The State of the Estate Agent in France

Back in 2003 I had the opportunity to deal with a well tuned businessman based in Nimes France. He wanted to attack the real estate market across France and had a killer plan.
You see, up until that time the French real estate market had been abused to a degree unheard of elsewhere in the world, thousands upon thousands of estate agents had appeared all over the place. In Nimes for example, François (the man with the vision) counted no less than 120! Have you seen the size of Nimes? It's tiny for so many competing estate agencies or Immobilier (immo) as the French call them. The reason for such a top heavy immobilier population became evident to me as François started to explain his plan.

If you want to sell a property in France, there is much red tape to cut through because a notary is needed to pore over the deal otherwise it will not be legal. Therefore Joe Public was ripe for being ripped off! The Agents started charging heavy levies for the priviledge of approaching notaries on behalf of their clients in fact there are records of charges as high as 18%! the average during 2003 being around 8-9%, still way too much for Joe Public to swallow with impunity. The truth of my last statement was being borne out by the sellers starting to cut out the "middle man" by doing the deal themselves and shouldering the hassle of finding and "sweet talking" a notary - a practice termed p2p for obvious reasons. So, immobiliere only needed to sell a handful of properties each year to make a tidy sum, hence the frequently unopened Real Estate shop fronts in Nimes (and elsewhere in France) , they were all on virtually permanent holidays!

Mandates to sell a property are not the exclusive right of the deal holder as it is in the UK for example. Oh no, mandates can be given to sell the property to ALL the estate agents in France if the seller so wishes, so, getting Mandates to sell a property is not too hard unless your fees are too high for the market or you don't have any advertising. The result of this was that immobilier would have twenty or so mandates on their books at any one time but of course they were / are looking to sell only one or two to make their cash for the year, not too hard if you are getting 14% !

So as p2p rose back in 2003 François had the idea to slash the overheads of a new agency by making it "online" only. Now he could charge less - 1% 2% 3% - a much better deal! How would the public take it? Not a problem for the public as it meant relinquishing the burden of doing the deals themselves at what is really the right price. No, the problem was with the traditional agencies. They began to feel the pinch as 123webimmo.com took off and started to pick up mandates hand over fist. So much so that they even blocked the use of the standard immobilier newspaper "Top Hebdo" by threatening the publishers with withdrawal. Of course this is not legal in the European Union and so 123webimmo.com fought back and won a ruling forcing Top Hebdo to publish their ads.

"How is 123webimmo.com doing now?" I hear you ask.
They now have 15 agencies all over France and are gathering energy during this time of extreme slump in the real estate markets everywhere, the reason is their pricing. Lets face it, if you want to sell, if you have to sell, you are going to want the best deal especially while the pinch is on right? So I take my hat off to the little Frenchman François and his big vision as he takes on the might of Frances army of immobilier!

If you want to find a property in France, I highly recommend 123webimmo.com

Posted in Business on Thursday 2nd of October 2008 01:19:17 AM