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 Hello from France. When I am here, I always pick up newspapers and speciality magazines with listings of properties for sale and for lease. Real estate is hard to get out of your blood, and I admit I am hooked.
An article caught my attention, which gives a summary of points about buying in France, particularly if you were to find your little corner of Paris.
There are some interesting parallels to buying in Mexico. See which ones you think pertain to buying Mexican properties.
BUYING.
Emplacement. The word is French, but the cardinal rule is the same the world over: location, location, location. In Paris the districts most in demand and the most expensive are those in the historic center of the city. In Paris, the arrondissements of the 1st through the 8th and part of the 16th are most in demand. These include the chic areas of Faubourg Saint Honore', Saint-Germain-des-Pres, and the Marais. Slightly more affordable are the 12th, near the Bastille; the 14th and parts of the 9th and the 15th. Bargains sometimes can be found in parts of the l7th, 18th, (expect for the chic sector of Montmartre) and the 19th and 20th.
In the provinces away from the historic inter city of Paris, prices decrease with distance from Paris and other major cities. Since the advent of high-speed transportation with the TGV train, the south of France has skyrocketed. Good places to look are west to Normandy or east toward Champagne and Alsace, where a new high-speed train goes into service in 2006.
 In Puerto Vallarta during the past year, the downtown area near the cathedral is in demand again, with brisk sales of houses and any available lots. Several homes, which were purchased last year and now renovated, are back on the market at higher prices. Finding properties under 200,000USD is difficult in this intown area.
REAL ESTATE AGENTS
Paris: Once you've chosen a location in Paris, consult one or several real estate agents in the neighbourhood or nearest town. Newspaper ads and real estate magazines are good sources, but a professional agent is a guarantee that size and condition are as advertised and the price is fair. Agencies near a chosen location will have more local properties to offer and better knowledge of the area. A professional will smoothly negotiate the legal formalities. Agency fees are included in the quoted sales price and are normally about 5-6%.
Puerto Vallarta: PV and the Bay of Banderas have a resource through the Multi List of listed properties, which gives information as to size, amenities, and asking price. This information is shared by agents in the national and local chapters of AMPI, the major real estate organization for Mexico. An agent can give a buyer information on all these properties listed for sale. The concept of Buyer Agency or Representation is not noted in the Paris real estate information. This speciality is more common in the United States and is now spreading to the rest of North America. Agency fees are quoted in the sales price and are normally 6-8% for homes, condos and can be higher for land.
2PC 3PC
Paris: The codes used are the same in all printed material for the property description. Pc stands for PIECE, or room, and it refers to main rooms. A 2pc will have a living room and one bedroom, plus kitchen and bath or shower. Prices are based on square meters; so if you think in feet and inches, carry a converter table. Many apartments in beautiful old Paris buildings have little or no closet space, but some come with a top-floor maid's room or a cellar.
PV and Bay of Banderas: The code for square meters is m2 and room names are written in Spanish and English; recamara for bedroom, sala for living room, cocina for kitchen, regadera for shower. Older properties have little closet space, but newer designs include more storage and bigger bathrooms and kitchens.
CURRENT REAL ESTATE BOOM
Paris: It is a sellers' market, with little room for price negotiation.
PV and the Bay of Banderas: It is a seller's market, with some room for negotiation on price, but much less than the previous three years. New construction has been announced, which will affect supply and demand in the next 24-36 months.
SALES PROCEDURE AND DOCUMENTS
Paris: The Promesse de Vente is the "promise of sale" between vendor and buyer. A down payment, usually 10% of the sale price, is put into escrow pending the final sale. A buyer has 7 days after signing to cancel the Promesse without penalty.
The usual period between the offer and the final sale is 2-3 months, but can vary. A "suspension" clause in the Promesse, making the sale dependent on securing bank financing, was once common but is disappearing.
The notaire under French law is the appointed professional lawyer to transfer the property upon sale. Both buyer and seller must hire a notary, who handles legal formalities including certification of size and condition of the property, and that it is free of lead and asbestos. Notary fees are about 6% and above the sales price.
COPROPRIETE. In France, most apartments are COPROPRIETES, the equivalent of condominiums, so there is no need for buyers to be accepted by a co-op board.
The Act Authentique. The final act of sale is signed in the office of one of the notaries. In Paris traditionally it is the buyer's notarie.
Plus-value. Profits on resale are taxed. Foreign owners must hire a "fiscal representative" to calculate the tax.
PV and Bay of Banderas: The Promise of Sale Contract is similar in concept to the Promesse de vente, and will be replaced by the actual sale contract, which is the escritura or deed.
The down payment is usually 10% and it is good when the money is put into escrow, but not all sellers will agree to this.
There is no automatic cancellation or fixed period of time to cancel the agreement currently dictated in Mexico law. If the seller has agreed to contingencies to the contract, these issues have to be resolved before the contract becomes binding. After the contract becomes binding, there can be penalties to the defaulting party.
A closing can take 2-3 months or can vary. Up to this point there is no standard clause in an offer stating financing as a contingency for the buyer.
The Mexican government has been seeking national and international mortgage lenders to provide financing choices for vacation homes and primary homes in Mexico.
The notary, who is a specialized attorney appointed for life, transfers real estate in Mexico. The buyer typically pays for notary fees as well as the cost of acquiring the property. These fees include no lien certificates, transfer tax, tax appraisal, bank trust fees if the property is in a restricted zone. Notary fees can range between 5%-10%, depending on the price of the property. There is no required inspection of the property, but many buyers are including one in their conditions of an offer.
Condominium. Condominiums are a type of property with certain legal characteristics and there are no coops at this time.
Capital gains tax exists in Mexico. This tax applies to nationals and foreigners. A notary is sought to determine the amount of tax the seller owes, or if there is an exemption.
In both France and Mexico, buyers should arrange for multi-risk insurance the moment the final act of sale is signed. Owners are liable for annual real estate taxes and bank trust administration fees if the property is in a restricted zone.
Au Revoir!
Harriet Cochran Murray - Cochran Real Estate
E-mail: harriet@casasandvillas.com
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