TIPS TO OUR BUYERS

A tip from JFS: If you find that the prices of apartments strain your budget, and you are willing to experiment with a neighborhood that has a strong Parisian flavor but is otherwise unfamiliar to you, consider searching for a bargain in a less touristy arrondissement where prices run 20-30% less than the prime quartiers like St.-Germain, Ile St.-Louis or the Marais. Upcoming areas that promise to be good investment in Paris real estate include the Courcelles quartier of the 17th arrondissement, the 14th around boulevard Edgar Quinet, parts of the 8th north of Champs-Elysées, the 2nd arrondissement near La Bourse, the northern sector of the 3rd arrondissement, and the southern part of the 16th arrondissement - all safe neighborhoods with a full measure of traditional Parisian charm. In short, for bargains look in practically any arrondissement other than the big budget-busters - 4 through 7.

A tip from JFS: Unless you plan to make Paris your new home, consider letting a reputable rental company offer your apartment for short-term (one or two weeks) stays to help offset mortgage or regular maintenance expense. Factors to be considered here are location (some areas of Paris will attract virtually no rental clients), size and configuration of the apartment, how to outfit the apartment so that it appeals to the kind of clientele you want to attract, how to market it, and how to find a company or person to manage the apartment and oversee rentals in your absence. JFS can give you expert advice on decisions that will maximize your rental potential. Additionally, when renting there are financing and tax implications to be taken into account. Our roster of legal and fiscal experts can help you structure the acquisition to in a way that best suits your individual situation.

A tip from JFS: You have a better chance of beating the price game, and making a profitable investment in Paris, if you are willing to do substantial renovations, or to redo an apartment that is otherwise in mechanical condition but needs refreshing. JFS can make appointments with contractors who can estimate the cost of renovations and oversee the work. As the prospective buyer of an apartment that needs work, you are in a stronger position to make a below-price offer. And by the time the work is done, you will own a property whose value has increased well beyond the money you put into it.

But suppose you are a buyer who is comfortable only with buying an apartment ready for turnkey occupancy, or at least one that requires nothing more than minor refreshing or a fresh coat of paint. What is the best way to proceed?

A tip from JFS: First, trust us on a basic premise concerning Paris real estate: in the City of Light, very fine apartments in virtually flawless condition in highly desirable locations are as rare as hen's teeth. Thus you must be ready to move when you come upon such an apartment. Do basic homework before you begin to look seriously: be familiar with average per square meter costs in the areas you are looking (see the discussion below), open a French checking account (it is simple and takes only minutes), and figure out how much ready cash you have in order to cover the down payment and (at closing) notaire's fees. If you plan to finance part of the purchase, talk to a mortgage broker in advance about your borrowing power. JFS can assist you with all these steps.
Having armed yourself with this information, you will be prepared to act swiftly when you find your coup de coeur - the apartment that you fall in love with at first sight. As in romance, as in real estate: when you find your true happiness, nail it down! Make an offer (be sure it a reasonable one), and when you get the owner's agreement move immediately toward a sales contract (a compromis or promesse de vente). If you want to have a professional inspection before finalizing the deal, fine - your offer can be made conditional on approval by a professional inspector. Meanwhile with a signed offer the apartment won't be sold to someone else.

When it comes to buying an apartment in Paris it is imperative to nail down a desirable purchase because most likely the same factors that made you say wow! will produce the same effect on the next prospective buyer. That person may be savvy enough about Paris real estate to go straight to a realtor's office and take the property off the market. There is no sadder spectacle in the French real estate business than the buyer who has arduously searched for a property, finally makes a decision and jubilantly calls to make an offer - only to be told the property just sold. This is especially true of the overseas buyer who has spent time and money to visit France in search of the perfect Paris apartment or country farmhouse. We have seen people's dream properties get snatched away like this multiple times, and once is too often.

Price per square meter: is it a useful tool in evaluating an owner's price?

Realtors and prospective buyers in the Paris real estate market tend to talk about different neighborhoods in Paris in terms of the average cost per square meter in that quartier. The per-square-meter cost is often said to be a useful in evaluating whether an owner's price is reasonable. It is also helpful in showing trends in the cost to buy an apartment in different areas of Paris. Journalists routinely use the per-square-meter figures to document telltale fluctuations in Paris prices, and to speculate on the stratospheric levels to which they are headed. Such reports never fail to mention the 6th and 7th arrondissements, where many transactions now exceed € 14,000-15,000 per square meter, or Ile St.-Louis, where the figure soars even higher.

Blvd Montparnasse, 6th arr.

The average per square meter cost of a neighborhood (these figures are published regularly by the Paris notaires association) can be a useful gauge in evaluating an apartment for sale in Paris - but again, we offer a caveat. In addition to location, factors that strongly affect an apartment's cost per square meter are which floor the property is on, whether there is an elevator, its orientation and its exposure to street noise, how much natural light it gets, whether it includes a chambre de service or storage space in the cellar, presence of a building manager, distance from a Métro station, and so on. All of these factors affect the quality of the investment.

Beyond these factors are the two intangibles that greatly affect the price an owner sets for a property: its innate charme (the ineffable wow! factor), and its overall condition and visual appeal. The rule here is that a classic Parisian apartment of charm in perfect condition that has all or most of the elements listed in the above paragraph - in other words, a place where you can just move in the furniture - will be substantially more valuable than an apartment that falls short of perfection. It will also sell very quickly. And inevitably, because it is so exceptional among available apartments for sale in Paris, it will render irrelevant the current average per square meter figure for the district.

In a recent newsletter, our friend Alexandre Moisset of Groupe Mobilis, one of our partners in the Paris real estate market, stated the matter succinctly with this example:

When during the same time period in the same arrondissement (for example, the 7th) we sell a 110 m2 apartment at a price of € 17, 181 per square meter, and another of 320 m2 at a price of 9,000 per square meter, the current per-square-meter price published in the newspaper [for the quartier] is not a useful reference tool. The real question is, what are the individual characteristics [of the apartment] that accounts for this difference?