Yesterday was a red-letter day Chez Nous, in that we acquired a second "chez" -- we closed on the purchase of a delightful little 1-bedroom apartment in the heart of Montmartre. As Georges pointed out to me aftward, this marks the beginning of my entrée into the French real estate market.
I've learned a few things about real estate transactions in France since being with Georges, because I was sort of an "active spectator" during the months two years ago when he decided to put his house on the market. I say "active spectator" because I wasn't an owner of that house so had no legal involvement, but I was often the one who was home when the agency people came with prospective customers for visits and I was therefore the one who had to keep the house neat and clean. Then there was the packing and moving that followed. So, I did my part but it was limited.
This time around, I have been really involved. I did all the initial home search legwork online. I got brave enough to contact agencies and go on first visits tout seul (my French really must have improved when I wasn't noticing, for me to be willing to do that) to narrow down the prospects for Georges and I to consider and visit together. He, being the French one who speaks the language and understands the entire process, had to do the detailed negotiating and asking all the pertinent questions about the properties, and he made the offer and handled all the preliminaries. When it came time for the notaire to get involved, he had to read through a huge stack of documents, including detailed home inspection reports. In Montmartre, not only do you have to worry about lead paint and asbestos like everywhere else in town (our apartment has neither), but because this part of town sits above old quarries, many of the buildings have the potential for structural issues because of the risk of sink holes underground. In other words, geologically speaking Montmartre is like the California of Paris -- one tiny shift below the surface and the entire place could disappear into a big black hole. I also learned that the apartment is in a classified historic district (cool!) which means we (the collective owners) are not at liberty to make major exterior changes without first getting approval. Not that we'd want to; the building's exterior is perhaps unremarkable -- it's only 3 stories high and very plain -- but it's so typically Montmartrois that I'd never want to change it.
For those of you who have never owned property in France and who might be curious how the process tacks up compared to how it works in your country, here's how it went for us:
1) There is no Multiple Listing Service in France, so looking for an apartment or house means you have to check with individual agencies, and the same apartment can be listed with multiple agencies, each of whom probably have different descriptions, photos and even prices for the property. Agencies only represent sellers, and although there ARE professional property-finders who will work with a buyer, you'd have to pay them and it's not cheap. To say this is frustrating and a bit scary to a potential buyer is a huge understatement.
2) The Internet is your new best friend in this respect, because most agencies will have web sites of their own plus they will list properties with web sites like SeLoger.com or avendrealouer.fr which provide free real estate search capability across a broad spectrum of agencies. There is also PAP.fr which is a for-sale-by-owner site -- that's how I found OUR apartment, although it was also listed with an agency or two. It's the closest you'll come in France to an MLS. Although I periodically would stand in front of agency windows to look at some of their current listings, my time was more efficiently spent online doing searches based on our criteria (neighborhood, price, number of bedrooms, square meters, etc.)
3) You will go on a first visit and probably a second before you make an offer, but it is not unusual for potential buyers to visit a property three or more times before making an offer. The couple who bought Georges' house not only came three times for visits before submitting their offer, but they also sent four different contractors for visits so they could get estimates of the work they wanted to do. In the US, homeowners/renters are usually asked NOT to be present when an agent is showing a property but in France it's more normal for the person to be home, and for the prospective buyer to ask direct questions (Does the roof leak? Are the neighbors nice/noisy/horrible? What do you pay for utilities? How is the co-prop/association?)
4) Once you and the seller agree on price, you will each have to contact your notaire. A notaire is NOT like a notary public in the States; they are much closer to being an attorney. In France, notaires handle things like real estate transactions, marital pre-nups, and other similar types of legal matters that don't involve going to court. It's actually a pretty big deal to become a notaire here; and to have your own cabinet (professional offices) is very difficult, because there are a limited number of notaire positions in France. If you go to school to be a notaire, chances are you will end up working in someone else's cabinet for years, hoping that they will retire or die and that you'll be the one permitted to fill the void. The woman who handled our contrat de mariage and who handled Georges' (and now my) real estate transactions isn't even the one whose name is on the cabinet's letterhead. Anyway, once you get the notaires involved, they coordinate with each other to exchange, review or prepare all the necessary documents having to do with the property. They do the French equivalent of title searches, get all the inspection reports (the seller has to pay for those; in our case the guy had them done in September when he decided to sell, so we didn't even have to ask or wait for that). It's the notaire's job to look out for his or her client's best legal interests and to red-flag anything that doesn't seem correct. Georges' notaire seems to do a pretty good job from what we've experienced but just as with all professionals in all professions, there are good ones and bad ones.
