Volume I, Issue 27
When we first looked at the apartment on rue de la Huchette to buy it as another International Living rental property, we remarked what good condition it was in and how it wouldn’t require much work to get it ready for our tenants.
August 7th we signed on the Acte de Vente, walked away with the keys and proceeded to prepare the apartment for occupancy. I called EDF/GDF (utility company) to have the service put in our name, I called France Telecom to have a phone line installed, and I scheduled a meeting with a contractor I have worked with many times who can paint the apartment and make all the necessary repairs.
The apartment looked very different without the furniture and once we started to have a more detailed look, we realized that it needs a lot more work than we originally thought! All the electrical outlets need repair, phone jacks added, switches need to be placed in more practical spots, lighting needs to be installed, tiles need to be replaced and regroutted, plumbing fixtures need replacing, windows need repairing, the front door lock needs to be changed…and the list goes on to the tune of an estimate of about 15,000 euro, including, of course, the walls repaired and painted and two mezzanines added for extra sleeping space. This does not include the expense to furnish it fully.
When all is said and done, about a month of work, the apartment will be splendid — located a stone’s throw from Notre Dame and Shakespeare and Company in the Quartier Latin, it has ceilings almost four meters high, 18th-century wood beams (needing treatment for worms), floor-to-ceiling windows with brocade drapery (needing cleaning) missing the cross bars and some handles (to be replaced), more shelving and closets than it needs (much to be removed) and original hexagonal terra-cotta tile floors (needing cleaning and varnishing).
Of course, I should have been prepared…the work is ALWAYS more than you expect. Every time I’ve had work done on my apartment, it’s been twice what I originally expected in time and money…because there are always surprises!
And that’s the moral of the story…if you’re going to buy property in France, likely something 100 years old or more, expect the problems to be more than skin deep and allow for enough budget to get it to the standard you want to live in.
Editor, French Property Insider
Email: [email protected]
P.S. If you have basic questions concerning apartment and home renovation, contact our resident expert Derek Bush by visiting https://adrianleeds.com/wp-content/uploads/newsletters/frenchproperty/insider/services.html
Volume I, Issue 27, August 14, 2003
In this issue:
* Be Sure You’re Buying the “Pig” with the “Poke”
* Getting a Mortgage in France is Easy
* News on the Conference Front…Schuyler’s Back
* Lowest Calling Rates to France We’ve Found
* They Thought They Bought, But They Lost
* Hot Property Pick: A Cottage Near Montpellier
* More Properties: An Income-Producing Studio, a Duplex on the Left Bank and a House in the South
* General FPI Information…
CIARAN, STOP HERE FOR THE HOME PAGE AND BE SURE TO DELETE THIS TEXT!
COPROPRIÉTÉ: KNOW WHAT YOU ARE BUYING
By Laurence Raybois
Lets say you are about to become the proud owner of a French home or apartment in a “copropriété,” typically an entity in which the homeowner privately owns a dwelling but jointly co-owns some of the copropriétés amenities (elevator, staircase, courtyard, etc.) You may be assuming that the distinction between private ownership and co-ownership is clear, but it is not always so, and before you proceed with the purchase you have some work to do to clarify just what you will own.
UNDERSTAND WHAT YOU ARE BUYING
The seller may be trying to convince you that a charming little courtyard adjacent to his apartment is included in your purchase, either because it is, indeed, his private property, or because he was granted exclusive use of this co-owned courtyard. But unless the official documents of the homeowner’s association explicitly say so, you should believe otherwise.
A possible scenario is that this person found himself to be the only one using this (co-owned) courtyard, due to the proximity of his apartment. After an initial (short) period during which he could not believe his good luck, he started behaving as if he really was the courtyards rightful owner.
TO RUN OR NOT TO RUN, THAT IS THE QUESTION
The unauthorized, and therefore illegal appropriation of co-owned property by one of the co-owners in a copropriété is surprisingly common, with some people taking the appropriation so far as to undertake a remodeling project on it. This often starts with the co-owners interest in purchasing a few square meters of the co-owned property so that he can have a bigger room or add to his outdoor terrace. Only when he becomes aware of the number of hoops he must jump throughand financeand aware of the fact that his fellow co-owners have just hiked up the price (as is often done) does he give in to the temptation of doing things surreptitiously.
From the buyers perspective, purchasing (and paying for) any property that was not the sellers to sell in the first place is annoying enough. Doing so with a piece of property that was remodeled is a potential nightmare, since the homeowner’s association has every right to demand that the premises be restored to their original condition by the current owner of the implicated home or apartment. In practice, new owners do not usually find themselves in this predicament, since notaires screen purchase documents for these inconsistencies. As a prospective buyer you can help uncover such a situation by carefully reading the portion of the association’s official documents that describe the property you are considering buying.
