Real Estate Agents 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.
When working with real estate agents, there are several things you’ll need to be aware of so that you can avoid the most common pitfalls….
How Real Estate Agents Operate
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.
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.
There are many illegal 'real estate agents' trying to make money off French Riviera property, so it’s important that you make sure they are 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.
Who to Trust? A Warning
Real estate agents and notaires get paid when you complete the purchase, and the more you spend, the more they make. So, naturally, they are incentivized to be very optimistic about both the market and whatever villa you’re considering. They are paid a percentage of the sale price, and they only get paid if you complete the purchase for the villa. 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, do your own checking to see if all the structures on the property were built legally, and to check the other things listed here. 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 brokers charge 20%, and the government charges foreigners a 30% rental tax, so you’ll make half of the rental price).
Things Agents Tell You
Given the misaligned incentives, always do your own research, and watch out for these things that some agents say:
“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 flatlined for over a decade. 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.
“The market has exploded / prices have gone up since the notaires last published the sale prices…” — Again, that is certainly not true, as France’s real estate market is like molasses, it’s slow-moving. It’s also 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).
“This villa is on an expensive street, so the price is justified.” or “The house down the street sold for €_____.” — First, assume that this is probably not true (and you can verify if it is by searching the past sales, which are listed on this notaire website). 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 another agent. Also, many deals fall through — a property with an offer on it is far from a done deal and very well may end up back on the market.
“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.
“You can’t base your pricing on the notaire’s website 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), or that the notaire’s published sale prices are somehow incorrect (they’re definitely not!) Here’s a guide to coming up with your offer price.
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 why prices will continue to fall.
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 real estate agents includes: who to trust (a warning), things agents tell you, how real estate agencies operate, and why you should avoid illegal and non-local agents.
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, 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, the deposit, 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.