Real estate agents in Paris

Buying property in Paris: Feelings versus finances

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In the hunt for residential Paris real estate, there are two basic motivating factors: emotional and financial. For most, the emotional component is much stronger than the financial. For Francophiles all over the globe, a pied-à-terre in Paris is quite literally a dream. [Contributed by Paris Living]

Buying property in Paris: Feelings versus finances

Parisian buildings invite us to share in the history of French culture. The architectural landscape in Paris is rich and varied, from medieval to Louis XIV, from Haussmann to art deco. Whether our preference is for exposed beams and terracotta tiled floors or elaborate mouldings and parquet, there are available properties in Paris from every era. Each is special, and owning one is sharing in the centuries of refinement of the Parisian home, its design and artistic sensibilities.

Still, crucial to long-term happiness with such a financial commitment is confidence in assessing the true market value and return on investment of a property in Paris. How can we assemble and analyse the proper current and historical data in order to make such an estimate? How can we be sure to avoid buyer’s remorse? There are several pieces of information that are crucial to this evaluation.

Buying property in Paris

Estimate the costs of buying a property in Paris

First and foremost, we need comparable sales figures. While in other countries, agencies would be able to offer prospective buyers the final sale prices of similar units, this is not a norm in France. The information is available, but must be requested by a professional real estate agency in Paris through the Chambre des Notaires de Paris, and at a cost. Instead, what most Parisian real estate agents will do is rely on the asking prices of similar units, which are misleading and extremely variable. While asking prices do give us some indication of the Paris real estate market, they simply cannot be used as accurate data for making a just calculation. Having an agent represent you as a buyer’s broker is the best way to get comparable figures.

Second and equally important, the overall health of the building, both structural and financial, must be properly ascertained. This is achievable through basic due diligence: poring over inspections reports (the seller is obligated by law to provide these prior to the sale); the homeowner’s association annual meeting minutes; the building bylaws; the original floorplans; and the financial statements from the building management.

From these we will learn a number of things. We find out what work is planned in the building and how much it will cost—for example replacing the elevator, repairing the roof or cleaning the façade. Depending on the number of units in a building, and therefore the number of homeowners contributing, this can get quite expensive. If the work has been voted for, but not yet begun, the seller will be responsible for the cost even if the work is done after the sale when they are no longer the owner. However, if the work is still under discussion and a vote is forthcoming, the new owner will assume the costs should the majority of co-owners vote to move forward.

Properties in Paris

There is also work over which the building will not be able to deliberate. We must therefore verify whether a building has adhered to current housing codes according to municipal law and made the appropriate updates: e.g. replacing lead pipes with copper, updating elevators to feature digital displays and automated recordings for the deaf and hard-of-hearing, and maintenance of the façade as dictated by the local mairie (city hall).

We will also learn if there are any ongoing legal disputes, the most common being that someone hasn’t been paying their monthly maintenance or other dues, and is being taken to court. According to a building’s bylaws, the legal expenses incurred may or may not be imposed on the other homeowners.

From the floor plans, we will learn what is structurally feasible in terms of possible future renovations. But we will also be able to see if previous owners over the years have undertaken illegal changes without approval from the homeowner’s association. For example, annexing a part of the hallway or creating a toilet where there is no waste line — these renovations are very common in old buildings. The problem is that the new owner inherits these issues, and settling them may be costly and time-consuming.  Sometimes the notaire (the legal professional who handles real estate transactions) will not approve a sale until such irregularities are resolved.

Regarding the fiscal aspects of ownership, luckily the annual property tax, the annual habitation tax as well as the monthly maintenance charges in most buildings are extremely low compared to cities such as London or New York.  However, for more expensive units, there is a wealth tax applied to the amount of the purchase price that exceeds EUR 800,000.

Parisian real estate

Find a qualified Paris real estate agent

Considering the scope of the investigation that is necessary to make the right decision, it is prudent to use a buyer’s broker—someone who advocates for you throughout the entire process. One must remember that for the agent, the difference between client and customer is crucial. The agent represents the seller, who is their client. As a customer, you are not given anywhere near the same degree of transparency. And while there are many wonderful, professional, quality real estate agents in Paris, there are just as many who have no qualifications or knowledge of property law, and will say what is necessary to close a deal.

A buyer’s broker will search everywhere to find the right property and, armed with all the information described above, confidently assist you in taking the next steps of formulating a fair first offer and proceeding to the negotiating table.

Contributed by Paris Living

Paris Living

Malindi Pender Corbel - Founder & Director of Paris Living   
USA: +1 (888) 533-8334
France: +33 (0)6 77 79 11 52
UK: +44 (0)20 3318 8594

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