Buying an apartment in Paris
Perhaps, you’re one among thousands of francophiles who have wondered about moving to Paris. From beautiful cafés and unrivaled food discoveries to its most admired museums and remarkable flea market finds, the city has won the hearts of tourists and residents alike.
Paris has something for everyone. But finding a home and making a life there are different things. Like anything, it can be wonderful or disappointing. It helps to be prepared, and to have expert help.
Buyer’s Agent
One key difference is that there are no multiple listing services (MLS) in Paris. That means individual real estate agencies list only their own properties, and can’t show you the properties of other agencies. You’ll be more likely to get overwhelmed, as sellers can list with more than one agency. So, the odds are your dream home may be snapped up even before you get the chance to know about it.
Without a shared listing agreement (MLS), every real estate agent only has a limited selection to offer you since they only have access to their own listings. You’ll most likely also get insufficient information about the property, since they represent the seller’s interests. The online listings of these real estate agencies aren’t very reliable either, as they are often too busy to take ads down promptly.
A buyer’s agent not only represents your interests (and not the seller’s), but they also have frequent, direct contact with listing agencies, so you’re more likely to get the full story, and hear about new listings before they go online. You get better information on the property, recent sales in the area, and you can often get insider information that puts you in a better negotiating position.
Location
Location is one of the most critical factors you have to consider when buying your second home in Paris or any other place. Remember that you can change the condition, price, and configuration of the home you’re buying, but not the location. As much as possible, you want to choose a location feels safe and comfortable to you, and that will appreciate over time.
Paris is divided into twenty different neighborhoods known as arrondissements. Each neighborhood has its specific character, and features. The lowest numbers are the most central while the highest are farther out. Some neighborhoods were originally built for aristocrats, while others might have been separate villages that were eventually swallowed up by Paris. If you want to the character of the neighborhoods you are considering, try wandering at different times of the day.
When choosing the location of your home, it’s always a good idea to think ahead. You may want to reflect on the value or security of your investment at any given time. Will the location hold its value even if the market flattens? Being objective on this matter can help you make a more informed decision.
Price
Another important aspect of buying a home is the price, which is heavily influenced by your location choice. Paris has expensive and less expensive areas. Unlike some other cities, in Paris the further away your property is situated from the center, the more affordable it is likely to be. The average price per square meter in Paris is about 11,000 euros. However it can range far above that, reaching prices up to 30,000 or 40,000 € per square meter for a property on a royal square, with an Eiffel Tower view, or if it is situated on the river. It is difficult to find property within Paris for less than 10,000 € per square meter, though prices can be half that outside the ring road surrounding the city.
Renovation costs can run from perhaps 1,000 € / m2 for a light refreshing of paint and floor surfaces up to 4,000 € / m2 or more for a luxurious gut remodel.
Depending on the current market conditions, average negotiations can be as little as 0-2%, or as much as 5-10%. Larger properties generally have a larger margin for negotiation since smaller properties are always in hot demand. Asking your buyer’s agent about the right negotiation price will be essential as French sellers can take offense at heavy-handed negotiation tactics.
Financing
Using a mortgage loan is commonplace to purchase a property in Paris or anywhere in France. Typically, a French mortgage allows a buyer to borrow between 70-80% of a property’s value. But other brokers may only permit 50% for non-Europeans.
Keep in mind that French lenders also use debt to income ratios to evaluate whether or not you can pay back the money you’ll owe. Typically, they allow 30-40% of the borrower’s income to be taken up for debt payments. While there are a variety of financial calculators that can help determine repayment, to gain the best clarity, it would be best to consult a reputable French mortgage broker to explore other financing options. Your buyer’s agent can recommend some options.
Taxation
Taxes in France are generally high, but ongoing property taxes tend to be quite reasonable after purchase. For a rough guide, you can expect to pay about 7-8% of the purchase price in stamp duties, including the notaries fees for managing the closing process.
Taxe Foncier and Taxe d’Habitation are two property taxes that together total around half a percent per year, making it a bargain compared to many capital cities around the world.
Moving in, and beyond…
Paris Property Group can help with the entire process, from start to finish, so that your dream of owning in Paris can be smooth and enjoyable. Once we’ve found the property, assisted with negotiation, due diligence, and set up your utilities and banking, we also help with any renovation, property management, etc. and can also connect you with a social network so that your transition is seamless. If we didn’t cover your question here, just ask us!
