Enchère…Pas Cher!

PART I

We were attending this month’s “Parler Paris Après Midi,” but at the stroke of 5 p.m., many of the attendees headed over to the BNP Paribas headquarters in the 9th arrondissement to attend the Residential Property Investing Seminar. We arrived late about 1.5 hours after it had started in the midst of one speaker, but had the pleasure of being on time to hear Briton Simon Zutshi (http://www.justdoproperty.co.uk/), a self-made financially independent professional property investor, who by the age of 32 had generated a passive-income multi-million pound (British sterling) property portfolio – enough to quit his job and start teaching others how to be as successful.

Simon was entertaining enough in his presentation style, but brilliant in his investment thinking and was well worth the price of admission (in this case, free!).  His words were so similar to the ones I preach…”using OPM (Other People’s Money),” “positive cash flow” and “maximizing rental potential” to name a few.

Simon was ‘a tough act to follow,’ as I was on next, presenting a look at the price of property in Paris and the Riviera over the last 20 years and then making educated guesses on what we can expect the future to bring. In agreement with Simon’s point of view – the future is virtually impossible to predict, so one must work with the present opportunities to pave the best way for the future. In my opinion – both Paris and the Riviera, particularly central Paris and central Nice, hold lots of promise as strong investment potential.

As a subscriber to French Property Insider, you will have an opportunity to download the PowerPoint presentation I made before an audience of about 50 in the auditorium at BNP Paribas:

Click here: BNP Power Point

Enter the username: bnpseminar (all one word, lowercase)

And then the password: adrianleedsgroup (all one word, lowercase)

PART II

In the October 12th issue of the blog “Haven in Paris,” is an article I wrote for them titled: Buying In Nice: Negotiating Real Estate A La Niçoise. Blog editor, Geneviève, introduces the article:

“Navigating the real estate scene in France can be tricky — even more so when you are unfamiliar with the labyrinthine bureaucracy and unusual quirks the French can be known for. Adrian Leeds, who specializes in helping Americans negotiate the market to secure their dream pieds-à-terre in France, just recently ventured into the market in Nice. She shares a few anecdotes from her colorful experiences here.” To read the article in it’s entirety, visit: Buying In Nice: Negotiating Real Estate A La Niçoise

PART III

The signing of my Niçois apartment was scheduled for tomorrow, on my birthday. This afternoon I got the bad news that it can’t take place tomorrow…simply because the seller doesn’t have the legal right to sell what he doesn’t legally own!

Surprise!? You bet! The seller purchased the apartment by auction and the sale has yet to be officially “published,” therefore the seller doesn’t have the right to sell a property to which he does not fully have title!…and now we await the final documentation to prove ownership! Naturally this delays the onset of the renovation and creates a domino affect of repercussions.

The seller, however, made quite a good deal for himself. He purchased the property at one half of what he is selling it for and therefore is projected to earn quite a nice profit. This is one good reason to sell or buy by auction. The Chamber de Notaires provides more answers to why auctions can make a lot of sense (Real Estate Auctions in Paris):

Notaries’ auctions enable you to sell or buy any type of real property. They are the only method of selling that guarantees speed, transparency, market price and security. Four good reasons to buy or sell by auction:

Speed

A sale by auction takes only two to three months to complete, since the sale is ready to go and details of the buyer are already known. The sale takes place on the day of the auction, subject to the conditions appearing in the specification sheet. Together with his/her notaire, the seller fixes the date of the auction, making it possible to arrange the transfer of property at the most convenient time. He/she then collects the price obtained at auction within 45 days of the sale. The buyer is entitled to take possession of the property as soon as the proceeds have been paid.

Transparency

Public and thus accessible to everyone, auctions are always heavily advertised and are universally recognized as the most transparent method of selling property. The auction price is rarely challenged by the taxation authorities. Sales are held in public in the auction room of the Paris Notaries’. Whether the bid is made by a hand gesture or out loud, all those present in the auction room are aware of the previous bidding and the final offer.

The sale is thus made in the open. The property goes to the final and highest bidder, so the seller cannot choose the buyer. The result is published and can be viewed on the Web site.

The transparency of bids is the feature that is essential and vital to this method of sales.

Market price

In a sale by mutual consent, the price obtained is the result of negotiations between the seller and the buyer.

In a sale by auction, on the other hand, the sale price is the result of the various bids being made by all the potential buyers present on the market. The price obtained in this way is therefore the true market price on the day of sale.

Security

Auctions held by the Paris Notaries’ Chamber are managed and supervised by the public officials who are the notaries themselves.

Prior to the sale, the seller is advised by his/her notaire with whom he/she establishes all the conditions of his sale in the specifications sheet.

