreements are already being negotiated between the different entities. It is difficult to predict what will be the final impact before the final establishment of Brexit and the resulting agreements.
46.3% of buyers negotiate only in the event of overrating property prices. According to the last barometer of real estate negotiation of the JDN and Logic-immo.com, 45.9% of the candidates for property ownership thinks the prices are unrealistic.
Do you think it is still possible to negotiate prices especially in Paris where the market is particularly tough?
It is still possible to negotiate and especially, what is of interest to the buyers, to lead a successful negotiation. The main thing is to accompany your offer with strong arguments to make the seller think. A seller has probably spent a significant number of years in the property he is marketing. He therefore has a high regard for it. For example, by highlighting the defects of his property, a buyer can bring a seller to see his property with an outside eye and thus force him to reconsider his position.
Buyers must also have a complete look at the seller’s situation and the reasons why he decided to sell his property. A property whose owner is in a hurry (divorce, professional move) will be much more easily negotiable.
This is different in Paris. The fall of the interest rates has motivated many buyers. The demand has therefore exceeded the offer even more so on 1 or 2-bedroom flats (which are suitable for single people, couples with or without children). The sellers overestimate their apartment knowing that a full-price offer will be made, and negotiations are becoming increasingly rare. At the moment, when you do not provide a seller with a full offer at the price he is asking for, it is difficult to buy this type of flat in Paris. It is necessary to be very patient or to accept to buy above the market price and accept the negative consequences that this can generate for the buyer.
For larger properties (from 3-bedroom flats), this phenomenon is much less visible, and it is always possible to negotiate. Supply remains higher than demand and it is not uncommon to achieve a reduction of between 10 and 15% depending on the initial price asked by the seller.
To contact French Property Connection:
+44(0) 151 515 2356
guillaume@french-property-connection.co.uk
samir@french-property-connection.co.uk
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