Things to Consider Before Buying a Villa
It’s surprisingly easy to get swept up in the excitement of buying a villa. But before your get your heart too invested in the idea, make sure to be realistic about what you want and the less-pleasant realities that come with owning property.
Questions to Ask Yourself
Here are some questions to consider to help you determine whether a property you’re considering is your best option:
Are you forcing the numbers to work?
Being able to “afford a house” goes far beyond whether you can hypothetically secure the funds for a down payment and get a mortgage. It also includes all the repairs, taxes, maintenance fees, utilities, and who knows what else that pops up over time. Make sure you take all of that into consideration and be realistic about what you can afford without adding financial stress to your life.
Does the home excite you?
Not everyone is in a place where they’re able to hold out for a home that “excites” them, but if you are, why spend that much money on something you’re not that into?
Does the home meet everyone’s needs?
If you live on your own, this isn’t an issue, but if you live with a partner and/or family, or plan to have guests, make sure the house is a good fit for everyone—not just you.
Are you ignoring the findings of the inspection reports?
If so, this may not be the place for you. If the inspection and diagnostics reports come back with red flags trying to tell you this isn’t the house for you, listen to them. Don’t get too attached to a property. Once we begin picturing ourselves in a home or visualizing ourselves raising kids in a home, it’s really hard to walk away.
Are you up to the task of making all the repairs the home requires?
Please be aware that home improvement shows only show a tiny part of the entire renovation process. It is so much work. And also expensive. If you don’t have the skills to do it yourself, or the money to hire people to make the repairs, it’s time to pass.
Your Actual Costs
Before buying a villa, you need to realize that the sale price is not the only money you’ll be on the hook for. There are a lot of sunk-costs. To close the deal, the notary collects 7% to 8% (for their fee plus government taxes).
Mortgage costs: There’s also a one-time sunk cost to set up a mortgage, which is usually 1.5% (1% mortgage registration, plus 0.5% underwriting fee) of the villa’s sale price, plus around €2000 to €3000 to do a ‘valuation’. And if you hired a mortgage broker, they charge a one-time % fee on top of that too. Add to that the yearly costs of mandatory mortgage insurance (which costs about 0.5% of the villa’s value each year), and the mortgage’s interest. Here’s a mortgage calculator so you can calculate your interest and monthly payments.
Yearly sunk costs: Every villa owner is also subject to two or three additional taxes, paid every year: tax foncière and tax habitation, plus the wealth tax (if that applies to you). For a €1 million villa, expect to pay around €4000 per year (but this varies). Don’t forget to factor in your new insurance costs (contents insurance and, if needed, red-zone insurance for natural disasters). Plus, some villas have a mandatory fee for community things like a guard, gardeners, etc. You’ll also need to budget for things like repairs and maintenance.
The laws in France protect the poor and the criminal, and the police rarely make arrests for break-ins. Break-ins are a big (and growing) problem on the French Riviera. You’ll need to get familiar with the laws so you don’t end up in jail for defending yourself during a break-in. In short, you can’t defend yourself with more force (or even the threat of more force) than the criminals are using *at that exact moment* (so if they have a gun and they turn away from you, you can’t shoot them in the back), or you’ll go to jail. Here’s a website that will give you an idea of the crime in the area you’re considering and our overview of crime on the French Riviera.
Squatter’s rights are a big problem for homeowners in France. From French gypsies who live the “squatter’s lifestyle” (with the help of many websites, online instructions, and other squatters) to foreigners seeking asylum to criminal networks (mostly from Romania and Bulgaria), there are many people out there who know the laws and abuse the system.
If you enter your own property to attempt to get them to leave, you can go to jail for 3 years and get a €30,000 fine! The law says that if you’re not physically home when they break in, then you need to go through the proper channels to get rid of them.
Thankfully, the laws have recently improved, so you could possibly get the squatters out within 3 days. Unfortunately, there’s a nasty loophole where if your local préfet sides with the squatters (and many do, amazingly) or doesn’t respond, you will then be required to hire an expensive lawyer and go to court, in which case it can take months or even years to get an eviction notice. This process can turn owning a property into a nightmare.
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.