Real Estate Buying and Selling Costs in France

The process of buying and selling real estate in France is usually carried out between a buyer and seller with the assistance of persons familiar with the process. These people usually include a real estate agent, a notaire and a legal advisor.

Licensing protocols for real estate agents

Every property agent in France or agents immobiliers is legally bound to possess a license, issued by the prefecture of residence. The license entitles the agent to process the sale of a building. Persons engaged as property search agents or marchand de listes and property managers are also required to be registered and become members of a recognized estate agency.

Buying and selling costs

Costs can be reduced if a buyer deducts the fees payable to say an estate agent and a notaire from the sale price of the property and pays the two agents directly. If for example, they both charge 10% for their services on a $100,000 deal, the agent will get paid $10,000 while the notaire will be paid 10% of $90,000 thereby saving $1,000.

Selling costs

Aside from this the main selling costs comprise:

Notaire’s fees – these are always the responsibility of the purchaser to pay and they include registration fees, stamp duties and government taxes. Total fees here are approximately 6.7%.

Sales commission – this is charged by the agent and is normally included in the sale price and paid by the seller. It should be noted that separate fees for property viewing, negotiations, contract explanations should not be charged, signing and assistance with utilities information should not be charged as they are all included in the commission fee. Also any suggestions of a “package fee” should attract questions as to why.

Tip purchases – can be used to reduce costs by taking them out of the sale price and paying it directly to the notaire.

Mortgage fees – if a mortgage is applied for it should be included into the repayments to spread out the burden of the cost.

Expertise fee – the combined number of diagnostic searches done on the house prior to the signing of the purchase contract.

Capital gains tax – If payment is required, the notaire will calculate and deal with the issue.

Bill payments – these consist of a final payment for electricity, telephone and water bills prior to the handing over of the building to the new owner. Final electricity, telephone and water.

A company may be required to provide removal services for furniture and household accessories and fixtures, which the seller needs to meet.

In some cases the seller will need storage space for his/her belongings before another house is located.

Buying costs

The main buying cost to the buyer include:

Notaire’s fees – these will normally include disbursements, taxes and various duties. The notaire is similar to a government tax collector who collects money for the government from real estate deals. The notaire’s fees range from 8% to 14% of the purchase price but much lower (as low as 3% for a brand new property.

Real estate searches – this charge will normally be paid to a property search agent or marchand de listes for services rendered in searching real estate that are available for sale, on behalf of the buyer.

Sales tax – this tax may be payable for real estate of less than 5 years old which has not been subject to a previous sale.

Commission fees – these fees are charged by the real estate agent for the purchase of real estate and are normally factored into the selling price. The fees range between 5% and 10% of the purchase price. In France, real estate agents are permitted to set their own commission charges and they may be paid by the seller or purchaser, but in most cases, the purchaser pays the fees.