Estate agencies in Nice
There are literally thousands of estate agents in Nice, and so how do you choose which ones to do viewing with? What makes a good estate agent? What should you watch out for?
Agency fees are in general a fixed 5%. It may be marked as 4% + TVA, where TVA is VAT at 19.6%. For properties under €100,000 it can rise up to 10%, depending on how cheap the property and how bad the area, but you should not see this inside the centre of Nice. Sometimes the agency fee is only 4% inclusive, where the agency has given a reduced commission in exchange for an exclusivity. Occasionally the agent has agreed a fix sum commission with the seller, and this should be clearly marked on the Mandat. As a buyer, do not bother trying to get the agency to reduce their commission… let the seller do that. Pitch the price you think is fair and stick to it. The pressure is then on the seller to get the agency to reduce their commission as each thousand of agency commission is a thousand out of their own pocket.
When signing the Compromis, even though the Mandat gives a percentage or fixed amount to be paid by the seller, any figure for commission can be paid and by either buyer, seller, or both. This makes no difference to the sale price itself but has different legal and tax implications.
An agency will prefer to be paid by the seller as they are then legally protected. During the final signing, the agency commission will be paid by cheque directly by the Notaire and so there is no risk of them not getting paid. If paid by buyer then they are reliant on the buyer writing them a cheque during the signing, and if there is a problem with the cheque they are obliged to chase the payment via a court case through the civil courts.
If there is a good level of trust between a buyer and his agent, then the commission can be paid by the buyer. The advantage for the buyer is that he does not pay Notaire fees on the agency commission. On a €250,000 apartment this will save you around €900. A compromise can to be half at the charge of the buyer and half the seller.
Many expats, once they feel like locals, believe it makes sense to try and transact a private sale and save money by not paying agency fees. Whilst a good idea in theory, no matter how much home-owners grumble at the 5% agencies demand they still invariably use them anyway. The thimbleful of properties in private ads, such as PAP (Particulier a Particulier), are a tiny percentage of those listed by the several thousand estate agencies around Nice. Certainly scan the private ads each week just in case, but whether for personal use or for investment it is not worth compromising on area or what you need to save a few thousand euros. Especially as the improved capital appreciation on the better property will wipe out those gains anyway. Remember: if it is not what you wanted, it was not a bargain.
It is not uncommon for a property to be listed with many different agencies, often at different prices. There is usually nothing sinister in this. Putting a property on with multiple agencies engenders a healthy sense of competition, pushing agencies to ensure the property is well publicised and the first-past-the-post system of the Compromis means the agents are in a race to sell your property.
So why the different prices? Sometimes the owner has notified a couple of agencies as to a change in price, but not the others. If you are getting on well with an agent but he has a property you like at a higher price, give him a call. He will usually call the owner and confirm the lower price. If a number of agencies have it at one price and just one at a lower price, be hesitant to call the one with the lower price. It is a trick dishonest agents use to pull in clients. They advertise a lower price without the owner’s consent, then pretend this margin is part of the lower offer you present.
Another reason the price can be higher with an agency is that they do not have it directly but are re-advertising another agency’s property. Many agencies are members of networks, such as SIA or ORPI, which have a pre-determined manner of sharing the commission. Some networks, such as ORPI, oblige their members to share all properties. Others, such as MLS and SIA, do not meaning that if an agency has an exclusivity on a particularly good property they are sure they will sell then they can oblige any agency that wishes to advertise it to put their own additional commission on top.
Sometimes an owner will simply put it with two different agencies at two different prices because he feels like it. One agency may have a more exclusive image which the owner thinks might extract a higher price, or one agent may simply be a good friend of the owner and the owner want to do him a favour by giving him an edge on the price. It is much more rare, but there are no rules that prevent this.
The first rule is know your areas. Agents can suddenly become very vague about the area when pushing a property. The Quartier Musiciens has an unnerving tendency to expand beyond its natural border. On the Promenade des Anglais sounds great until you find yourself viewing up by the airport and nearly an hour walk into town. You can pretty much write off any property described as “central Nice” with no more detail given.
Your average estate agent in Nice will politely listen to what you are looking for, then completely ignore it and show you the properties he happens to have on his books. Sometimes they will throw in a completely inappropriate property as the seller is pressuring them as to why they are not getting any visits. Politely ask the road of each, and then ask at which end. Do not ask the exact address as the agent is unlikely to give it because they are worried the buyer will try and bypass the agency and contact the owner directly. Where on the road the building is makes a huge difference in the centre so it is important to know. Be firm with the agency if you think he is pushing an inappropriate property. If he realises you know your areas and he cannot palm off a lemon to a gullible tourist, he will not want to waste his time any more than you want to waste yours.
Occasionally an agency will want you to sign a “Bon de Visite” after viewing a property. Though many cannot be bothered, it is actually quite normal. It simply states you viewed that property with that agency. As mentioned above, properties can be listed with multiple agencies and if you are viewing with several agencies then you may accidentally be shown the same apartment twice.
Now this is a very sensitive issue with agencies. If you view with one agency then a second agency, and make an offer with the second, there can be legal consequences. If you have signed a Bon de Visite then you will have to not only pay the second agency fees but also the original agency fees on top. At any time the aggrieved agency can legally contest the sale, which means the sale can be blocked until a court case makes a verdict. This can be up to two years in Nice. Even if the sale goes through if legally contested you will not be able to sell it until the legal challenge is cleared.
Now it is strongly recommended that if you are about to enter a building you have already viewed an apartment in then politely decline the visit. If you have not signed the Bon de Visite and are prepared to lie about having visited with the previous agency, then there are two keys factors to assuage your conscience. The first is if the second agency proposed the property at a significantly lower price, or tells you the owner will accept a significantly lower price than the first agency tells you they will “definitely not accept”. The second is if you are uneasy about the first agency and believe the second will represent your interests better and will give better post-sales service.
Do not accept the second agency because you think you will save a few bucks, or because they promise to cut their commission if you go with them. The former you are unnecessarily risking legal problems, and with the latter they are going to try and steal from you also.
Though I prefer the fancy title “property broker”, to differentiate myself from those that just cosy up to a couple of agencies as opposed to the hundreds I work with, it would be undiplomatic to say anything about those that are obviously my rivals. Maybe when I retire I will write an expose on the industry here, but until then you will have to do your own research or trust your own instincts.