5) Things moving slowly in France, more slowly than in the U.S., and you have to brace yourself for this. When I bought a condo in New Jersey some years back, I think the entire process from offer to closing took about 2 months. When I sold that same condo five years later, I think we got it down to about 6 weeks (I was also lucky that I got a full-price offer from the very first person who walked through the door of the open house the first day the property was officially on the market). When Georges sold the house, I think it took closer to 3 months. And for closing on the apartment we just bought, we didn't need a bank loan which sped things up considerably, but it still took about 6 or 7 weeks which was something of a miracle. I think both parties were eager to close before the holidays and as the notaires didn't find any legal issues to hold things up, and no bankers were involved other than Georges arranging for payment, we really lucked out all the way around. Normally it should have taken at least 3 weeks longer. Suffice to say, if you have a difficult seller or an inefficient notaire, if you're planning to do construction and need special approvals from a co-owners association or the town hall, if you need bank financing, or if there are any sticky issues whatsoever with the property that surface during the process, you can expect delays of several months before you finally close the deal. Stock up on aspirin and wine to get you through it.
6) Before we met with our notaires to do the official "promise of sale" contract, Georges and the buyer met on their own to exchange mutual hand-written letters of intent. (Side note: We actually didn't meet the owner or the tenant during our two visits, even though this was a for-sale-by-owner deal; the owner had his niece showing the apartment, and this proved to be advantageous as she was probably more free with information than her uncle might have been, such as that he was in a big hurry to sell before a certain real-estate law changes in February -- something that is causing some investors to want to unload certain properties quickly so they don't get hit with a huge capital gains tax later on when they sell. It's complicated but it doesn't actually affect us at all; suffice to say the niece gave us the impression he'd be flexible on price negotiations. Good to know, right?) One thing to know about France is that they place a high value on hand-written documents in nearly all formal matters; it is even common practice here for employers to do handwriting analysis on prospective new hires! So Georges gave the seller his letter stating his intent to buy the property for X number of euros, and the seller reciprocated with a letter stating his intent to sell that property and that he would not accept any other offers. That made them both feel secure before the notaires took over to make things more official.
7) We met with the buyer and his notaire at our notaire's offices twice: the first time to review the entire proposal and all related documents (see the 3-foot high stack of papers on top of Georges' dresser for details). Our notaire asked for additional documents; the other guy's notaire made phone calls and had them faxed or emailed over. They made copies of all our official ID, and in my case they needed both my passport and my French residency card since I'm a foreigner. In the official promise of sale, it lists for each party that person's complete life history: where and when born, and if married/divorced/PACS'd and with whom and when. I was surprised they didn't want blood and urine samples to go along with the history. We did a complete read-through of every document, with the notaire noting changes requested by one side or the other (in our case, this was limited to very minor changes, there were no deal-breakers). Then our notaire went out to work with a typist to update the official promise of sale; this took almost a full hour, during which time me, Georges, the seller and his notaire sat around and chatted while foraging for sustenance (it was nearing lunch time). They were interested in how the process compared to the American one, and I told them that overall it was roughly the same although like everything else in France things tend to take longer and be more complicated here.
Finally our notaire came back in, we walked through the changes all together, and then it was time to sign and initial. Every. Freaking. Single. Page. All three of us: Georges, me, and the seller. We got into a pretty good rhythm: our notaire would hand a page to Georges and say either "signature" or "paraphe" which means "initials". He'd do whichever, then pass it to me and I'd do the same. I passed the page to the seller and he'd mark the page then pass it to his notaire to collect. This went on for approximately 150 pages and 30 minutes.
We then looked at our calendars to set a closing date based on when the notaire felt everything could be ready, and fortunately in our situation we could pull this off more quickly than normal so we set this week as THE week (precise date to be determined later).
Then we just waited. Oh, yes... we had 7 days to back out of the deal. After that, we were legally committed to buying the apartment and the seller was legally committed to selling to us.
8) Last week Georges heard from his notaire that the closing date would be Thursday the 15th, which turned out to be perfect for Georges with his work schedule. We went to the the bank on Saturday and Georges arranged to have the funds wired to the notaire's account to be held until the closing, sort of like escrow. He also got the bank to give him a letter stating the origin of those funds (i.e. from the sale of his prior residence) because in France, they are actually a bit suspicious of people who can pay full price and they want to know the money didn't come from illegal activities! (The first time I went on a visit and said that we'd be able to buy without a bank loan -- assuming this would be considered a GOOD thing -- and the seller asked if we could prove where we got the money from, I was stunned! So if you're playing to buy over here and you won't need a loan, be prepared for this line of questioning and the need to provide proof.) So yesterday we all reconvened at the notaire's office to pretty much repeat the same process all over again (document walk-through and a lot of signatures/initials only perhaps not quite as many as the first time) except for the part where money changed hands at the end. The seller's notaire did a prorata calculation of taxes, rent paid by the current tenant, and other charges, so we ended up getting a small check from the seller and the seller's notaire got the BIG check from our notaire.
And voila! We all shook hands, said good luck and happy holidays, and it was done.
Georges has since contacted our new locataire to introduce ourselves, to let her know we were happy to have her there and that we don't intend to make any changes to the current arrangement (her lease is up next fall, and although SHE may opt to move out sooner WE cannot ask her to leave as long as she pays her rent, and in France you can't evict someone during the winter months anyway, even if they don't pay!), to provide her with our contact and bank info so she can arrange a monthly wire transfer of the rent (the French are very big on wire transfers and they're very easily done here), and to invite her for a coffee or drink at her convenience because we want to set a friendly tone. This morning we received a very pleasant response from her and it seems we are all off to a very good start together. We hope she plans to stay at least until the spring because it makes life simpler for us at the moment (given that we are about to start hunting for a new apartment for ourselves as well). Eventually we'll use this space for vacation rental as it's absolutely ideal and that's what we had in mind when we bought it; it's just convenient in the short term that there's a regular rental income already in place, at least for the first few months.
So there you have it... a peek into one couple's foray into the real estate process in France. Hopefully we'll have a good experience as landlords and investors. I like the idea of having some supplemental rental income, especially as we near retirement, and wouldn't mind eventually having 2 or even 3 such properties if circumstances should make that feasible for us at some point. I've always been fascinated by the idea of investing in real estate, and thought of doing it back in the States but was never able to pull it off; how ironic I should end up doing it in France after all! Honestly, though, if I didn't have Georges doing it with me, I don't know that I'd be willing to put myself through it. As improved as my French may be, it's not up to understanding all the legal terminology! (Mostly I just looked at him and said, "It's OK? I can sign it?" -- something I would never have done back in the States where I would have insisted on reading every word before signing anything.)
When we had all signed the last document, I looked at Georges and said, "Did we just buy a small apartment... or a nuclear power plant?" Because THAT'S how much stuff you have to deal with to buy property here.
I wasn't planning to show photos of the apartment, but I happen to have a few that the seller had taken just AFTER he had finished doing his renovations and decorating, before the tenant moved in (believe me, she's got a lot more stuff all over the place and it looks clean but LIVED IN, if you know what I mean). We bought the place furnished and equipped so what you see here is essentially what stays, although I expect we might make a few cosmetic changes when the time comes.
View when you enter the main salon/kitchen combo. Kitchen at right behind the breakfast bar. Sleeper sofa. Floors in very good condition! Three windows facing onto a quiet street that is blocked to through-traffic.
Another view of the salon from the kitchen, looking into the bedroom. Also off this room is the separate WC. Shower room is through the bedroom.
"American" kitchen (meaning open to the room instead of closed off in a separate room, French-style) comes with a half-fridge and clothes washing machine. I think we'll add a combo microwave/oven later, but otherwise it's a very nice little kitchen, very workable for short-term stays.
The bedroom is small but comfortable; that's a queen-size bed, and the room opens onto a quiet courtyard below. The clean white-tiled shower room is just to the left of the window.
The entire apartment was renovated and updated just a couple of years ago so everything was in very good condition. At most I think we'll end up doing a fresh coat of paint and perhaps swap the drawer units in the salon for a full armoire to improve the storage. Otherwise it's pretty much move-in ready... well, once the tenant moves out!
Wouldn't this be the perfect Parisian home-away-from-home on your next vacation?
