Coronavirus Confinement with the Million Dollar View
Last night we got word from French President Emmanuel Macron that we’re back in a modified lockdown as of tomorrow night at midnight. For four weeks, at least until December 1st, hoping to bring the outbreak under control that is poised to overwhelm hospitals in just a few days. It’s not as full-blown as our spring lockdown, but it’s a reversal, for sure, and that means restrictions will play havoc on our ability to get things done…once again.
The gist of it is that schools will stay open, but universities will close. Bars and restaurants will close (guess that means I’m home cooking again, and if nothing else, saving money). Gatherings will be banned (but fortunately not on Zoom!) and once again, we’ll need an attestation form to leave home. Exceptions are work, doctor’s visit, help a relative, do essential shopping or go out for a bit of fresh air. Factories and farms will be allowed to operate—considered essential—and fortunately for me, travel between regions will be tolerated until the end of the weekend. I was able to get a return train ticket to Paris for Saturday.
After 10 days, they’ll take another assessment, but I doubt they’ll reopen the country at that time. We can’t afford another wave of infections. The goal is to get back to normal in time for Christmas, but it looks like my plans to go south for Thanksgiving like I usually do have gone south, too.
How all this will affect property sales is much like it was in the spring. What’s on the market will sit unsold because potential buyers can’t visit the properties. Transactions in progress should be fine as the Notaires have installed virtual methods of operating, but if there is a mortgage involved, the banks may be held back from processing the loans. This poses a real problem if sellers aren’t willing to wait. But what choice will they have? They can’t find new buyers!
We have a situation in Nice with a transaction that mirrors a similar issue we had not long ago, thanks to the pandemic’s affect on the lenders. In this case, the seller prefers to sign the pre-sale agreement without a loan contingency. The buyer needs the protection of the contingency should they fail the ability to get the mortgage—although the bank has given them a big thumbs up for the loan, so they feel confident. The negotiations have gone on for weeks, while the signing has been held up all this time…and looking back on it, wasting time, as it could have moved on faster. Now we are at these crossroads because the seller will not find another buyer for a very long time and our buyers may have issues getting the mortgage, not because of their own inability, but the bank’s ability to operate on a normal timeline. The situation is tricky! And we want to protect our buyers, but at the same time ensure they don’t lose the purchase of the property.
The interesting aspect of this situation is this: when a pre-sale agreement is written, it includes a deadline for the loan offer and then another one for the closing. If the buyers cannot meet the deadlines, the seller can force a default and that means the buyers will lose their 10 percent deposit to the seller. But, here’s the catch: the Notaires cannot turn over that 10 percent deposit without express permission from the buyers, therefore the buyers could force the seller to sue them for the money. The bottom line is that it’s more advantageous for the seller to simply have patience and wait for the transaction to take place rather than become embroiled in a law suit that costs lots of time and money. The strategy of negotiation is key in this case and this is what we’re faced with at the moment, with no real answer about when we’ll be back to normal.
Yesterday, Nice Search Consultant Ella Dyer and I visited an apartment for sale in Villefranche-sur-Mer owned by an American who has had it many years. It’s been on the market well over a year. The real estate agent claims the reason it hasn’t sold is the price is too high as she has shown it to many different potential buyers. The owner has asked us to determine if the pricing is correct and if it might have interest by our North American buyers. The agency is a small firm located in town that has been in business there many years, but would have no access to our wider market, so perhaps that’s the real reason.
Nonetheless, the property is a perfect revenue-generating property all year long because it is steps from the Institut de Français with the same (if not better) views of Villefranche-sur-Mer and Saint-Jean Cap Ferrat…what I have always called the “Million Dollar View.” The well-known internationally attractive language school has a two-week and four-week program of intensive language learning and its students rent nearby housing to attend the school. The school helps place their students in these apartments and we have clients with properties in the area who have greatly benefitted from this.
This apartment fits that bill. It’s a large one bedroom apartment (55 square meters) in a contemporary building above the Basse Corniche, to which one must access by car. Ella and I walked up several flights of stairs to arrive there, so it’s doable by foot, but wasn’t something one might want to do on a regular basis, therefore a vehicle would be necessary. There are two flights of stairs down to access the apartment, with no lift (another potential reason), but it’s a small price to pay for the view and the other amenities it offers…a large terrace, well-equipped kitchen and a large private outdoor terrace for dining or whatever. The views are drop dead stunning and I found it quite attractive overall, though in need of an update.
We will likely offer the owner a mandate to sell the property—as long as we can come to a price that will suit our potential buyers as well as the seller. Without that, the seller can expect it to sit on the market a whole lot longer. If you are interested, please contact us for more information. Then, you could have that Million Dollar View, too…even if in confinement!
Adrian Leeds Group®
(taking the path to the apartment in Villefranche-sur-Mer)
P.S. For those of you dreaming of a move to France or even a property purchase, while under shelter-at-home or concern over the U.S. elections, we offer small-group consultations via Zoom. To inquire about upcoming consultations, contact us here. I’m also happy to connect with you on Skype or by phone. We can talk about a strategy to change and enrich your life by living or investing here. Contact us to schedule your time.