Real Estate Agent’s Tricks
You just need to take a drive around any part of the French Riviera and it becomes very clear that there are too many real estate agencies here. There’s at least one on every commercial block, if not several. It’s easier to find a real estate agency than a place to buy coffee — by far.
Not surprisingly, real estate agents on the French Riviera are an extremely competitive bunch. There are thousands of agents all fighting over a comparatively small number of listings, scraping by trying to pay their rent on very few sales. In short, it’s a recipe for all sorts of bad behavior.
Much like any industry where the monetary incentives are not aligned with the incentive of being honest with the buyer, this type of system forces agents to either look out for their own financial interests OR be honest with buyers. It’s not surprising then, that they prioritize making more money above being transparent with buyers. It’s not that agents are bad people (they have families to feed, too); the problem lies in the fact that the system is set up in a way that incentivizes bad behavior. The more you overpay, the more profit they make.
How Real Estate Agents Operate
No single agent has access to everything on the market. Not even close.
In France, there’s no MLS or central database of all the properties that are for sale. Each agency has their own listings. They publish some of their listings online (the ones they’re having a hard time selling), and the rest they keep secret (these are called ‘off-market’) so that other agents can’t find out about them.
Most owners (the savvy ones) list with 2 or 3 agencies. Agencies often don’t like to work with each other because it means splitting commission. This is why, as a buyer, you’ll need to contact (and work directly with) as many agencies as possible. Many agents on the French Riviera won’t proactively follow up with new listings, so you’ll need to message them regularly to remind them that you exist.
Licenses & Insurance
Since there are many illegal 'real estate agents' trying to make money off French Riviera property, it’s very important that you make sure any agent you’re working closely with is legal by asking for three things: their license to practice (carte professionelle), indemnity insurance, and fidelity bond (piece de garantie) details.
Don’t worry – it’s perfectly normal and acceptable to ask for proof of these. This will help to protect you in case something goes wrong. If they don’t have a bond, that’s ok, just make sure you pay any money to the notaire (which you should really do anyway). Licensed agents must display all these details in their office and give details of these three things in all correspondence and contracts.
Beware Foreign & Illegal ‘Agents’
Only work with agents that have an office in the area where you're looking for a villa. Local agents will know the area best and might be able to give you access to ‘off-market’ villas that they think they can sell quickly without needing to pay for publicity. They will also be more likely to be legally licensed to practice — and you definitely want to make sure the agent you’re working with is licensed and insured.
Some foreign or unlicensed agents will claim to be the ‘listing agent’ or ‘exclusive agent’, but actually aren’t, and might surprise you with a demand for extra fees in the end (which you are not under obligation to pay!) or hide fees in the listed price. For this reason, avoid global / UK / non-local agents and services, and don’t sign anything with an agent — all contracts should be done via the notaire. And certainly don’t ever give an agent money (again, only give money to the notaire).
Buyer’s Agents / Property Finders
What is a buyer agent?
Buyer’s agents (also called Property Finders) are a new thing in France (since roughly the year 2000). They advertise that they will do the work of contacting all the various real estate agencies and find out about the off-market villas. Some also say they’ll do their best to find out about private sales.
Since they all split the commission with the listing agent, they will all miss out on properties where the listing agent doesn't want to split the commission. Many agencies, especially the well-known ones, refuse to split commissions (unless the villas has been on the market for ages). This means that unless you are directly in contact with those agencies, you might not find out about the best villas they have for sale.
Regular agents posing as buyer agents:
An agent who works for an agency that lists villas for sale can not also be a true buyer’s agent, although some will try to convince you they can. Regular agents will not be able to find out about other agencies ‘off-market’ villas (since the whole reason they’re kept off-market/secret is to avoid having other listing agents find out about & steal them), and will try to get you to pay as much as possible (since they make commission-based compensation).
Local versus international:
The more local they are, the better. There’s no way someone in the UK can know about private sales on the French Riviera — that takes weekly in-person relationship-building and meetings with locals. Find a buyer’s agent who is based near where you want to buy, and speaks French as their first-language, so that even xenophobic old locals will be friendly and let them know about private sales.
Some buyer’s agents charge the buyer an additional fee upon the finalizing of the sale (but they also take half the commission from the listing agent — which they may or may not admit to you), but most don’t charge the buyer anything and instead just split the commission with agents that are willing to do that (not all are!)
Some sleazy buyer’s agents will ask for a retainer (money up-front), mostly because they’re chronically unsuccessful in finding villas and their only income is these initial payments. Never pay in advance. In fact, never pay them at all. Let them get paid from the listing agent / seller. If you do agree to pay them a few thousand euros extra, you should only ever pay a buyer’s agent if they find you a villa that you purchase — and only when the purchase is 100% complete.
Can you trust them?
It’s the same as with listing agents. Since they’re paid a commission based on the sale price, they’ll be incentivized to find a way to manipulate you into paying more than you need to. That’s why you can't listen to their advice and it’s still up to you to do your own research to determine the correct offer price.
