Selling Your French Property
Tuesday 01 December 2009
The first and most important point to note is that only registered estate agents with a carte professionelle granting a right to undertake transactions sur immeubles et fonds de commerce are permitted to sell properties.
Accordingly, managing agents with a carte professionelle are not permitted to engage in the sale of property.
Nevertheless, you will come across self-employed agents commerciaux who are affiliated to one or more estate agents. This practice is perfectly legal, provided the property is sold through the auspices of the registered agent, and that it is the registered agent (or notaire) who processes the sale contract and holds the deposit.
The deposit must be held in a third party account and be guaranteed by a third party financial guarantor such as Société de caution mutuelle des professions immobilières et foncières (SOCAF). This body guarantees reimbursement of any funds deposited with them for purchase.
The name of the financial guarantor must be displayed in the agents office.
Mandat de Vente
Once you have chosen your estate agent(s), you will need to enter into a contract with them called a mandat de vente.
Not only must the contract be in writing, but it must also take a particular form.
A contract that is not in writing, or that does not comply with the essential requirements of the law, is invalid.
This document should be distinguished from a bon de visite which is merely a record that an agent has introduced a property to a potential seller. Without being accompanied by a mandat de vente, the agent has no right to any sales commission.
If you sign a mandat outside of the offices of the agent you have seven days to change your mind. The mandat must also make this clear.
You must also be provided with a copy of the mandat, which should include on it the business registration number of the agent.
If you do sign and change your mind within seven days, then you need to notify the estate agent in writing (normally by sending signed tear off declaration to this effect) by a letter sent recorded delivery.
The mandat must also be signed prior to the sale taking place.
Estate agents in France do not differ that much from their other European counterparts in a tendency to sometimes offer prospective clients inflated valuations in order to obtain instructions.
They do so in the reasonable knowledge that, at some point, the client may be forced to accept a lower valuation, either because no offers have been received, or offers have been substantially below the asking price.
However, do not always assume that an inflated valuation has been given, or is necessarily in the interests of an estate agent.
Estate agents only earn their living if they actually sell a property and it is not much good to them if they overvalue a property and never sell it!
The overhead costs of running an estate agency are not inconsiderable and to survive many agents rely on a high turnover of properties. One reason why, in the current market, many agents are having to ask many clients to reduce their price aspirations.
It is quite likely, therefore, that in a difficult market estate agents will value at the lower end of the range, but whether or not the client accepts their valuation is another matter!
In fairness, the valuation of rural properties (in particular) is a difficult task, as the absence of a satisfactory number of comparable sales of similar properties makes it difficult to be precise about the market value of a particular property.
This makes it even more important that you research the area thoroughly to find out about the level of prices.
Standards do vary considerably in the level of information provided in the written property details, so this is something you need to discuss with your agent.
While estate agents must not provide misleading or inaccurate information, they are under no obligation to describe in any detail the properties they have for sale.
Some agents now adopt the general practice of providing detailed property descriptions, but many still only offer only a few lines, where details of room sizes, condition, or precise location are absent, or are only covered on a summary basis.
The same is often the case with photos, which may be few in number, taken from a bizarre angle, and of poor quality.
One of the reasons why the property details are often short is because agents are not generally given exclusive rights on the sale of the property and will not want to give away too much for fear that sellers may simply bypass them.
The mandat must indicate the level of the commission that will be payable, and just who will pay it, the buyer or the seller.
A contract that does not clearly state the percentage level of commission is invalid.
The commission level is also entirely a matter for negotiation between the estate agent and the seller, contrary to popular belief on this point. It is only payable if and when completion of a sale takes place, to a buyer who has been introduced to the property by the agent.
However, if you have entered into an exclusive contract with the agent, then the agent is due their commission, whether or not they introduced the buyer to the property.
Although the contract may state that the buyer is to pay the commission, once again, this is something to which the buyer cannot be held, as they are not party to the contract. It is entirely for negotiation at the point of sale.
Where all the conditions in the sale contract are fulfilled, but the sale does not subsequently proceed to completion, then the agent is still entitled to either their commission or damages, depending on the circumstances of just why it did not proceed to completion.
French courts have established that where the seller deals directly with a buyer who has been introduced to them by their agent, in order to avoid paying the commission that is due, then it is more often than not the seller (not the buyer) who is obliged to pay damages and interests to the agent.
The mandat must be time limited, or it is not valid.
However, the contract can be renewed automatically, so you need to be aware of the anniversary date of renewal to ensure you provide notice to the agent if you do not wish to continue with their services.
An exclusive mandat can also be renewed automatically, but must be time limited to three months renewal. You will find that you often need to give 15 days notice to terminate the mandat, or it may be automatically renewed.
An estate agent in France can be both an agent on behalf of a seller and a buyer, enabling them to obtain a commission from both the mandats, although the practice is not widespread.
You can read more in our guide to Buying Property in France.
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