Should you ever find yourself about to buy into a copropriété where ownership of part of the purchase is questionable, you may choose one of the following options:
a. Run away from the deal.
b. Request from the homeowner’s association the official acceptance of the appropriation and the changes made to the premises.
The drawback of the second option is that it could subst
antially delay your acquisition of the dwelling, since this matter must be discussed and brought to a vote at the next meeting of the homeowner’s association. Homeowners must be notified at least fifteen days prior to the meeting. And, there must be a waiting period of two months during which those who oppose the proposal or were not present at the meeting can be heard. In other words, this process is not for those who are in a hurry.
In addition, there is no guarantee. The homeowner’s association may well decide that the courtyard is jointly owned and should be enjoyed by all. However, this outcome may give you an opening for a price reduction negotiation. That is, if you have not already chosen option a.and run away from the deal.
Editor’s Note: Laurence Raybois is the author of “Chez Moi: The Foreigners Guide to Buying a Home in France.” She was raised in Provence and moved to the U.S. at 21. For many years she worked in American politics, researching issues for various non-profit and special interest groups, and for initiative and referendum campaigns. She is currently consulting on administrative and practical issues with foreigners owning, or wishing to own, real estate in France. Her book can be purchased by visiting: https://adrianleeds.com/wp-content/uploads/newsletters/parlerparis/books/property.html
GETTING A MORTGAGE TO BUY PROPERTY IN FRANCE
By Schuyler Hoffman
Unless you have the funds to pay cash for property you want to buy in France, you will most likely be considering a loan to make the purchase. The good news is that obtaining a mortgage here is very do-able. Your have a few options, including going to a French bank or a British bank doing business in France.
Going directly to a French bank as a non-resident can be a bit dicey. Unless you have a regular salary going into a French account, they tend not to be as interested in dealing with foreign clients. But, this is not always the case… in France there are always exceptions. Crédit Agricole is one that has become aggressive seeking these clients, however, we have found, that French banks do not generally offer as good a loan package as do their British counterparts.
We have experience working with several such lenders, two in particular: Abbey National (British owned) and Banque Patriomine & Immoblier (BPI, formerly British owned Banque Woolwich SA, now owned by Groupe Crédit Immobilier de France). Both institutions have departments set-up especially to work with foreign clients. I should add, with the slowdown in business as a result of recent world events, they are hot after foreign clients — especially Americans.
The paperwork and requirements to obtain a mortgage are fairly similar between the two lenders. You will fill out a multi-page application, plus an insurance questionnaire (a verified physical exam may also be required). Each institution may also have its own special forms to be completed as well.
Beyond that, the banks have their bottom line: will you, the borrower, be able to pay back your loan? The starting point to determine this is your income. If the monthly amount of the mortgage will be no more than one-third of your monthly income, you have passed the first hurdle. Put another way, if you take your gross monthly income, deduct any existing mortgages, rent, or loan payments, then take one-third of that, you’ll have an idea of what you will probably be able to afford as a French mortgage. If the property you’re purchasing will be rented and income producing, then this income can also be considered.
It is rarely that simple a process. Every one’s situation is different. The lenders realize this and can be quite flexible in assessing a potential borrower’s application. For example… A recent client came to us for assistance on obtaining a mortgage for an apartment she bought in Paris. She is a self-employed and owns some income-producing properties in the States. Via an accountant, she had to verify the income from her business and the rentals, and provide copies of the leases on the rental properties. As an older woman, she was also required to have a physical to establish her good health.
The huge packet of documentation she sent us to accompany her loan application was a French lenders dream come true… they love that paperwork. A series of communications back and forth followed the submission of the packets to the two banks, and within a month’s time, each bank made a loan offer to our client.
What we like most about these lenders is their creative financing packages. You can obtain a mortgage for 10, 15, or 20 years (up to 75 years of age, so if you’re now 65, you can only expect to get a 10 year loan).
The rates offered are both variable or fixed. If you choose a variable rate, considerably lower than the fixed rate, you are guaranteed the offered rate for a period of time (each lender has different rules) and you can then fix the rate at any time with no penalties. If the rate increases, the monthly payment doesn’t increase, but the term of the loan does. If the rate decreases, the payment doesn’t decrease, but the term does. So, you never have to worry month to month.
