Real Estate Scams & Secrets
The French Riviera is a very peculiar real estate market. Many people get scammed because they don’t know the secrets of this business. Well, we’re the whistle-blowers here to show you what to look out for.
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 / notaires / developers 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 they 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.
Many villas are listed for sale by owners who don’t actually care if their villa sells. Some don’t want their villa to sell! Here’s why:
Seller Secret #1: Legal Tax Avoidance
Due to an absolutely stupid tax loophole, many property owners list their property for sale even though they don’t want to sell it (hence, listing it at many multiples higher than its actual value). They do this for legal tax evasion — as long as a villa is listed for sale, the owner is exempt from several expensive property taxes!
This applies to non-primary residences, of which the French Riviera has in abundance (almost 40% of villas here fall into this category). Agencies embrace this phenomenon because they can point to these listings as a (false) indicator of where the market is at.
Seller Secret #2: Going Fishing, for a Sucker!
The French Riviera is only about 60% primary residences. The other 40% is made up of a lot of speculators who own several ‘vacation rental’ villas. These sellers list at high prices and go ‘fishing’ for an ignorant buyer who will overpay. They then turn around and use that money to buy 2 or 3 similar villas, at market value.
These overpriced villas usually sit on the market and do not sell because they are listed at rigid, ridiculous prices with owners that are not serious about selling. Unfortunately, many agents and sellers point to these ‘listing’ prices (not sold prices, which is what they should be looking at), to justify overpricing their villa.
In France, notaires are lawyers that process all real estate transactions.
Notaire Secret #1: Incorrect m² Data
There’s so much to say about this, that we made a separate guide all about the m² average pricing and how the m² listed in DVF is, in fact, a complete scam designed to mislead buyers. It’s worth reading — trust us.
Notaire Secret #2: The Contract Secret
A ‘vice caché’ is a hidden or latent defect in a property. Protection for buyers is enshrined in Article 1641 of the civil code. The seller is obliged to disclose all important information about the property that might affect the decision of the buyer, or the price they paid for the property. If they do not do so, then it is possible for a court of law to offer a remedy, such as a price reduction or annulment of the sale (which is why notaires don’t want you to know about this, since they lose their commission if there’s an annulment).
Not surprisingly, notaires sometimes seek to limit your use of the ‘vice caché’ protection by adding an exclusion clause the in the sale contract that limits the buyers rights once they find a serious hidden problem with the villa. Our advice to all buyers is that you should insist on the removal of this clause in the sale contract. The seller may well object to you doing so, but if they do, their motives need to be questioned. You should be very hesitant about accepting to buy ‘en l’état’ (as seen) unless you fully understand what you are buying.
Real Estate Agent Secrets
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.
Agent Secret #1: Publicly-Listed Properties are the Bottom-of-the-Barrel
You may find this shocking, but only about half of all villa sales are via real estate agents. Since real estate agents charge between 4% and 10% commission (usually payable by the seller), most sellers first try to sell via social media, local papers, friends, etc., and about half all properties get sold this way. If the seller can’t manage to find anyone who wants the property, then they’ll sign on with a real estate agency.
Once a real estate agency 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. Finally, if none of them can find an interested buyer, that’s when they start paying to advertise it (this is when other agencies start competing with them). So usually if a villa hasn’t sold by the time is publicly advertised, it’s because it’s overpriced or has issues — or both.
Agent Secret #2: ‘New to Market’? Yeah, Right!
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 a ‘new’ listing. Instead, take a look at the date on the diagnostics.
Agent Secret #3: Foreign & Unlicensed Agents Abound
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 also 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.
Agent Secret #4: Did it Really Sell? Probably Not
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, 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, or the owner took it off the market. 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).
Agent Secret #5: Their Pricing is Not Based on the Market
Agents will tell you that they did a ‘valuation’ to come up with their pricing — but when you ask for the valuation and research behind it, they won’t give it to you. That’s because there was no ‘valuation’, and the pricing isn’t based on market value. Alternatively, they might tell you about some villa that sold for a high per m² price. But, as you learned above, the m² pricing is fake.
Learn how to check the real market value of a villa in our real estate pricing guide.
Agent Secret #6: Non-Binding ‘Estimates’
Thinking of renovating? No matter what the agent or seller tells you, before you buy, make sure to get a certificate of conformité and town planning certificate from the Mairie; without these, you may not be able to renovate.
Many agents will recommend you get a quote for work from ‘a great builder they know and trust’. This builder will give you a non-binding or verbal ‘estimate’ of what it would cost to do the work. These estimates are normally far, far lower than you’d actually end up spending.
If you want to know the real cost of renovating, make sure to get a very, very detailed ‘devis’ with all the items and pricing clearly stated, from several builders. A price quotation in French is called a devis and once it is signed by both client and contractor it becomes a legally binding contract. Beware also that if the price given to you is an ‘estimation‘ not a ‘devis‘ the builder is not bound by the price and you can expect the final price to be as much as 5x what they quoted. Learn about ways to avoid being scammed.
Agent Secret #7: Saying You Can Expand / Renovate When You Can’t
A trick that agents pull is this: they get their architect contact to “verify” that you can renovate and/or expand the m² of a property, but then once you buy it, they all ghost you and you find out the hard way that it’s not possible to expand the m² (yes, even if ‘it keeps the same footprint’) or do the renovations you wanted. This has happened to several contacts of ours and seems to be common practice.
The only way to know if you can expand it is to get proper planning permission approval from the Mairie, and double-check it at the Mairie in person. If you don’t want to wait for that, you can get the urban planning certificate within one month max.
Agent Secret #8: Market Manipulation
Real estate agencies also manipulate the market by buying properties at prices that are 5x or more above market value, to make a sale at a price that is higher than any other villa has sold for in that area. This is the same market-manipulation tactic that is used in other luxury-focused industries such as the art market.
They do this so they can point at that sale in an attempt to justify their far-above-market asking prices, and so that they can manipulate the publicized average m² prices. While they own it, they rent it out.
Here’s an example: By far the highest-priced sale of a villa in Eze is at 772 avenue de la Marne. A little digging and you’ll see that Prestigimo (a real estate agency) bought it from a developer. They do their best to disguise this fact, and sell properties between agencies, buying from developer buddies to get money back, etc. Dig around and you’ll find an example like this in nearly every town.
Agent Secret #9: Lying About the m²
On top of all this, and adding to the confusion around m² pricing, agents routinely lie about the m² size of villas, and they get inspectors to lie too. It’s not unusual for listings to claim that a villa is 100 to 200 m² larger than it really is.
Agent Secret #10: The Dishonest Things They Tell You
Agents have certain things they tell potential buyers, to manipulate and mislead them. You’ll hear them again and again, so it’s important that you recognize them for what they are. Here’s the list of lies agents will tell you. Learn and protect yourself so you don’t fall for them.
Builder / Developer / Property Dealer Secrets
Think buying from a ‘marchand de biens‘ (builder / developer / property dealer) will save you headaches? Think again.
On the French Riviera, there are many, many (did I say MANY?!) developers. They have special relationships with agents where they get the option to buy villas (normally they only want ones that need renovation or that can be expanded), at market value, before any regular buyers can see them. They do cheap renovations and put it on the public market, using the same agent, at a highly-inflated price far above market value.
You might be able to catch this by checking the map showing villa sales (with exact location and pricing, but incorrect m²) from the past several years. Keep in mind that this map is infrequently updated so the most recent sales won’t show up.
Developer Secret #1: Cheaply-Done Renovations
Naturally, these developers want to maximize profits and minimize expenses. It is, after all, a business. They do this by cutting all sorts of corners on the stuff you can't see. They hire the absolute cheapest (and often unqualified) construction people, electricians, plumbers, etc. and tell those people to do the job as cheaply and quickly as possible. They save a lot of money doing it this way.
Just because it looks nice on the outside doesn’t mean it’s well-done. Don’t trust it when the agent says this developer has a great reputation and is high-quality. You’re better off finding a villa that was renovated years ago by the owners — renovated for them, not for resale.
The majority of new homes on the French Riviera are more like “Primark” than “Hermès”, says Peter Illovsky, president of Côte d’Azur Sotheby’s International Realty. Even so, new-builds sell with a premium of 10% or 20%, even when they are sold off-plan, says Alex Balkin, director of Savills Riviera and Savills Nice.
Developer Secret #2: Offloading Responsibility onto the ‘Warranty’
They reassure buyers by giving them a warranty (under French civil law all building work is guaranteed for up to 10 years), but insurance pays the repair costs — not them — and you still have to deal with all the problems that pop up. And you can expect repeated repairs of the same issue because cheap materials keep getting used — after all, the repair company gets paid each time.
Plus, the warranty insurance won’t cover major problems, like needing the entire plumbing to be re-done because the pipes used were cheap and too narrow, or the heaters were the cheapest on the market and are unreliable.
This means the developer has zero incentives to do anything other than the cheapest job possible because, once you buy it, it’s your problem, not theirs. (And no, they don’t care about their ‘reputation’, since agents don’t disclose who the seller is.)
All this means BIG headaches for you, down the line, when you move in an realize that your air conditioning doesn’t work properly, the electrical and plumbing need to be re-done, underfloor or insulation was not added, etc.
Buying a Villa? Read This First!
When you’re ready to look for a property, make sure to read our complete guide to buying real estate in France. These guides explain how to estimate a property’s real value, how to get the best price and avoid over-pricing, what to look out for, how to avoid getting scammed, and more.
First, in order to understand the real estate market in France, you must understand how m² pricing is a giant scam. Then, you can move on to the other 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 real estate agents includes: the dishonest things agents will tell you, how real estate agencies operate, buyer’s agents and property finders, why you should avoid illegal and non-local agents, and who to trust (an important warning).
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, 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.
Guide for sellers: How to price your villa so it will sell.