It may be wiser to let your home long-term and wait until the market has recovered. It’s also unwise to sell in the early years after purchase, when you will probably make a loss unless it was an absolute bargain (and may have to pay capital gains tax as well).
Having decided to sell, your first decision will be whether to sell it yourself or use the services of an estate agent (see below). Although the majority of properties in France are sold through estate agents, a large number of owners also sell their own homes. If you need to sell a property before buying a new one, this must be included as a conditional clause in the purchase contract for a new home. Note that when selling a property in France the vendor chooses the notary who performs the completion.
The legal procedure is the same as for buying a property, but a few points are worth noting. You may be asked by an agent to sign a conditional clause in the sales contract that the sale is dependent on the buyer selling another property; you aren’t obliged to do so and should be wary of agreeing to such a clause, particularly if the buyer is selling a property in the UK, where sales can be cancelled at any stage – you won’t be able to cancel your agreement even if another would-be buyer offers you cash. Secondly, if a buyer wants to have the property inspected or surveyed, it’s wise to have this done before any contracts are signed.
It can take a long time to sell a home in France, where it’s common for properties to be on the market for six months or more.
Price
It’s important to bear in mind that (like everything) property has a market price, and the best way of ensuring a quick sale (or any sale) is to ask a realistic price. If your home’s fairly standard for the area, you can find out its value by comparing the prices of other homes on the market, or those that have recently been sold. Most agents will provide a free appraisal of a home’s value (une analyse comparative du marché, which compares your property with others that have sold recently in order to establish a realistic price) in the hope that you will sell it through them. However, don’t believe everything they tell you, as they may over-price it simply to encourage you. You can also hire a professional appraiser to determine the market value.
Bear in mind that many people fix their budgets according to ‘round’ numbers, so you may have more enquiries if you set your price at, say, e195,000 than at e205,000. If you’re marketing your property abroad, e.g. in the UK, take into account the prevailing exchange rate: if the euro is strong, this will deter foreign buyers; if it’s weak, you may even be able to increase the price.
You should be prepared to drop the price slightly (e.g. 5 or 10 per cent) and should set it accordingly, but shouldn’t grossly over-price a home, as this will deter buyers. Don’t reject an offer out of hand unless it’s ridiculously low, as you may be able to get the prospective buyer to raise his offer. When selling a second home in France, you may wish to include the furnishings (plus major appliances) in the sale, particularly when selling a relatively inexpensive property with modest furnishings. You should add an appropriate amount to the price to cover the value of the furnishings, or alternatively you could use them as an inducement to a prospective buyer at a later stage, although this isn’t usual in France. Whatever you decide, be absolutely clear as to what is (and isn’t) included in the asking price.
Your would-be buyers will also want to know how much the property costs to run, so prepare a summary of annual property taxes, heating costs, utility bills, etc.. If you’ve carried out major repairs or renovation work, make copies of the invoices and any other relevant documentation. Similarly, if your property has been used as a source of income, e.g. let on a B&B or self-catering basis, provide copies of audited income statements.
Presentation
The secret to selling a home quickly lies in its presentation (assuming that it’s competitively priced). First impressions (both exteriors and interiors) are vital when marketing your home and it’s important to make every effort to present it in its best light and make it as attractive as possible to potential buyers. Most homes sell (or fail to sell) within the first 30 seconds of a viewing. It may pay to invest in new interior decoration, new carpets, exterior paint and landscaping. A few plants and flowers can do wonders. Note that when decorating a home for resale, it’s important to be conservative and not to do anything radical (such as install a red or black bathroom suite); white is a good neutral colour for walls, woodwork and porcelain.
It may also pay you to do some modernisation, such as installing a new kitchen or bathroom, as these are of vital importance (particularly kitchens) when selling a home. Note, however, that although modernisation may be necessary to sell an old home you shouldn’t overdo it, as it’s easy to spend more than you could ever hope to recoup in the sale price. If you’re using an agent, you can ask him what you should do (or need to do) to help sell your home. If your home is in poor repair, this must be reflected in the asking price and, if major work is needed that you cannot afford, you should obtain a quotation (or two) and offer to knock this off the asking price. You have a duty under French law to inform a prospective buyer of any defects which aren’t readily apparent and which materially affect the value of a property. There are also special disclosure requirements for apartments and other community properties.
It’s possible to make your home more sellable without spending a centime. Start by clearing out excess furniture and other clutter; this will make rooms look bigger, reduce distraction for potential buyers and give the impression that the property is well cared for. Give the property a thorough clean and air it, ensuring that every room smells fresh (and not of air freshener!). Show each room in its best light with the use of table and standard lamps as well as fixed lighting, or by lighting a fire. If you have pets, make them as invisible as possible (unless you know that your viewers are pet-lovers), removing hairs from furniture, etc.