The specifications are made available to interested parties three weeks prior to the sale and they must meet all the requirements of the buyer. The price is not fixed by the seller but by the buyer, who is entirely in control of the limit that he/she wishes to impose and thus of the price that he/she intends to pay.

The buyers gather in the same room, each being able to see the opposition and able to react accordingly.

Buyers who are afraid of getting “carried away” by the excitement of the bidding can either be assisted by their own notaire, or by a notaire who is present on the day of the sale. Who sells? Who buys?

Buyers

People who buy at auctions come from very different backgrounds and from all walks of life. The simplicity of the way in which auctions are organized makes them accessible to everyone.

Notaries’ auctions are public sales and thus open to everyone. The date and location of the auction, as well as the properties being sold, are advertised beforehand.

Far from being accessible only to the initiated, the Paris Notaries’ Chamber auctions are, on the contrary, auctions accessible to any buyer.

• The buyers vary enormously because the auctions offer all types of real property, from a 300sq. m. flat (apartment) with garden to a serviced room, from office or shop premises to a factory building, from development land to residential housing, etc. These properties can be sold with or without vacant possession and the buyers can be the tenants or people totally unrelated to the properties.

• The properties are located in Paris or anywhere in France and buyers come from all regions and walks of life.

• The Paris Notaries’ Chamber does all it can to ensure that make it easy to participate in an auction. Everyone can place a bid directly. Genuine bids are guaranteed because a check is required for the deposit . This is a single check up to a fixed price of an amount of €125,000 and a further deposit of €25,000.

• In order to prepare for the purchase, each buyer, whether an individual or a professional, can obtain information from the seller’s notaire and may also be assisted, if required, by the notaire of his/her choice.

Important note

Buyers come from all different backgrounds and all walks of life.

Sellers

Auctions can attract all types of sellers (individuals, companies, estate agents (Realtors), local authorities, public bodies, associations and executors, etc.) who require speed, security and transparency while at the same time obtaining a fair market price.

Any property owner can choose to sell by public auction. This selling method is a solution that is particularly adapted to the needs of:

• sellers who want lots of advertising on the sale of their property; • sellers who require a selling price that the taxation authorities would find it hard to challenge ; • sellers who want to transfer a special or unusual property and thus has no real market.

An auction may be the perfect solution for people who are looking for a method of sales that enables a family dispute about the division of property to besettled or to decide between buyers with total impartiality.

An auction is the appropriate answer for those who, in addition to obtaining the market price, need the transparency of a public sale:

• local authorities who want to sell part of their private assets; • public bodies; • associations who put properties up for sale that originate from donations or bequests; • executors in their capacity as the representatives of inheritors.

An auction can also be held on the initiative of third parties who are legally vested with the right to undertake the sale and who require quality, security and transparency in their real estate transaction. This, for example, concerns sales of properties that are part of an estate without a claimant, sales ofproperties belonging to minors or adults who are wards of court or under guardianship, buildings that are the only assets of an estate and must be turned into cash, etc

The courts, moreover, can order an auction organized by notaries of property in one lot held indivisum (sale of property in indivisum), the auction of an attached estate, or of real property as part of collective proceedings (class action).

Irrespective of the sellers, all the conditions of the sale are establishedprior to the sale itself. Each sale is the responsibility of the sellers’ notary who draws up the specifications sheet in accordance with the regulations specific to this method of selling.

Important note

• Any owner may auction any type of real estate property. • Notaries’ auctions should not be confused with forced sales by order of the court.

Some history

Sale by auction is an undeniably modern selling method thanks to its effectiveness. Yet the way in which it is organized is very much inspired by the auctions of the Roman era.

In ancient Rome, the term auctio referred to all types of auction, sales conducted by individuals and those conducted by the State, both voluntary sales and forced sales. Various formalities surrounded them:

• They were preceded by advertising by means of posters or proclamations announcements made by the praeco, the town crier; • They caused a specification sheet or catalogue to be written, entitled the lex bonorum vedendorum; • They were conducted through a public official, the magister and intermediary public officials, the auctionatores; • The auctionatores were the auctioneers who conducted the auctions with the help of the town crier, the praeco, in the auction room which was called the atrium auctionarium.

An article in a previous version of the French Code of Civil Procedure, dating from the early 20th century even specified that auctions could be announced by ringing a bell and banging a drum.

The notaries of Châtelet in Paris have been auctioning property by the candle method since the 15th century. These are the public officials who are entitled to conduct property auctions.

Important to note

• Sale by auction is not a modern selling method. • It existed in the days of the Hebrews, Greeks and Romans.

Next Thursday I will be heading toward Nice to work with the contractor to begin the renovation and purchase appliances at my favorite store, Darty. Let’s hope that by then, the apartment will really be mine!

Stay tuned to my Niçois adventure…

A bientôt,

Adrian Leeds

Editor, French Property Insider
Email: [email protected]

 

 

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