Life insurance is mandatory in France tied to the mortgage, so your monthly payment will include this premium. There is a 1% fee to process the loan assessed by the lender.
Depending on the length of the loan and the amount you borrow, your interest rate can be as low as 3.35%. Even outside those parameters, the high end of the scale is 5.5%.
Editor’s Note: If you are interested in learning more about the current rates or contacting these lenders to apply for a pre-approval or a mortgage, please write us directly at [email protected]
*** BREAKING NEWS…
Past editor of French Property Insider and Assistant Director of the International Living Paris office, Schuyler Hoffman, will be back in town specifially to co-host the Working and Living in France Conference October 24 – 27 and speak on the best ways to find your dream home! For more information, visit https://adrianleeds.com/wp-content/uploads/newsletters/parlerparis/liveinfrance/index.html
NEW LOW INTERNATIONAL CALLING RATES ON BIG ZOO
Big Zoo just lowered its rates from the U.S. to France to 2.9 cents per minute if you you call their local access number first. It is 3.9 cents per minute if you use their 800 number to access their service.
There is a $10 one-time sign-up fee.
Downside: They do not have access from France to the U.S.!
QUESTION FROM A READER: BUYER BEWARE OF NON-EXCLUSIVE AGENCY LISTING
We have just gone through the process of TRYING to buy our dream home in Provence. I say “trying” because we have found a
very “sympa” and professional realtor with a national real estate chain who showed us our dream property that was listed with his colleague in the next town. Our offer was full price and the only negotiating was in the “frais de negociant” (which was originally 7.3%) customarily paid by the buyer in France.
Back in the U.S. and after more than a month of making the offer, analyzing the “Compromis de Vente” (which was in French!) and indulging all our fantasies of retiring to live our dream, it turns out the agency did not have an exclusive listing. The owners are selling to local people whom they appeared to have an existing agreement with.
I have noticed that the practice of taking an open listing is very common in western Europe. As a Florida real estate broker I find this almost incredible – why would any realtor spend his time and money on an open listing?
How does an out-of-country buyer identify and buy a property when one is usually out of necessity forced to deal with a realtor? While the “compromis” affords certain protections to the buyer, buyers have no representation and, it would appear in the usual absence of comps, etc., no firm ground from which to negotiate other than the usual one of convincing the seller that you are a genuine buyer who can close the sale. Sellers, on the other hand, have the upper hand and treat both prospective buyers and realtors as inconsequential.
As we continue our search, my first question to any realtor will be “do you have the exclusive listing?” Perhaps I can begin some kind of groundswell (if I ask enough realtors!) and the profession will begin to move in the direction of exclusives.
FPI Reader, Angela D.
Last October, our International Living Paris Office had a similar experience with an apartment in Paris that was within one hour of being sold to our client with the signing of the “Promesse de Vente” only to learn that the owner sold the property to “friends” who offered more than our client, cutting out the agency and disappointing our buyer. We were equally shocked as you.
First, when purchasing property in France, do not assume that the system we know in the U.S. is employed here as well. It’s not. Agencies can ask for exclusive listings, but a seller has the right to list his property with many agencies or to sell it outright himself as he wishes. The agency must take its chances that they can sell the property first, or they risk having no listings at all.
And remember that while agents can be friendly, pleasant and helpful, they work for just one person: themselves. Their primary interest is the commission they will earn, so a good rule of thumb is to place very little trust in them. A Notaire makes a much better ally.
Until the Compromis de Vente or the Promesse de Vente is signed and witnessed by a Notaire, you have absolutely no guarantees that the property will be yours. And when it is signed, there is a 7-day buyer’s remorse law that requires it be resigned to insure your intent.
From your letter, it seems you took it home to read, and you had it in your possession over a month! What you label a “Compromis” may have only been an agent’s contract with no legal bindings.
Property sells so quickly at this time, that even a few days could change the equation. The moment the seller agrees to a price and conditions, verbally or in writing, a date should be set immediately with a Notaire to legally finalize your intention to purchase the property in the form of a “Promesse de Vente.” The “Acte de Vente,” or final sale will then take place within the next 90 days.
Being an “out-of-country” buyer immediately makes you suspicious to a seller intent on a sure sale with little or no contingencies. If you cannot be here yourself to complete the transactions, someone can easily represent you with the Power of Attorney to sign on the initial documents. Nonetheless, our advice is to be an IN-THE-COUNTRY buyer, devoting one or two weeks to overseeing the process from beginning to end so there is no confusion or disappointment.
P.S. The only difference between a “Compromis” and a “Promesse” is that the first is a term used primarily in the provinces, while the later is used in Paris!