If they ask for a contract, you can simply say that you don't want to sign a contract at all, or at least until you’ve found the villa you want to buy. If they protest, don’t give in. They will eventually agree to still work with you. If you decide to sign a contract at some point (this should really only happen once they find a villa you want to buy), then there are things to know before you sign:
- Make sure the contract is ‘simple’ and not ‘exclusive’. Make 100% sure that the contract does not have anything about exclusivity in it, otherwise you’ll owe them money even if they are completely unhelpful (which many are) and you find a villa another way.
- Ask for proof that they’re licensed and insured.
- Make sure you understand everything in the contract. Most will provide English-language contracts.
- The contract should say that you don’t owe them any money, or that the buyer’s agent gets paid only when the sale is complete. It should state that they will share the commission with the listing agent, paid by the seller, and that the buyer agent will not charge the buyer any fee.
Who to Trust? A Warning
The main thing to always remember is that real estate agents (and notaires) get paid when you complete the purchase, and the more you spend, the more profit they make. They are paid a percentage of the sale price, and they only get paid if you complete the purchase for the villa. So, naturally, they are incentivized to be very optimistic about both the market and whatever villa you’re considering.
That’s why many will tell potential buyers that a villa with major mold and structural issues is “in perfect condition”, or deliberately inflate the m2, or tell you other lies and half-truths to get you to buy at the highest price possible.
Given this, it’s important that you do your own checking to see if all the structures on the property were built legally, and to check the other things listed in this guide. Don’t expect agents to be honest about any aspect of the property — you are the only person who will look out for your interests. It’s up to you to hire independent experts (who get paid whether you buy the villa or not) to double-check everything.
Those who are in the business of promoting villa rentals will also encourage people to buy. If you buy a villa then realize you overpaid and can’t resell it, that’s good news for people who make a living organizing villa vacation rentals, as your next step will likely be to enlist them to help you rent it. (Keep in mind that these rental brokers charge 20% commission, and the government charges a 40% rental tax, so you’ll make less than half of the rental price).
(Dishonest) Things Agents Tell You
Given the misaligned incentives, always do your own research, and watch out for these things that some agents say:
“The market is super hot right now!”
Agencies always want you to believe that it’s a super-hot market and prices are going up, as this pressures buyers into feeling like they should buy sooner and for more money, and it incentivizes sellers to list their homes. Even in obviously soft or declining markets, many agents and notaires will often tell you that it’s a hot market. Here’s the actual state of the real estate market on the French Riviera.
“This villa is new to market!”
Emails with real estate listings often say “new listing” or “new to market” when the villa has already been listed for sale for many months or years. Don’t pay attention when the agent says it’s ‘new’. Instead, take a look at the date on the diagnostics.
“You can’t base your m2 pricing on the notaire’s website (‘DVF’) because _____.”
They may give any number of lies for this, such as that the notaries don’t count villas purchased using a SCI (they do — they count all residential real estate transactions no matter who pays for them), that they include non-publicly offered or inter-family sales of property for a low price (they don’t), or that the notaire’s published sale prices are somehow incorrectly low (they’re definitely not incorrectly low –in fact they’re incorrectly high!– and this is regulated by French law to increase transparency.) Here’s a guide to coming up with your offer price.
“The market has exploded / prices have gone up since the notaires last published the sale prices…”
Again, that is 100% certainly not true, as the French Riviera’s real estate market is like molasses — it’s very slow-moving. Besides that, their claim is also completely unverifiable and there’s no way an agent could know this. The only way to know the trends of the real estate market prices is via the notaires published sale prices (more on the market trends here). Agents are famous for lying about sale prices, and even if they were being honest, they would only know about their sales, and they are 1 out of over 1500 agents on the French Riviera!
“This villa is on an expensive street, so the price is justified.” or “The house down the street sold for €_____.” or “I recently sold several villas in this area for over €_____.”
First, you can verify if it is by searching the past sales, which are listed on this notaire (‘DVF’) website — but with incorrectly low m2). If those sales aren’t listed, then assume that it’s probably not true. Second, the price per m2 should still be within the notaire’s published price range (more on this here), which includes every villa on every street in that area/town, including all the ‘special’ expensive streets. Thirdly, just because one buyer didn’t do their research and overpaid, doesn’t mean you should.
“That villa has just been sold!”
Another thing to be aware of is that some agents refuse to work with other agents (for various reasons), resulting in the agent you’re working with telling you a property has sold when it hasn’t, so make sure to double-check with the listing agent. Also, many deals fall through — a property with an offer on it is far from a done deal (in fact, more than 50% of offers fall through, mostly because the bank won’t underwrite the mortgage for an obviously overpriced offer) and the villa may end up back on the market within a month.
Also, if you are an educated buyer and know that a villa is overpriced, an agent might tell you a villa got an offer to get you to bid above market, and when you don’t, they might say it sold. But this is often simply because they know that the seller is just speculating and not interested in selling at a fair price, so saying it sold is intended to make you think you’re wrong about the market (that villas are selling for more, and more often, than they are).
