Property Auctions, an Alternative Way to Buy Property

By Schuyler Hoffman February 27, 2003

"Les Ventes aux Enchères des Notaires..." notaire auctions. The "séances" (auctions) are held twice a month at the Chambre des Notaires de Paris, at Place du Châtelet. I attended the most recent séance, February 24th.

There were six properties on the block for this particular auction. Three were within Paris, three were in the "banlieues" (suburbs). Each property had a minimum starting bid, in this case, ranging from 6,000 euro to 66,000 euro.

The large room was packed, with people standing in the back and along the walls, most of them wearing tags with their bid number. The auction was scheduled to begin at 2 p.m., but, as with many schedules here, did not actually begin until almost 2:45. At the front of the room, above the table where the auctioneer and other officials sat was a big projection screen used to show each property and its information. The screen also showed the bids as the sale of each property progressed.

There was also a person at the table responsible for "les bougies." This is a traditional system of timing the bidding for each property, "to give everyone a fair chance." One main tall candle is lit. When the bidding stalls, the auctioneer calls for another candle to be lit. This is actually a wick, which burns for just a few seconds, lit from the main candle and placed in a two-candle candelabra. If no further bids are made by the time the wick burns out a second one is lit, and he calls out "dernier feu!" Literally, "last fire." If no one makes a bid before that wick goes out the bidding is closed on that property. If a bid is placed before either of the two wicks go out, the process starts over again.

It was surprising how quickly the entire auction proceeded. It took no more than three or four minutes to auction off each of most of the properties. The longest, for a one-bedroom near the Sacré Coeur, took about eight minutes. The entire auction was over shortly after 3:00.

You can arrange to see the properties prior to the auction through the notaire representing each property. If you're interested and want to be able to bid on it, you must present a check to the notaire for the "consignation," the deposit amount, the day of the auction (for the properties in this auction this ranged from 1,500 euro to 13,200 euro). You must also arrange for financing in advance and provide this information to the notaire.

The thing that originally caught my eye about the auctions was the prices for the starting bids...seemingly low based on the descriptions and photos of the properties. Naturally, the prices were bid up considerably. The "hot" property mentioned above, started at 59,000 euro. Following eight minutes of bidding it sold for 118,000 euro. The price of only one other of the six offerings doubled like this. Most sold for 10,000 to 20,000 euro above the starting price.

While these auctions can be a good alternative method of buying an apartment here, even for foreigners, there are a few things to keep in mind. In addition to the final cost of the property and the notaire fees, you will pay a fee of 1% of the price (minimum 387.50 euro). This fee goes to cover the costs of the auction and its promotion. The deposit, of course, is applied to all this (if you are not successful in your bid, your deposit check is returned to you that day). A successful bidder has 45 days to complete financing and pay the balance on the property.

One of the most important things to be aware of is that this type of purchase does not allow a conditional clause for financing in the sales contract nor does the normal seven-day period to reflect on your purchase apply. Essentially, when you buy at auction it is yours.

Additional information on Les ventes aux Enchères des Notaires can be found on the website at http://www.encheres-paris.com/ (in French). Though the site has a button for an English version, it doesn't seem to work.