TODAY’S CURRENCY UPDATE
A service of http://www.xe.com
Subscribe for free at: http://www.xe.com/cus/
Rates as of 2003.08.14 08:31:37 GMT.
1 U.S. dollar equals euro 0.882822 (0.882963 euro last week)
1 euro equals U.S. dollar 1.13273 (1.13255 last week)
PARLER PARIS APRES MIDI MEETS TWICE A MONTH
Please note no meeting August 26th!
NEXT MEETING: September 9, 2003, 3 p.m. to 5 p.m.
AND EVERY SECOND AND FOURTH TUESDAY OF THE MONTH
This is your opportunity to meet twice a month, often with local professionals who can answer your Working and Living in France questions. You are invited to come for drinks and share your questions and comments about what it takes to create a life here, own property and enjoy what France has to offer. It is also an opportunity to network with other Parler Paris readers.
For a detail description of this past week’s meeting and for more information about Parler Paris Après Midi, visit
FOR SALE: FPI HOT PROPERTY OF THE WEEK
We are constantly looking at properties for sale to offer to our subscribers only. Each week we will be bringing you one or two properties we believe are especially worth your consideration. As a subscriber, you will have an exclusive first look at these before they are added to the listings on our website.
— CAROLE: ONE-LEVEL HOUSE IN VENDARGUES, NEAR MONTPELLIER –
Small house of 102 square meters in a quiet cul-de-sac, attached by the garage, in a nice big village about 10 kms from Montpellier. All amenities and transportation to the city. Built in 1988 on 505 square meters of land with a fence all around and terrace. A garage parks one car + space for addition in back with an electric door. Three bedrooms, one with a mezzanine, bath with tub and shower, all equipped kitchen open onto the dining room with a fireplace. Double-paned electric rolling shutters, lots of closets, parquet and tile flooring, garden ready for planting.
Asking Price: 275,000 Euro
Photos available at: https://adrianleeds.com/wp-content/uploads/newsletters/frenchproperty/insider/
Serious inquiries can be directed to Email: [email protected]?subject=Carole
FPI PROPERTY LISTINGS
The International Living Paris Office is not a real estate agency. We do not maintain a list of available properties. These listings are meant to provide readers with examples of what is on the market. They are generally selected for their relevance to articles appearing in the current issue of FPI.
— PUJOL: SOUTH OF FRANCE
Very charming typical provençal house in a sought-after village located 20 kms North of Montpellier and 30 kms from Nîmes on RN 110, with all amenities (school, supermarket, tobacco/magazine shop, open air market) and restaurant/pizzeria. Beautiful quiet wooded environment near the village castle. Two level house with just a landing, storage and a bedroom upstairs. Recently painted and stucco cleaned.
Building Date: 1978 – Renovated (additions) in 1991 and 2001
Land Surface: 1800 m2
Swimming pool: Yes (10m x 4,5m) painted concrete (repainted in 2002)
Fenced: All around
House Surface: 140 m2
Number of rooms: 6
Bedrooms: 4 (3 on ground floor – Master bedroom with dressing) and 1 upstairs
Bathrooms: 2 (showers – one small and one large with room for bathtub)
Kitchen: Equipped, brand new (2002)
Fireplace: Yes (wood)
Garage: Yes – detached – single + 2 carports
Sewer system: Central – city
Heat: Electric (city gas on property line – Connection possible)
Windows: Partly double-paned
Shutters: Wood (painted) except in addition: roll-up
Asking Price: 460,000 Euros
Write for photos and for information. Serious inquiries can be directed to email: [email protected]?subject=Pujol
— FLORENTIN: A RENOVATED INCOME-PRODUCING STUDIO IN THE HISTORIC
There’s a superb studio, of 20 square meters, available now
in the Marais, Paris, just a short walk from The Maison de Victor Hugo, the amazing Place des Vosges built in the 16th
century; Hôtel Carnavalet (the historical museum of Paris);
the Picasso museum, Centre Pompidou, Les Halles shopping area, and Notre Dame de Paris. It’s right in the center of one of the interesting and vital parts of the City of
Price: 175,000 euro
Photos available at
Serious inquiries can be directed to email: [email protected]?subject=Florentin
— DUPLEX ON THE LEFT BANK
Paris Left Bank — 13th arrondissement bordering the 5th, duplex on the 3rd and last floor plus a loft, total 87 m2 with 71m2 Loi Carrez (above 1.8m2). Quiet, sunny, lots of character (wood beams, traditional staircase) with stairs from living room to loft. Main bedroom downstairs overlooking east courtyard and living room overlooking rue Pascal. Two rooms upstairs, living room 27m2, toilet/shower/bath separate, equipped kitchen, storage room, cellar, double glazed windows and pine wooden floors. Rental history 1850 euro per month.
