M D G – F R A N C E
Real Estate Update: Fall 2006
While the new Branly Museum that has recently opened in the 7th Arrondisement may have provoked some tough reviews, there is one aspect of this new world class attraction that has received unanimous recognition: Chirac’s incorrigible urge to splurge to glorify his presidency has provided yet another reason for the savvy real estate investor to put Paris at the top of the list.
Before feeling too left out, if you are reading this and haven’t yet invested in Paris (or France), it may prove worthwhile for those in the market for an apartment to buy here (even the most penny-pinching of you) to work out how much money we can actually waste- not through extravagance like the Branly Museum, but by the deceptively false ‘feel-good’ practices that locals employ on foreigners when buying property here.
For example, take the idea of trying to buy during slow months of the year, a great way to find bargains? Yet in reality, a time when many normally wise real estate investors lose their grip on what is a good price for an apartment. Thinking that because it’s winter/raining/after the new year/after the school year/after the vacation/after the elections/after the dollar rises, etc…agents end up telling buyers, it would be madness to let someone else buy this “one-of- a kind” apartment.
“It’s very rare that an apartment that was purchased with this crystal ball price analysis turns out to be a good long-term purchase,” says Philip Gordon, owner of the apartment search and acquisition consultancy, M D G – F R A N C E, based in Paris (with networks also in Nice/ Cote D’Azur, Bordeaux and Normandie). “During these periods, real estate agents (Immobiliers) give the impression that inventory is limited, so psychologically buyers tend to make offers recklessly.”
The result is often similar to the Branly Museum
Other false conceptions that can lead to serious losses of your money-for example, when potential apartment owners try to save with ‘do-it-yourself’ property searches, inspections, negotiations and financing. On paper, this is a canny strategy; but for the uninitiated, not only can the unexpected bank fees, notaire charges and syndic payments become major cost line items, but without the requisite expertise, many people end up paying thousands of euros more than is necessary.
Philip Gordon, a professional real estate intermediare (Carte Liberale) with more than 30 years experience, regularly hears about buyers who overpaid for apartments, services and financing. “People try to do a little more than they are capable of,” he said, “It generally means the system here ends up costing them more.” Damage to the client’s pride and finances is a recurrent theme for Gordon when rectifying do-it-yourself search, negotiation and financing disasters.
“I see it more and more, they always seem angry, frustrated and appear embarrassed that the situation about the “perfect apartment” has gone differently for them.”
Another example, many people try to cut back on search fees by looking on their own (there is no MLS in France
What is it that makes normally rational, financially savvy people make these kind of financial decisions?
Some enter the market with an over-confidence that stems from experiences in their own country and the illusion that the same approach will work here in France
The question is…is there another way to approach investing in Paris and France, and find real and lasting property bargains?
Gordon answers it this way: “The key to purchasing here in France is preparation and following a fairly explicit critical path to acquisition…getting your requirements and needs defined early on…your financing with a French financial institution (if you are seeking a mortgage) in place prior to your first offer…and having the patience to wait until the right property is presented to you, or even a property that might have been on the market for a few months (it’s possible, although most desirable apartments go reasonably fast)…an experienced professional would have the capability to track this for you…M D G – F R A N C E ensures that you are not seduced along the way.”
In general, some simple rules apply to buying apartments in France
Finally, as a rule of thumb: if you are not an expert in a particular field associated with buying property overseas and do not have the time to become one, it is usually well worth shelling out for the savings in the long run. (less running around looking at properties that don’t meet your criteria, lower sales prices, less funds place in escrow for deposits, better terms, interest rates and lower bank fees, reduced settlement charges, experienced renovations, etc…)
Quick, impulse selections can become nagging projects with hidden expenses in the long run if you don’t know what you are doing and have done your research properly.
And if you still cannot find a reason to approach your property purchase here in Paris or France with an intermediare firm such as M D G – F R A N C E, at least remember the time-honored proverb: When spending money always invest in good shoes and a good bed- because when you’re not in one you’re in another. Chirac would surely agree.
