Bonjour [EMAIL],

Place de l'Hôtel de Ville

The French Administration: For or Against Us?

French Property Insider
Volume VIII, Issue 41
October 14, 2010
Paris, France
adrianleeds.com/frenchproperty/insider

• Printer Friendly • Recommend to Friends...it's FREE!
• Don't miss a single issue of French Property Insider! "Whitelist" French Property Insider by adding "fpi@adrianleeds.com" to your address book.

Own a Piece of Paris. Fractional ownership is the hottest way to own your piece of Paris simply, easily and inexpensively! Here is one of our newest offerings available through French Property Fractional:

New! Le Chabrol

Elegant living on the banks of the Dordogne. Located in a serene country setting directly on the banks of the Dordogne River, this gorgeous property features a shimmering, heated, salt water swimming pool. Includes three bedrooms sleeping up to six, 2½ bathrooms, and a spacious open-plan kitchen/dining room/living rm.

For more information on this and other fractional ownership properties now available, or to learn how you can design your own property, visit French Property Fractional.

Bonjour French Property Insider Subscriber,

The weather has turned cold, the country is on strike because the French aren't willing to add two years to their working life in exchange for a more stable economy, lenders' interest rates are rising, property prices are rising and on the ground we're dealing with the hurdles the French administration puts before us.

Does all this deter us from a life in France? No, but it's certainly challenging and when all is said and done, success provides a real sense of accomplishment.

We can't do much about the weather and of course, have come to accept Paris temperatures as part of the smoky-colored scenery, so this one complaint can be left untouched.

The country being on strike is affecting tourism and therefore property rentals as the media makes France seem unsafe -- as if it is a war zone -- when in fact, it isn't that at all. Remember that the media photographs a moment and then repeats it over and over again fooling you into thinking that a moment has become a lifetime using the same sad story. Often they misrepresent the true picture in the interest of getting more viewers, so don't believe everything you see or read. In Paris most means of transport are running normally and flying friends have not been delayed.

The truth is that November through mid December is traditionally low season for apartment rentals and therefore rates are lower making it a great time of year to visit! And on the positive side, for landlords who expect low season anyway, it is as good a time as any for the country to be on strike!

Yes, lenders' rates are creeping up from the once low of 2.2%. Today I received the latest rates from Banque Patrimoine et Immobilier (BPI) with the variable rates starting at 2.3% with a margin of 1.1%, fixed rates starting at 3.5% and interest only loans starting at 2.5% with a margin of 1.55%. Still, these are some of the lowest rates we've seen in the past few years, making it still a great time to get in on the market. If you want to test out your ability to get a French mortgage, simply email our Mortgage Manager, John Rule, at loan@adrianleeds.com

Yes, prices are rising and in Paris property values are at an all time high in the history of the city. Don't believe the reports from the Chambre de Notaires as expect the reported price to already be out of date by several months. Even so, through second quarter 2010, the number of sales was reported up 38% over the same period last year in the Ile-de-France and prices rose 9.1% between July 2009 and July 2010. That means every day you're waiting to make a purchase is a loss of potential appreciation.

The rate of exchange is about $1.40 to the euro today, but today's market report stated: "The dollar was mixed overnight. GBP underperformed due to poor retail sales data, the brutal austerity measures and prospects for QEII. The EUR outperformed on strong PMI data (particularly German) and despite worsening French civil discord."

No one can predict currency trends...with any certainty, so if you're thinking you'll wait until the dollar gets stronger, you could be "waiting for Godot." And while you're waiting, interest rates and prices are rising. If you take a variable mortgage that allows prepayment with no penalty, then you'll have a lot more control over the rate of exchange by paying off some of all of the loan when the rate is more in your favor. Meanwhile, don't forget, the property increased in euro value, so the weaker the dollar, the more you earn in dollar terms! (For the best transfer rates, be sure to use our favorite broker, Moneycorp. Visit frenchproperty/loan/moneycorpconvertor

The French administration can often work against us, but often it works with us, as well. This past week we had two situations, each with an opposite point of view.

In the first case, the buyer wanted to insert into the presale agreement a "clause suspensive," or suspensive condition that protects the buyer should a loan not be achievable, thereby releasing the buyer from the purchase obligation with no penalties. Naturally the seller, in today's seller's market, refused to take the risk of losing the sale. The solution was a two-week extension of the "delai de réflection," or "cooling-off period" or what I think of a "buyer's remorse," normally 7 days, to give the buyer time to acquire a firm loan offer from the lender. This was a good compromise and was very simple to achieve in a matter of a few words added to the presale agreement. Everyone walked away happy.

In the second case, the French administration is making it very difficult for a family of three to purchase a property in their own names as individuals, rather than in the name of an "SCI," or "Société Civile Immobilière" -- a property company made up of shareholders. In this case, because a daughter is one owner, but is not named on the mortgage, the government is requiring that either all three be present in France to sign on the documents or that the powers of attorney be notarized on French soil -- in this case, at French Consulates or Embassies in the U.S.

French Consulates are located in Atlanta, Boston, Chicago, Houston, Los Angeles, Miami, New Orleans, New York, San Francisco and Washington DC. The family has to find a way to travel to one of these cities to accomplish this, but that's the easy part. Even more difficult is that the Consulates will not begin to make an appointment for them at any of the various consulates without their having prepared all documents in advance and having official translations from French to English of all documents. Just showing up means they will be turned away and time is of the essence, as there are date limits placed on the closing threatening a default. Does the French administration care?

No. But we do. Within minutes we found a translator and am back on the trail...stay tuned.

A bientôt,

Copyright 2011, Adrian Leeds®
Adrian Leeds Group, LLC, www.adrianleeds.com