Price: 445,000 euro
Call for private sale: +33 (0) 6.74.98.08.27 or Email: [email protected]?subject=Duplex_on_the_Left_Bank
FPI CONSULTATION SERVICES
We’re equipped to assist you with every aspect of buying an apartment. We can create a package for as much or as little assistance as you need. From merely locating an apartment to helping you set up utilities or do a renovation, we can help.
Full details are posted on the French Property Insider website at https://adrianleeds.com/wp-content/uploads/newsletters/frenchproperty/insider/propertyconsultation.html
INSIDER PARIS GUIDES DISCOUNT FOR FPI SUBSCRIBERS
Insider Paris Guides
Don’t forget that with your FPI subscription you are entitled to a discount on the purchase of any Insider Paris Guides. You’ll find details of the guides at http://www.insiderparisguides.com. When ordering, a box will pop up allowing you to enter the following username/password
Order more than one guide at a time and you will receive an additional discount!
Username: propertyinsider Password: liveinfrance
“DR. DEREK’S” ARCHITECT’S ADVICE AND SERVICES
If you have basic questions concerning apartment and home renovation, contact our resident expert Derek Bush by visiting https://adrianleeds.com/wp-content/uploads/newsletters/frenchproperty/insider/services.html
RENTING AN APARTMENT IN PARIS OR HAVE AN APARTMENT TO RENT?
If you are seeking to rent a furnished apartment for a week, a month or a year or you have an apartment you wish to rent, there are a couple of ways we can be of assistance. Click here for more information: https://adrianleeds.com/wp-content/uploads/newsletters/frenchproperty/insider/forrent.html
THINGS YOU NEED TO KNOW
– FPI Website: To access any password protected pages, the username is: fpiuser and the password is: paris1802. If your computer utilizes cookies, once you log into a subscriber only section, the login information will remain active for seven days, after which you will have to login again.
– Past issues of FPI are available on the website. You will find the “Past Issues” link on the left under “Subscribers Only” or by going to https://adrianleeds.com/wp-content/uploads/newsletters/frenchproperty/insider/subscribersonly/archives.cfm
– Instructions for upcoming conference calls are on the FPI website. You’ll find the link under the “Subscribers Only” section on the left of any page.
– Get In On The Discussion: Care to weigh-in on current HOT topics of discussion on France? Get in on or start your own thread on our bulletin board at http://www.agora-inc.com/forums/index.cfm?cfapp=15
Stay in your own 17th-century pied-à-terre in the heart of Saint-Germain-des-Prés, Paris, by the week or month. Sleeps 4. Newly furnished and redecorated. Totally charming. From $150 per night. Visit https://adrianleeds.com/wp-content/uploads/newsletters/frenchproperty/insider/rentals/mazarine.html or contact Rendez-Vous à Paris at [email protected]?subject=IL_Reader or call +33 (0) 22.214.171.124.
Guest Room or Two-Bedroom Apartment…
Located in a 17th century Le Marais Hôtel Particulier, this 70 square meter apartment two-bedroom apartment with lots of light is nicely furnished and is perfect for a single woman in the freshly renovated guest room when owner Adrian Leeds is in or for up to 4 people when she’s traveling.
The Guest Room is offered at $575 per week ($250 deposit required). The Entire Apartment is offered at $875 per week ($350 deposit required). References are mandatory. Pictures and more details available here: https://adrianleeds.com/wp-content/uploads/newsletters/parlerparis/apartments/rentals/leeds.html
For information and reservations contact: Adrian[email protected]?subject=ABLGuestRoom
For the latest listing of vacation rentals, click here:
SEEKING A MORTGAGE IN FRANCE?
The International Living Paris Office can help you secure a mortgage in France with interest rates as low as 3.35%.
Contact [email protected]?subject=Mortgage for more information.
HELPFUL CONVERSIONS FOR REAL ESTATE
To convert square meters to square feet, multiply 10.763 by 3.281 and for more conversions, refer to:
SUBSCRIBE TO PARLER PARIS
If you’re not a regular reader of the Parler Paris weekly e-letter, and would like to be, simply enter your e-mail address here (it’s free!): http://www.internationalliving.com/signup.cfm
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Copyright 2003, Agora Ireland Publishing & Services Ltd.