PS for some reason I think I saw somewhere in past couple of weeks on a sizeable property, which yours would be relatively, the percentage is commonly negotiated down to 1.5%, maybe even less if huge? Or am I dreaming
But all that is irrelevant to the seller, at least from my experience.
I have sold 3 and bought 4 houses in France and when selling you agree how much you are prepared to accept and that is what you get as the buyer pays the agent, notaire etc. When buying the buyer pays all the add ons and when making an offer the advertised price includes the agents fees which is why I said earlier that a hefty agents fee inflates the marketing price.
If you want to sell soon and move on then you will have to differentiate between what you need and what you can get which is usually the latter.
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We are currently paying 4% to the agent selling our second property
It used to be that the buyer pays, but these days it is more common that the seller pays.
Comes to the same thing really! If the buyer pays then the price of the property is reduced by that amount, and the advert states there is x% on top for agent. If the seller pays then you advertise the total amount but state it includes cost of agent.
Either way the cost of the agent must be transparent.
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“For a start, I’d bet there’s TVA (VAT) on top of that %”
In Leggetts case, its TTC.
Its a question of both finance and perception.
If the agency fees are included, the purcharser pays slightly higher notaire fees but can include the cost in their borrowing price so works out ok. But they may have the impression they’re paying for a service mandated by the vendor.
If fees are excluded, notaires cost is slightly lower but the purchaser does not have this perception of paying for a service they did not “benefit” from.
This is quite an anglo saxon way of looking at real estate transactions but I know is gaining more ground in France, above all in my previous field of commercial real estate, I was not aware it was becoming an issue in the residential market.
When we bought our house 9 yrs ago, there was no question that we would not pay the fees, and all the brokers we have spoken to recently have said the fees are still systematically passed onto the purchaser.
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Just make sure that this is how the property is advertised… that the Buyer does pay the Agency fees… and that this is in your written Agreement with Leggett.
Ive just looked at 3 different English language webites commenting on the French residential market and all say that 5% is the average for a higher value property.
So I’m going to see if I can get them down to this particularly as the agent has just written me that activity has slowed since the outbreak of Ukraine war and there is no rush to get on the market.
Whereas, we have to balance between maximising value and wanting to move in a reasonable time frame, so competitive fees could definitely make the difference…
Not sure you are understanding the process, or is it me?
The notaires fees are based on the sale price of the property not the agents fees.
I wish you good luck in selling your property but I doubt you will have buyers queueing up if the agents fees are 1% less
Brexit and then covid has seen many casualties in business and investment as you well know, it has exposed the fragility of many business ventures. Time to get what you can and move on, life is short.
If the agency fees are considered to be included in the sale price of the property (FAI) then you will pay the Notaires % and government taxes on the whole price including the agency fees.
However, if, as we did when we bought our house, we signed a mandat de recherche to pay the Agency fees in place of the seller and these were therefore deducted from the price, we effectively paid 15 000€ less for the property and this amount was therefore not subject to the Notaires fees and taxes.
This was often the way that fees were transfered to the purchaser in the past, even though it was the seller who had mandated the sale and signed the contract and it is still fairly common practice, at least around here, from all the agencies I know.
That’s not correct. The notaire will/should remove agency fees plus any agreed fee for fittings - before calculating tax etc.
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Agreed!
Here’s another better explanation in French, according to Se Loger.
This is the way its always been explained to me and I would be astonished if Se Loger had it wrong but if someone finds a contradictory text, I’ll be happy to see it.
This happened to folk in my commune… but it could be anywhere…
Very important to get details clearly written and understood before signing anything.
The Agent assured the Seller that the Buyer would pay the Agreed Price plus Agency Fees
The Seller signed a document “thought/presumed” to say just this…
The Advert gave the agreed price and said that the Seller would pay the Agency Fees.
The Agent subsequently assured the Seller that the Advert was in error and would be corrected.
The Advert remained uncorrected.
The Agent said the Agency Office would correct things at Sale time…
The Notaire said that the Seller had signed an agreement to pay the Agency Fees
The Seller had to pay the Agency Fees which were quite substantial…