Friday, 28 October 2016

Friday, 28 October 2016

The Professionals

If you are buying property in France, you may well be unsure which, if any, professionals you need to use in your property transaction. Here is our brief guide to help you:

Accountant – you may be surprised to find this one on the list, but it may be beneficial to you if you purchase your house in the name of a SCI for example, or if you plan to run a business in France. A bilingual accountant can explain to you the most favourable way to structure your plans, and assist with your first returns.

Architect – The quality of French architects is generally very high, and you will need to employ one if you are considering a build of 170m² or above. Below this figure you can use someone who may not be qualified as an architect, such as a maître d’oeuvre, but you need to be careful about their competence. An architect can be a good steer to advise you on any major renovation project, and this is generally money well spent.

Currency expert – as a business, we always recommend our clients to use a currency exchange company if they need to switch currencies. The best FX companies will offer rates that are between 2.5 and 5% better than those offered by the High Street banks. Some clients are suspicious because they are not banks, and prefer to use their tried and tested bank. I recall one client from the Isle of Wight who purchased a property back in 2003, and chose not to use our currency experts. He got a truly rotten rate, and advised me that he had to stay with the bank out of loyalty. He subsequently sold and returned to the IOW several years later, and I reminded him to use our FX providers rather than the bank. Guess what – he used the bank and got an awful deal again. Some price loyalty!

Diagnostics – when you buy a French house there are an increasing number of professional surveys that must be provided by the seller as part of the sale process. The survey reports are provided to the notaire for annexation to the sale and purchase agreement and, ultimately, the deed of sale. These cover the following areas: - Asbestos, Lead, Termites, Energy Efficiency, Natural or Industrial Risks, Electrical Wiring, Gas Installations & Septic Tanks. Some of these are useful and some are pretty useless. They do give you some exact information about what you are buying though.

Financial adviser – too few buyers consult an adviser versed in both the UK & French financial systems. I think that advisers have a bad name because of fees / commissions. But today, fees are relatively low, and a good financial adviser can structure your investments so that you pay minimum tax, and perhaps even advise you about a better, more tax effective pension scheme. Sounds like a win / win to me, but few clients go down this route.

Insurance agent – many buyers take over the vendor’s existing insurance policy when they buy in France. But ask yourself – does this provide me with the cover that I need? A far better option is to speak to our bilingual assurance agents, who can offer claims service & schedules in English as well as French, plus discounts for multiple policies.

Notaire – if you are buying a French house then you will need a Notaire. These experts are generally very competent, but their skill sets do vary considerably. We tend to recommend bilingual notaires who are used to deal with English speaking clients. They will listen to your requirements, particularly with regards to succession, (what happens when you die), and structure your purchase accordingly. They will often prepare a Procuration (Power of Attorney for someone in their étude to sign on your behalf. They can also advise you about wills. You can appoint a separate Notaire to the vendor if you wish, at no extra cost. We generally advise against this, as frequently there is a bit of professional posturing, and there is no real added value.

Solicitor – just below 5% of our buyers instruct a solicitor to assist them with their purchases. Usually, they are buyers who feel rather insecure about the process that they are about to undertake, or have reservations about the transaction in some way. We have no objection to clients appointing a solicitor, but we do feel that they add little to the process, as pretty well everything that they do is covered by the Notaire. What they can do is add an element of conflict between buyer and seller, because they tend to be rather “picky” about small, and often insignificant details. As an example, one solicitor advised that his client was not prepared to sign as whilst the fixtures & fittings included in the sale had been fully itemised, we had not included door furniture, i.e. door knobs. The Notaire, unsurprisingly adopted a stance of “I am not being moved”, and the UK solicitor backed off. The buyer was appalled when we told them – they had no idea of how awkward their solicitor was being. They can also cause conflict with the Notaire(s), who also see their professional abilities being questioned. They do not come cheap, and I have yet to see one have a major input on the content of a Compromis de Vente in 15 years, so I suspect you could spend your money more wisely.

Surveyor – between 5 and 10% of our buyers decide to opt for a pre-purchase survey, as this is the “done thing” in the UK. Again, a report of this type does not come cheap, and there is normally a lot of small print about what is excluded. Bear in mind, an old C17th house will probably have a roof supported by beams that are literally trees, and follow the contours of the tree. If you want something absolutely squared and exact you probably need to look at a new build! Once again, many clients go down this route for “reassurance”, and then totally ignore what the report says because they love the property.

Personally, I think that the most important areas are to use a currency company to exchange into Euros, and consider using a financial adviser to point you in the right direction for the structure of your finances. A solicitor and surveyor are really only necessary if you really feel unsure about what you are doing. They come at a cost – and perhaps that money can be better invested elsewhere in your French house?

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