Another reason why an agent might say this is when an owner decides to take their villa off the market because it’s not selling — agents won’t say this, obviously, so instead they pretend they sold it. Check the notaires published sales to verify.
“They already turned down an offer for [insert above-market price here].”
This is almost always not true. This is a very common tactic used by agents to make you think the villa is in demand, and to get you to offer more than market value. If the number is very high, they may also be trying to scare you off because the listing agent won’t share the commission, or because they know that the seller doesn’t really want to sell.
“The villa already sold but the buyer couldn’t get a mortgage.”
This may or may not be true. If it’s true, the most likely reason they couldn’t get a mortgage was because the bank’s valuation / appraisal showed that the buyer’s offer was way above market value. So, if it’s true, that almost certainly means that the villa is very overpriced, even at the offer price that was accepted. If it’s not true, then the agent is saying this to manipulate you into thinking that it’s a desirable villa that other people are willing to pay for.
“They are considering an offer, so you’ll need to act quickly!”
This is not true most of the time (but once in a while it is, however, the offer amount they tell you is almost always much higher than the actual offer). This is a common tactic used to put pressure on you, to make the villa seem like it’s desirable, and to get you to quickly bid a higher amount than their (fictional) ‘offer amount’. Our advice: offer market value then wait and see.
“It’s an investment – you’ll make the money back when you sell…”
This is simply not true anywhere, but especially in France, where the market has been flat-lined for about 15 years. Buyers have no idea what you paid for your villa, and even if they did, it wouldn’t matter, as villas will sell for whatever the market value is at that time. Real estate is like any other market: it has ups and downs, and people lose money on their ‘investment’ all the time.
“It’s priced at market value. You can see by searching for villas for sale in the area.”
Agents who say this are trying to confuse you. The asking / listing / for sale prices are NOT ‘market value’; they are the prices nobody is willing to pay (otherwise, those villas would already be sold!) Instead, it is the SOLD prices (the m2 prices that villas have actually sold for) that determine the ‘market value’ (what villas in that town are worth).
How To Answer ‘What’s Your Budget?’
Since so many properties are dramatically overpriced, the best way to answer this question is to say this: “We don’t have a budget. We will pay market value. We will get two appraisals –including one by our bank– and will base our offer on those. So show us everything that matches what we’re looking for and we’ll deal with the offer price once we find one we like.” Then, you will craft your offer by following this guide.
Do You Need an Agent?
You may find this shocking, but only about half of all villa sales are via real estate agents, and many of those are sold ‘off-market’ to their clients (or developers, which then give the agent another commission when they flip it) without the need to publish the listing online.
The rest are via auctions, directly via notaires, or through private sales via local newspapers, social media, classified sites, or specialty property press (listed by the owner). This is because real estate agents charge between 4% and 10%, and many owners would prefer to try selling another way, only dealing with agents if they can’t find a buyer on their own.
Once an agent gets hold of a property, they’ll first try to “off-market” offer it to developers. Then they’ll quietly offer it to their clients and other agents they have partnerships with. If none of them can find an interested buyer, that’s when they start paying to advertise it.
They hold off on making the listing public for as long as possible because publicly advertising it invites competition from other agencies (other agents find it on Google Earth and approach the seller, so they’ll make the commission if they sell it). So usually if a villa hasn’t sold by the time is publicly advertised, it’s because it’s overpriced or has issues.
For these reasons, it’s best to look for villas on your own, and also contact as many agents as possible, so you’re more likely to get told about the “off-market” properties.
Buying a villa? Make sure to read all of our guides!
Our guide to where the market is headed includes: French Riviera real estate market predictions, current & historic pricing trends in the market, and the reasons why prices will continue to fall. Plus, supplementary guide to Russians & their impact on the French Riviera real estate market.
Our guide to real estate listings includes: how to find villas for sale, what to look out for, misinformation and warnings, auctions & foreclosures, buying direct from sellers, why timing is everything, and the reason why only about half of villa sales are publicly listed.
Our guide to scams and secrets includes: warnings about the unethical tricks that agents, notaires, sellers, developers and builders use to get more money out of you. This is a must-read, and the whistleblower guide that those in the business don’t want you to see.
Our guide to pricing & determining a villa’s market value includes: why there’s so much extreme overpricing, how to estimate a villa’s market value (what it’s worth), and a step-by-step guide to finding your offer price.
Our guide to important things to find out includes: diagnostic reports and surveys, sun & micro-climates, potential issues with the view, housing taxes, the age, internet and mobile access, danger (red) zones, health risks, privacy & space issues, nearby problems, what you’ll actually own, illegal additions and structures, why they’re selling, how to verify, and more.
Our guide to things to consider includes: your actual costs, issues with buying a ‘newly renovated’ villa, learning about local crime & squatters, and questions to ask yourself.
Our guide to the buying process includes: negotiating the price & the initial offer, choosing an honest notaire, buying in the black, the official offer & deposit, using a SCI, contract pitfalls, the cooling-off period, what to do before handing over the money, and the final signing.
Our guide for after you buy includes: insurance pitfalls, tips for second homes, renting your villa, renovating, and what to know about hiring people.