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Ask Miranda: who pays the real estate agent’s fees when a property is sold in France?
Question: In a French property transaction, who pays the selling agency’s fee, the buyer or the seller, and is it negotiable?
Standard practice in France is that the selling agency’s fees normally amount to around 5% of the purchase price of the property. The fees are agreed between the seller and the real estate agent and specified in the sales mandate. They are then included in the listing price that buyers see when the property is put on the market. Look for ‘FAI’ on the property advert, which means ‘frais d’agence inclus’ (agent’s fees included)
The buyer then pays the agency’s fees when the acte de vente (title deed) is signed. Licensed real estate agents are forbidden from receiving their commission until the property purchase is finalized. At the end of the transaction, the seller receives the net amount of the purchase price, since the agent’s commission is already deducted before the seller receives the money, so effectively you could regard it as a shared expense.
It is possible for the sales contract to specify that the purchase price and the agency fee will be paid separately. The advantage for the buyer is that they do not pay notaire fees (stamp duty, land registry fees and the notaire’s own fee) on the agency commission. However, if you require a mortgage, be aware that banks will not usually provide financing to cover the agency fee if you pay it separately.
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