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.
The only way to find out the real value of a villa you’re considering buying is by looking at the prices of past sales nearby. But watch out! While the published prices and locations are correct, the m2 size of villas are massively incorrect, so you’ll need to do some digging to find the real m2 size. Here’s a helpful example and here’s instructions.
Without the real m2 size, you can’t calculate the correct m2 pricing (this is also why the government website has incorrect m2 pricing averages). This benefits the notaires and agents (but not the buyers!), since they are paid a % commission.
Here’s what you need to know:
Fraudulently Inflating Pricing by Deflating the m2
In France, notaires are lawyers that process all real estate transactions. Since the notaires make a % commission on each sale, they have several fraudulent tactics to make the m2 prices seem much higher than they really are. Agents then use this false data as justification for above-market asking prices.
Notaire Secret #1: Per m2 pricing averages are deliberately inaccurate…
Just over 5 years ago, the French government decided to fight some of the unethical practices in the French real estate industry. One of these ways was to force notaires to publish the sold prices of all real estate transactions. The notaires fought back by arguing that this is too much work for them, and making a rule stating that they only need to publish the m2 price averages / statistics if there were more than 20 sales in that category (land, old house, new house, apartment) per quarter.
This gave them the excuse to dramatically inflate the m2 price averages / statistics for smaller towns, making the pricing uselessly inaccurate, and much higher than reality. In this case, they put a disclaimer stating that they’ve ‘broadened the criteria for your price search’, without specifying what that means.
That’s why, for towns (but not for cities), their numbers are much higher than actual, as you’ll see from the other websites (like JDN) that base the data they display on all the actual individual sales from that town only.
Notaire Secret #2: The m2 villa sizes are fake…
The m2 listed for sold villas is a joke — there’s no basis on reality. Since there’s no law against it, notaires report m2 sizes that are many, many times smaller than the villa actually is. They do this to (fraudulently) inflate the € per m2 statistics (in the hopes of making more money for themselves, since they’re paid on commission).
What does the law say? It says that there’s no responsibility for the m2 to be correct. It also says that the m2 are only estimates of the ‘habitable m2’, which includes only the ‘habitable’ space in the main living area. ‘Habitable’ m2 does not include areas with low ceilings, the basement (even if it’s liveable / finished), storage rooms, separately accessed apartments or guest houses, multiple villas on one property, the garage, storage, or pool house. Therefore, a villa that displays as 145m2 might have been advertised as 450m2 (see examples below).
Notaire Secret #3: Accurate m2 isn’t required by law!
Further inflating the prices is the fact that a proper m2 survey isn’t required by law for villas, and so the notaires (and agents) have no legal responsibility to specify m2 that is accurate.
Obviously, the notaires will report a much smaller size because it increases the m2 average pricing (which helps them) and it lowers the new buyer’s tax rate since the taxes are based on the estimated value of the villa, and size is the main way the government calculates that. This has become regular practice.
This means that the average prices displayed on these sites (and the m2 prices per town) are much, much higher than they should be. The notaires have all agreed that this is the way they’ll manipulate the market in an attempt to sucker unsuspecting buyers into paying far, far above market value so the notaires and agents can make more money in commissions. Luckily, it’s not often that a buyer is suckered because most need a mortgage, and the bank will always require a professional valuation.
This villa in Beaulieu was listed for €18 million asking price and, after years on the market, finally sold for €3.6 million. The notaires claim that this 2-villa property is only 126m2, but as you can see from Google Earth, this is clearly false. The original listing claimed the villas have a combined size of 2470m2.
Therefore, this sale went into the database at a false m2, making this seem like it was €28,500/m2 when it was actually €1,450/m2!
There are endless examples of this, as an estimated 95+% of villa sales are listed with incorrect m2.
This villa sold at €1,450/m2, not €28,500/m2!
Obviously, buyers are also happy to report a smaller size because it lowers the yearly housing tax rate since the taxes are based on the estimated value of the villa, and size is the main way the government calculates that. This happens even on properties that have been rebuilt / expanded / renovated.
The notaires have no legal obligation to specify accurate m2 when reporting on sales of villas.
They don’t even increase the m2 after complete rebuilds…
The notaires don’t even update the m2 after massive extensions or rebuilds, despite the real m2 being public record.
Here are some typical examples….
In 2019, this villa was falsely reported by notaires as being 258m2. But, as you can see by looking at the planning permissions, the villa was enlarged in 2018 from 334m2 to 1884m2.
Instead of €12,790/m2, it actually sold for €1,751/m2!
This villa is often used as an example by agents that falsely claim it sold for €18,000/m2. It is listed as being 165m2 and having sold for €3 million in 2021. But by looking at the planning permissions, you can see that it was actually 400m2, but that they added an extension of 1029m2 in early 2020, making it 1429m2 when it sold in 2021, not including the guest house of about 200m2, making the total 1629m2.
Therefore, this sale went into the database at a false m2, making this seem like it was €18,000/m2 when it was actually €2,100/m2!
This villa sold at €2,100/m2, not €18,000/m2!
This brand-new villa (on the tip of Cap Martin) is listed as being 239m2 and having sold for €2.4 million in 2020. But by looking at the planning permissions, you can see that it is actually 680m2 and was completely rebuilt as new in 2019.
This new, waterfront villa sold at €3,530/m2, not €10,042/m2!
The satellite image in Google Earth is from 2019, while the villa was under construction.
Notaire Secret #4: They try to limit your rights…
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.
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.
Agent Secret #5: Non-binding ‘estimates’…
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.
More secrets: Lies, lies & more lies!
Here’s a 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.
Buying a ‘New’, Off-Plan, or ‘Renovated’ Villa
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? 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 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.