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Bad Advice Can Cost an Arm and a Leg

A woman covered in a black veil sitting on a park bench in Paris

There’s an awful lot of bad advice out there, so please be careful. We recommend to our clients that they NOT crowd source information for a variety of reasons, but most of all, you need to consider the source.

Graphic of a thought bubble made up of multiple faces to depict crowd sourcing

If the source is not a professional with a lot of experience, then they likely don’t know what they’re talking about and just want to show off how smart they are (even though they aren’t). If they are professional, then again, be careful, because we see bad advice coming from people who really should know better, too.

Meme: No enemy is worse that bad advice...Sohpocles

For example, one such professional just posted a blog advising:

No, it is not essential to have a bank account in France before looking for a loan. Once you accept a loan offer, you will open at least one account with the selected bank so that the monthly loan repayments can be debited from it. Please note that even though you do not need to have an account in France before receiving a loan offer, you must make sure you can easily transfer your deposit into a French account.

Please note that even though you do not need to have an account in France before receiving a loan offer, you must make sure you can easily transfer your deposit into a French account.”

BAD ADVICE!

Let me give you the GOOD ADVICE: Yes, it’s right about one thing. You don’t want to open a bank account before applying for a loan, because the lending bank will want the account with them.

We once had a client open an account in a competitive bank and think it wise to send a large sum of money to the bank in preparation for the purchase. BAD IDEA. The lending bank saw all that money there and refused her the loan for that reason alone!

In addition, making a transfer from the French bank to the Notaire can be a nightmare because you will likely have to be present to approve the transaction. And most of our clients are not present in France. When you send a large sum of money into your French bank account, the bank authorities will raise their brows and want to know why you are receiving such a large sum (not that is a problem, because you have a good excuse, but why raise flags?) and the US authorities will want to see this on an FBAR report triggering other irregularities. In a nutshell, don’t do it!

A group of logos for French banks

The best way to transfer the money to the Notaire for the purchase is DIRECTLY from the source of the funds to the Notaire, using a CURRENCY BROKER, which can give you the best rate of exchange and help you time it to get the best rate as the rate fluctuates. You could save a lot of money with some planning. The Notaire will require that the bank verify that it came from the account of the person making the purchase, so that’s pretty easy with a letter or completed form from the sending bank.

Another so-called professional who has a Facebook group designed to suck-in people seeking to move to France, is well-known for giving bad advice. So much so, that another Facebook group was created just to counter its advice. One of our clients told us that in a book the “professional” has written suggests applying for a “Self employed person or liberal activity” visa.

That can be a good idea for some—those who want to develop a business in France—but seriously bad for others, especially retirees or those who are already employed by a U.S. or Canadian company or are self-employed and can work remotely.

This is because (taken from the official website):

If you want to set up a new business, you must be able to demonstrate the economic viability of your project. If you want to work in a liberal profession or in an activity that has already been created, you must be able to prove that you have sufficient financial resources i.e. the equivalent of the minimum legal wage in France for a full-time worker. The required supporting documents related to your personal and professional situation are indicated in the visa wizard.

Important: If your company’s activity or the liberal profession you are engaged in is subject to specific regulations, you must meet the requirements in terms of qualifications/diplomas as well as any other conditions.

What that means in real terms is if you DON’T earn enough money to satisfy the authorities, you risk your visa not getting renewed!! And this happens often, since so many business ideas turn to dust. In the US, it’s standard to think that a business is profitable within two to three years. If after two years, you can’t show the authorities you’ve earned enough money, they may not renew your visa. I’ve known a few people who were given this advice and it backfired. So, be careful! (We told our client to throw the book in the trash!)

When I was first starting out, I was given bad advice that cost me a lot of time, money and anxiety. Some of it came from an American attorney in France who charged me an arm and a leg for that bad advice, then it cost me another arm and leg to fix it. I trusted him and that was a mistake. In addition, I had bad advice from a French Expert Comptable (CPA) who really should have known better. While I liked his out-of-the-box thinking, I later learned the hard way that it was TOO out-of-the-box and that cost me another arm and a leg.

As a result, we are very, very careful that a) we give the best advice we can give and b) so do our resources, as we back them up. Our reputation depends on it.

Meme: Good advice come from bad life experiences

We find that a lot of people give out advice who haven’t actually “lived” what they are advising—they base it on what they’ve read or heard, but not on actual experience. In 22 years of working in French real estate and advising clients moving to France, I’ve seen it all (or at least mostly everything!) and experienced a lot myself personally, along with working with thousands of clients to help them rent or purchase a property…so we really understand how to maneuver and manage the system to one’s advantage.

So, don’t crowd source. Don’t depend on non-professionals to give professional advice. Pay a professional that comes highly recommended so you can trust you’re getting the best advice possible. It’s simply too important to do it right the first time around.

Trust me. I KNOW all too well!

Happy Labor Day! (in France)

A la prochaine…

Adrian Leeds from 2015Adrian Leeds
The Adrian Leeds Group®

P.S. Want the best advice? It all starts with a consultation with myself or one of my trusted staff. Visit our website for more information and to schedule your consultation!

Fabien Pelissier, President of Fab French InsuranceP.P.S. We had a captive audience last night for our webinar, “French Insurance Made Sexy!” with Fabien Pelissier of Fab Insurance. If you missed it, don’t despair! You can easily watch it in its entirety on our YouTube channel and pass it on to your friends.

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