Finally, allow potential buyers on a first-time viewing to show themselves around rather than ushering them from room to room and subjecting them to a running commentary. Withdraw to the garden or a neighbour’s for as long as necessary. Any questions your visitors have can be answered afterwards or, if they’re keen on the property, on a second visit.
Selling Your Home Yourself
While certainly not for everyone, selling your own home is a viable option for many people and is particularly recommended when you’re selling an attractive home at a realistic price in a favourable market. Saving estate agent’s fees may allow you to offer the property at a more appealing price, which could be an important factor if you’re seeking a quick sale. Even if you aren’t in a hurry, selling your own home saves you an agent’s fees, which can be up to 15 per cent in France.
How you market your home will depend on the type of home, the price, and the country or area from where you expect your buyer to come. For example, if your property isn’t of a type and style and in an area desirable to local inhabitants, it’s usually a waste of time advertising it in the local press.
Advertising is the key to selling your home. The first step is to get a professional looking ‘for sale’ sign made (showing your telephone number) and to erect it somewhere visible. Do some research into the best publications for advertising your property, and place an advertisement in those that look the most promising. If you own a property in an area popular with foreign buyers, it may be worthwhile using an overseas agent (see below) or advertising in foreign newspapers and magazines.
You could also have a leaflet printed (with pictures) extolling the virtues of your property, which you could drop into local letter boxes or have distributed with a local newspaper (many people buy a new home in the vicinity of their present home). You may also need a ‘fact sheet’ printed if your home’s vital statistics aren’t included in the leaflet mentioned above and could offer a finder’s fee (e.g. €750) to anyone finding you a buyer. Don’t omit to market your home around local companies, schools and organisations, particularly if they have many itinerant employees.
Finally, make sure you have a copy of the local cadastral plan (plan cadastre), confirming the exact extent of the plot. It may also help to provide information about local financing sources for potential buyers. With a bit of effort and practice you may even make a better job of marketing your home than an agent! Unless you’re in a hurry to sell, set yourself a realistic time limit for success, after which you can try an agent. When selling a home yourself, you will need to obtain legal advice regarding contracts and to engage a notaire to hold the deposit and complete the sale.
Using an Agent
Most owners prefer to use the services of an agent or notary, either in France or in their home country, particularly when selling a second home. If you purchased the property through an agent, it’s often wise to use the same agent when selling, as he will already be familiar with it and may still have the details on file. You should take particular care when selecting an agent, as they vary considerably in their professionalism, expertise and experience (the best way to investigate agents is by posing as a buyer). Note that many agents cover a relatively small area, so you should take care to choose one who regularly sells properties in your area and price range.
Agents’ Contracts
Before offering a property for sale, a French agent must have a signed authorisation, called a ‘sales mandate’ (mandat de vente), from the owner of the property. There are generally two types of mandate, an ordinary or non-exclusive mandate (mandat simple or mandat sans exclusivité), which means that you reserve the right to deal with other agents and to negotiate directly with private individuals. An exclusive mandate (mandat exclusif) gives a single agent the exclusive right to sell a property, although you can reserve the right to find a private buyer. An agent’s fees are usually one or two percentage points lower with an exclusive mandate than with a non-exclusive mandate.
Note that, if you sign a contract without reserving the right to find your own buyer, you must still pay the agent’s commission even if you sell your home yourself.
Make sure you don’t sign two or more exclusive mandates to sell your home. Check the contract and make sure you understand exactly what you’re agreeing to.
An agent with an exclusive mandate has the authority to sign a sales contract on behalf of the vendor. Therefore, before signing a contract to sell a property yourself, you must ensure that any other agents to whom you’ve given a mandate haven’t found a buyer and signed a contract on your behalf. Notify all agents with a non-exclusive mandate by registered letter when a property has been sold. Mandates are for a limited period, usually three months, but can be extended for further three-month periods, usually up to a maximum of a year. It’s usually possible to terminate the contract after three months by giving written notice by registered letter two weeks before the end of the three-month period. Note that you must still pay an agent’s fee if you sell to someone introduced by him within a year of the expiry of a mandate. Contracts state the agent’s commission, what it includes, and most importantly, who must pay it.
TIP: Generally, you shouldn’t pay any fees unless you require extra services, and you should never pay commission before a sale is completed.
Agents’ Fees
When selling a property in France, the agent’s commission (5 to 10 per cent of the sale price) is usually paid by the vendor and included in the purchase price. Foreign agents who work with French agents share the standard commission, so you pay no more by using a foreign agent. Note that when a notaire is the selling agent, his sales commission isn’t included in the asking price and is paid by the buyer. French agents don’t normally charge for advertising or other expenditure, but it’s worth checking in advance.
Capital Gains Tax
Capital gains tax may be payable on the sale of a home in France and you should check your liability before selling, as there may be ways of avoiding it.
This article is an extract from Buying a home in France. Click here to get a copy now.