If you’ve been searching for French property for a while and find the system confusing, then you’re not alone. On the face of it things in France seem to work the same way as in the UK, Australia, America or Holland. Maybe you contacted an estate agent assuming that they had access to all property listings? Or did you think that they would represent only you in the negotiations and could share the commission of any listing agent? Unfortunately that is not how things work in France. Read on to find out more.
The first difference is that French vendors generally list their property with a range of agents and often even try to sell privately at the same time. In most countries a multi-agency listing means that the sole or joint listing agent(s) is/are guaranteed to get commission and the agent who introduces the buyer automatically gets their share. In France, however, 90% of vendors who list their property with agencies enter into non-exclusive listing arrangements (via a mandat de vente) with each separate agency and only the agency that sells the home gets the full commission. The others get nothing, not matter how many showings they did or how many advertisements they placed. And if the owner sells privately, none of the agencies get any commission whatsoever. I always wonder why estate agents accept this arrangement, but once something is a tradition in France, it’s not easy to change it.
You can imagine that this reduced chance at any payment diminishes the motivation of the agencies. An agent said to me the other day that if he doesn’t manage to sell a property after a a certain number of viewings he gives up on it and doesn’t promote it to house hunters anymore, especially if it’s far from his office.
French Estate Agency Commission Levels
This limited chance at remuneration also explains why agency commission is relatively high in France, sometimes even reaching a staggering 10% for lower asking prices. Each agency has different commission levels (agreed with the vendor), with agencies run by English speakers often charging the highest rates. Add to this the fact that owners regularly forget to tell all their agents that they’ve lowered the asking price, or even that they’ve have sold the property, and you’ll understand why you have come across the same houses at different prices or you have enquired about listings that turn out to have sold long ago.
Smaller agencies are often very open to reducing their commission once you start serious negotiations. They’d rather have the reduced commission than lose the sale to another agency and end up with nothing. Don’t hesitate to enquire about the agency commission. Although it’s agreed with the vendor, the commission is included in the asking price and in many cases is part of the negotiation.
Incomplete Property Details
The commission “lottery” for agencies also explains why on-line French property details rarely show the surroundings of a property or photos of the facade and don’t disclose the exact location. This is not the French being overly décontracté. On the contrary; it’s an (understandable) attempt at preventing house hunters or other agents from finding the property directly and ringing the doorbell of the vendor. And then there is the battle of the search engines. The other day, on a pre-visit for a client, I asked the agent why she had incorrectly listed the property as being in Saint Rémy de Provence instead of the actual location – a much smaller village 15 minutes away. “Ah,” she said with a big smile, “that’s because people are more likely to type Saint Rémy in a Google search.”
With more than 90% of initial enquiries from house hunters now being made online and the absence of a central or multi-listing system in France, the emergence of foreign-run property portals and aggregators is not surprising. Searching on English language property portals or foreign agency sites can be a great way to start your search and get a rough idea of the market in your desired area.
Although these sites claim to do a “free search” for you, they of course need to earn money. Most get a hefty share in the commission of the local agency if an enquirer they’ve passed on ends up buying a property. The buyer pays the agency commission as part of the purchase price and in a buyer’s market this commission is often negotiable. But keep in mind that local agencies that have to share with a foreign agency or property portal will likely increase their commission to compensate and you end up paying more overall than you would if you’d gone to the local agency directly. This hidden cost can mean that enquiring via a portal or foreign agency increases the overall price you end up paying. The portal or foreign agency however won’t have seen the properties or be able to tell your anything about them and they have not added any value to your search. Yet you end up paying for their involvement.
Foreign buyers in France often assume that the agency that has shown them properties will represent them during negotiations. In many countries that is how it works. In France the estate agent however does not have a specific duty to represent either the buyer or the seller in the negotiations. They are true intermediaries and are supposed to “facilitate” the sale. The vendor engaged them to get the highest price possible and agencies rely on their local reputation for getting more properties on the books. You therefore cannot really expect them to try and get you the lowest price possible, can you? Only an exclusive buyer’s agent, such as the members of national body the FNCI (similar to REBAA in Australia and NAEBA in the US), exclusively represent the interests of the buyer.
No matter how you end up buying your French dream home; transparency is key and “free searches” do not exist. Always check whether an agency is licensed and insured in France and don’t hesitate to ask about the agency’s commission or how any intermediary gets paid.
Sophia Mose is a licensed French Agent Immobilier. She runs PROVENCE SEARCH, a property search agency offering bespoke property search and acquisition
services in southwest Provence and the Côte d’Azur, including Aix-en-Provence, the Luberon, Alpilles, Cannes and Nice. Get in touch for an initial consultation.