From the Inside
Five years working in the French property market.
Here's what I saw.
How Are You Budgeting For Your French Property Search?
Why it might be different from budgeting for a property back home
You have an idea of what your all-in spend should be. For the purpose of this post let’s say it is €500,000. But what does that number actually mean in the context of a French property search? Let’s break it down.
You’ll have the negotiated purchase price of the property you buy, plus the additional costs you’ll incur on the transaction. Does that mean your search should be limited to properties priced at €500,000 minus estimated additional costs? Probably not, and here’s why.
Pricing in France is less consistent than in most developed property markets
That is made worse by the fact that there is no single online platform where you can view everything at once. Outside of big cities, price per square metre is not a reliable way to compare properties.
If you are experienced in your home market you can probably look at Rightmove, Zillow, or whichever platform you use and get a reasonable sense of whether a property is priced to sell or listed at an optimistic price. Part of the reason you can do that is because those platforms let you compare properties easily and show you the precise location.
In France neither of those things is true. You won’t know the exact location of a property until a viewing is confirmed. You won’t be able to see all similar properties in a given area in one place. And you generally can’t rely on how long something has been listed, unlike platforms in other countries, when a French property moves from one site to another it typically reappears as a brand new listing with no history.
What this means in practice is that when you search French property websites you will encounter a mix, properties priced with a foreign buyer premium, properties priced to sell quickly, properties at fair market value, and properties that are genuinely undervalued. Even experienced buyers in their home market find it difficult to tell which is which in France. Your search budget needs to reflect that uncertainty.
You cannot bid over the asking price if it is listed with an agency
This surprises buyers from markets where competitive bidding above asking price is common. In France it is not possible. The asking price is the ceiling for properties listed with real estate agencies.
However, the flip side is that prices in France are generally more negotiable than most international buyers expect. There is no standard discount, no rule that says 10% off is normal or expected. But over the years we have seen buyers miss opportunities simply because they didn’t believe a seller would accept a significantly lower offer. Some will. Some won’t. The only way to find out is to make the offer.
The first property I bought in France sold for less than 50% of its listed price. That is far from typical, but it illustrates the range of what is possible when you understand how the market works.
The additional costs
The purchase price will not be your only cost. Notaire fees, which include French property taxes, are payable in addition to the purchase price. Depending on the property and your situation there may be other costs on top of that. And if you are making a permanent move there will likely be personal costs too; removals, furniture, and so on.
Some of those additional costs can be anticipated if you ask the right questions early enough. For a full breakdown of everything you might encounter, from purchase through to ongoing ownership, we have written a detailed guide which you can find here:
So what does this mean for your search budget?
Even after accounting for additional costs I would still suggest searching above your €500,000 ceiling. How far above depends on the type of property and how much work you are willing to take on.
At the lower end of the market, particularly for fixer-uppers, the gap between listed price and what you might actually pay can be considerable. If you are looking to spend €50,000 I would look at properties listed up to €100,000. As your budget increases, or your appetite for renovation work decreases, the percentage flexibility tends to reduce, though the numbers can still be significant. If you have a €500,000 budget and are not looking for a project I would search up to around €600,000. At the higher end of the market the percentages are smaller but the numbers are larger, it is not unusual to see a chateau listed above €3,000,000 eventually fall to closer to €2,000,000 after the market has been tested over time.
What budget should you give the agents?
Generally you only need to show proof of funds once an offer has been accepted, so if you want to keep your cards closer to your chest at the search stage you can. Whatever figure you give an agent, expect to see a selection of properties slightly outside that range, probably within 10%.
Maximising your budget through buying direct from owners
If you want to make the most of your budget, one option is to look for properties listed directly by the owner, or to find the owner directly if a property is not on an exclusive mandate with one agent. Agency fees in France typically run between 5% and 10% of the purchase price, which on a €500,000 budget represents a potential saving of around €25,000. If you’d like to understand more about how that works in practice we have a guide available here:
The certainty of your financing matters
As in most markets, one of the biggest factors in getting an offer accepted, and negotiating a good price, is the certainty of your financing. Cash buyers are in the strongest position. Buyers depending on a mortgage or on the sale of a property elsewhere can absolutely get deals done, but it typically takes longer and limits negotiating leverage.
If you are working with an agent, they will usually ask both buyer and seller to sign a Letter of Intent once an offer is agreed, effectively committing the seller to you as the buyer. If your financing subsequently falls through, the seller will have lost potentially months. Unlike some markets where an offer remains relatively informal and a seller can accept a higher or more certain offer in the interim, in France this becomes much more difficult once the Letter of Intent is signed, which typically happens within a week of offer acceptance, even if the compromis de vente is not signed for another six weeks.
For a more complete picture of the French property purchase process, including the things most real estate agent guides don’t cover, our book is available on Amazon here: