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How to sell realty in France ?

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How to sell realty in France ?

The realty agent’s obligations

The role of a realty agent is to intermediate between two parties or more in order to carry through to the “acte authentique” a realty sale. The « Loi Hoguet » 70-9 dated 2nd January 1970 regulates and controls the process, in virtue of its decree to implement dated 20th July 1972. The agent must comply with several obligations, and notably:

- Subscribe to professional liability insurance
- Hold a “carte professionnelle” delivered by the “préfet” and renewed each year.
- Have at his disposal a financial guarantee through a bank or financial organization (article 17 of the decree dated 20 July 1972),
- Be in possession of a written mandate authorizing him to act on behalf of an owner.
- Display a number of legal documents:
- The number of his “carte professionelle”, the sum of his professional liability, the name and address of the credit agency, and the account number into which payment of funds shall be placed.
The brokerage contract guarantees the agent’s obligations to the owner seller.

The obligatory brokerage contract

The brokerage contract is mandatory, and must be signed by both the seller and the realty agent. Once signed, the realty agent shall represent the owner seller and has the assignment of finding a buyer in order to bring the transaction to a successful conclusion. The brokerage contract defines the limits of the realty agent’s assignment, as well as the sum of the remuneration. The brokerage contract thus guarantees the conditions in which the property is sold and specifies the sales price. This has been determined through consultation between the owner seller and the realty agent. The realty agent’s fees will not be asked for from the buyer until the sale has been brought to a successful conclusion. The brokerage contract is required for it fixes the conditions under which luxury realty is to be put up for sale.

Two types of brokerage contract exist

- The “mandat simple” which allows the seller to entrust the transaction to other professionals or to sell by his own means.
- The mandat exclusive which binds the transaction to a sole realty agent.
Brokerage contracts must have a time limit, fixed generally at 6 months.

Agency fees

The realty agent is also controlled by measures provided for by the « code de la consommation » by decree dated June 29 1990 relating to public awareness of the tariffs charged by professionals in realty transactions.
Realty agency fees are unrestricted and have been since 1987. The sole requirement is that the applied fees be displayed as a percentage, visible at the entry to the agency. These are presented tax inclusive.
Realty agency commission rates are unrestricted; in realty agencies in France they vary on average at between 4% and 10%. Paris Ouest Sotheby's International Realty apply a rate of 5% despite the incomparable marketing tools and unique international showplace that we alone can offer.