Bram van Zanten,  Tuesday, 17 November 2015

The pitfalls of buying property in France

Between 1993 and 2015 we bought several houses in France. We also assisted many Dutch compatriots who bought a home, by giving them legal guidance and by taking care of the inspection of the property.

We have encountered many situations that are potential pitfalls, both in our property transactions as in those of our clients. We mentioned these pitfalls over the years on our blog, but we have summarized them below for readers with little time:

1. Impulsive purchase.

The candidate buyer is property hunting without a well-thought checklist, falls for the first available home (love at first sight), places a much too high bid and is left dealing with the consequences:

* the neighbors have 13 hunting dogs but were hunting during the viewings

* the neighbors exhibit antisocial behavior

* the location of the house appears to have a particulate climate with 50% more rain and fog than in the valley on the other side of the hill

* The farm is located in an area designated as urbanization, over ten years it will be surrounded by new housing estates

* there is no waterworks, but a well that even in very dry summers provide enough water, but that is dry during the first holiday in the purchased house.

You can avoid all of these problems (but not the DDT!) by using a checklist and a structural survey.

2. Buying through a broker.

Yes, I call it a trap, because they are unnecessary and cost (too) much money, money that can be saved by house hunting on your own. There are many PAP (Particulier à Particulier) websites. Note: More than half of all real estate transactions in France are private sales, and that percentage is growing.

3.Assuming that nice cheap farmhouse on the website of broker X is still available.

Often I have welcomed tenants/house-hunters who came for nothing because the farm they were interested in was already sold, but remained as a teaser on the website.

4. The first offer is too high.

In the Netherlands, the buyer is often happy with a contract price of 10% below the asking price. There are regions in France, however, where the difference in asking price and final price can be as high as 50% in the current property crisis. Look especially how long a home has been for sale. Is it for years then a much lower final price is possible.

5. Buying of land that has not yet been surveyed by the registry.

Note that a surveyor is often more expensive than the value of the land, so consider buying registered plots.

6. Buying a fixer-upper when you have no more than six weeks of vacation per year.

An active vacation is fun when you know no time pressure. Assume that you will not get done more than 30% of the activities that you thought you could achieve in the time available. Unfinished refurbishments can cause relationship problems.

7. Buying a fixer when a fixer is not the ideal property of both partners (see above).

8. Wanting a much land, when you do not need it.

Many Dutch compatriots give up around their 70th because the gardening becomes too much. A day on the mower seems nice but eventually becomes a task. Buy uninterrupted views over land that is maintained by another person, rather than the land itself.

9. Make a bid without knowing the Dossier Diagnoses Techniques and without a construction inspection.

Inspections and DDT almost always lower the price. But after the sale has is agreed, an inspection or DDT can’t be used to lower the price.

10. Buying a house with borrowed money.

If you get into financial difficulties, your property in France becomes a millstone, and you are forced to sell it at a considerable loss. Prices in many regions in France are still 30% below the 2007 level.

11. Thinking that you can live from the rental income of the property.

There is an oversupply of Gites and Bed & Breakfasts in France. Only the highly successful owners can earn a real living. As an extra income, it’s, of course, no problem. We lived a few years in France by renting out two cottages, with an exceptional cast of 34 weeks per year in a region where 10 to 12 weeks is already considered good.

12. Buying a home in France without speaking the language.

Seems obvious, but the number of Dutch, even who live there permanently, who don’t speak French are at an alarmingly high. You will never integrate. Not terrible for a holiday, but if you want to live permanently in France, it’s a big problem.

13. Buying in a neighborhood or region you don’t know.

Big risk! That can be a letdown! Always rent a home during a certain period to get to know the region.

14. Buying in an area with only softwood.

During sunny viewings an ideal place, but for many people softwood is depressing in cloudy and rainy weather. It can be very foggy in large coniferous forests. It's a biased view, but the number of people that share this feeling is pretty high. A deciduous environment changes much stronger during the seasons and thus provides much more (positive) impulses.

15. Buying a property in France without knowing the inheritance consequences when there are children from previous relationships.

Stepchildren are utter third parties for a stepparent in France with the result that they have to pay 60% inheritance tax to pay on the market value of the house. There are ways to prevent this. Consult an expert blogger. Note. Many French notaries will warn you about this.

16. Buying a house without being married or without a cohabitation agreement.

The same as in paragraph 15: 60% inheritance tax. Again this can be avoided.

17. Servitudes.

A right of way (Droit de passage) is the servitude that can cause the biggest problems. If you have the choice between a building with or without this servitude, always select the property without it.

18. No social control.

Found a perfect property with 100% privacy? They become a nightmare after thieves visit the house a few times. Unfortunately, this happens in the countryside too common. Thieves prefer places where they can arrive, plunder and depart unobserved. If the harvest was good, they come back next year.

This is most common in places where the escape is easy and less at a dead end, where permanent habitation is present at the angle to the road.

On my personal checklist "social control" is at the top of the list.

19. Not meeting the neighbors before the sale.

Many people don’t check out the neighbors. Very unwise, because it can make or break your future living pleasure.Not a good feeling about this neighbor? Do not buy!

20. Frost resistant.

Do you know how cold it may be in your home during the winter? In the High Morvan, we sometimes have very severe frost. If you do not drain the water pipes completely, copper pipes may freeze, resulting in water damage in the spring and especially broken thermostatic valves. Often you can just empty the entire network with a compressor. Leave the shower head in the bathtub or on the shower floor. Don’t forget to make a winterizing checklist (also disconnect and drain the washing machine and dishwasher).

21. Letting your farmer-neighbor use your pasture without a return.

If a farmer uses your land some years without having to give something in return, you create a customary right that can’t be taken away without any problems. If you ask e.g. money for the hay, there will be no customary right. Ask your solicitor for other options to avoid this.

22. Unexpected annual charges or increases therein, taxe d'habitation and taxe fonciere.

ALWAYS ask before you buy. An increase of these taxes is not foreseen shortly. However, these charges always go up sharply when changing the destination of a building or parts of the building. For example making a living room in the house, changing the agricultural destination into a residential one.