Secret agents: French property professionals explained
- Credit: Archant
With so many options available to househunters in France, Sophia Mose takes the lid off the world of estate agents, property finders and buyer’s agents
If you’re looking to buy a property in France it is useful to have a thorough understanding of the French system and all the different services on offer.
As regular readers will know, property professionals are strictly regulated in France, and it’s not a case of being able to hang out a sign or set up a website et voilà.
Individuals or companies in France or abroad who are involved in the sale and purchase of real estate must hold a carte professionnelle, as set out in the ‘loi Hoguet’ of 2 January 1970.
The law and its implementing decree of 1972 were enacted to protect the public from uninsured and unqualified property professionals, and violations can lead to imprisonment and hefty fines. To obtain the carte, the agent must do the following:
• meet specific education requirements, such as a degree in law, economics or business, or have relevant experience
• take out professional liability insurance
- 1 3 key things you need to know about visas for France
- 2 Real Life: Canalside life in an idyllic Hérault village
- 3 8 Instagram accounts all French learners should follow
- 4 The Madame Blanc Mysteries: former Coronation Street star swaps Manchester for France
- 5 Take a journey through France with the FRANCE Calendar 2022
- 6 Tour de France 2022: 3 new stage hosts announced
- 7 Bargain beauties: 9 renovated French properties on the market for less than €150,000
- 8 Can I disinherit my children?
- 9 What you need to know about France’s Covid-19 health pass system
- 10 Aude: 6 alternative tourist spots in Cathar Country
• provide a financial guarantee if receiving funds from clients into their bank account.
A licensed estate agent is permitted to draft the initial sales contract, receive funds from the buyer into their account and give general legal advice in relation to the purchase. Most are very good at their job and are experienced property professionals with a good knowledge of their local market.
Carte professionnelle holders can mandate others under an agent commercial (agency) agreement that sets out what the agent can and cannot do on the licensed estate agent’s behalf. These agents commerciaux receive an attestation from the relevant préfecture and receive commission from the licensed agent. They must state in all their communication and advertising that they are an agent commercial and under which carte professionnelle they work.
This system has been used since 2006 to form nationwide networks of sales agents such as Orpi and Optimhome, and has been under attack by FNAIM, France’s largest professional standards body for estate agents. Their concern is that there aren’t any education, training or supervision requirements for agents commerciaux in the property business.
The recently promulgated loi Alur of 24 March 2014 is set to change that this summer, and this can only be good for the profession and its image.
Most people will think of an estate agent as representing the vendor, lining up prospective buyers and getting the best possible price for the property. When they walk into an agency as prospective buyers, however, they often expect the agent to advise them regarding fairness of the asking price and whether there’s anything wrong with the property.
Property buyers should be aware that the French estate agent is defined by law as being an intermediary who can bring together two parties to accomplish a sale, but who has no fiduciary obligations to either party – nor do they have to negotiate the best price on either party’s behalf.
Although agents might honestly think that they can represent both parties’ interests at the same time, it would be unrealistic to always expect this to be possible with the buyer and seller on opposite sides of the transaction. I don’t believe that a lawyer can represent both parties in a contract negotiation without a conflict of interest, and this also applies to an estate agent in a property transaction.
Side by side
French estate agents in the business of selling houses often market themselves as buyer’s agents, saying that they can do a ‘free search’ for buyers. What they will do is check with their contacts to see if they have anything suitable on their books.
Househunters can be lulled into the idea that in such cases the agent is working exclusively for them. This is not the case. French case law (Cour de Cassation, 13 May 1998) also has confirmed that a French estate agent is allowed to charge commission from both the buyer via a search mandate and the seller via a sales mandate with respect to the same property transaction.
I therefore recommend that prospective buyers:
• always use a notaire (state appointed conveyancing lawyer) for the initial contract of sale
• keep in mind that the estate agent has no obligation to get them the best price or otherwise protect only their interests, even if they sign a search mandate with them
• not disclose any information to the agent that could be used to their disadvantage during the price negotiations.
In France, search agents that act for buyers are a fairly recent phenomenon and the profession of buyer’s agent or chasseur immobilier is developing rapidly. There is no protected name for the profession and many different services are advertised as property finders, property searchers or buyer’s agents. Case law and government guidelines have made clear that property professionals who act exclusively for buyers in a real estate transaction fall under the same licensing requirements as traditional estate agents.
Search agents worldwide tend to be property experts who can help to save prospective buyers time, stress and money. If the clients live abroad and don’t speak the language of the country they’re looking to buy in, the advantages of the service are even clearer. The French system has additional peculiarities that can make using the services of a property finder even more attractive:
• There is no national listing system in France where estate agents can access properties of other agents. Some agents share properties and commission with other agents but many don’t. Prospective buyers therefore have to contact countless agencies to access all of the listings. This is only possible if you speak French, as most agents don’t speak enough English.
• Approximately 50% of property purchases undertaken in France are via private sellers and many such properties never make it to the internet.
• Because owners are not obligated to sell only via the estate agencies they list with, the property details remain vague to ensure that househunters cannot find the property without the agent and cut them out of the sale. This makes it very hard to obtain more details without viewing a property or using a search agent.
• France arguably has more micro-markets than anywhere else. Buyers need a local expert on their side to recommend the best areas and which to avoid.
When hiring a search agent the following points might be useful to consider:
Check whether they are based in France, speak French, and are in possession of (or work under) a carte professionnelle.
Find out if the agent visits properties on your behalf and can send you detailed reports with photos and analysis. If they are a member of one of the two national regulatory bodies for buyer’s agents, the FNCI and FFCI, then you know for sure that they will.
If they do not charge you a fee, then check how many agencies they have a sharing arrangement with (differs per region), and whether they search for private sales.
Ask if they can help you obtain financing, recommend reliable lawyers, financial experts or structural surveyors. And do they assist you until you have the keys of your new home in your hand?
Fees and services
There is a vast range of property finding services on offer. Some property finders are free to the buyer as they share the commission of the estate agent that sells the property. This restricts the number of properties that the property finder can show you, and also diminishes their independence when negotiating on your behalf.
Others charge the buyer a success fee, which ensures that they remain without conflict of interest and can search with all agencies and also private sales. These property finders will pre-visit properties on your behalf and send you detailed reports with photographs. In the negotiations they will endeavor to reduce the seller’s agency fee (which is included in the asking price). That reduction often tends to be close to the search fee, meaning that the service ends up being ‘free’ again.
Many people assume that the paid buyer’s agent service is only for clients with higher budgets, but the country’s two largest networks take on clients with all budgets as long as their wish list is realistic.
Whether you intend to find your dream home in France on your own or with the help of a search agent, never assume that the French system functions as it does in your home country, and it is wise to be even more alert and careful than you would be if you were househunting at home.
Sophia Mose is a lawyer and licensed French property professional based in Aix-en-Provence and runs buyer’s agency Provence Search