French property owners may experience a financial loss when they sell via the ‘off market’ approach as noted in a previous article. French ‘off market’ property buyers may also have problems.
Defining an ‘Off Market’ property
The French property owner asks a French real estate agent to market the property only to the agents network of clients and perhaps a few other agents. The goal is to sell the property by ‘word of mouth’. The property does not appear on open market websites. In contrast to ‘Off Market’, ‘Open Market’ properties are exposed to the general public and niche buyers, to maximize the potential sale price through the competition in the open market place.
Here are the potential problems:
The agent for the Buyer is the Agent for the Seller
If the French agent for the seller is the same as the one for the buyer and the French real estate agent is being paid by the seller what duty does the agent have to the buyer to protect the buyer’s interest?
Will the buyer be able to put clauses in the contract to protect the buyer? Will they be advised to do so by the sellers agent?
Fees for the Agent for the Buyer
If the Seller has his own agent to help represent him many ‘off market’ properties may have no commission available for the Buyer’s agent so who pays the buyer’s agent. The buyer may think he is getting a good deal on the purchase price until he or she finds out the buyer’s agent fee has to be paid on top of the sale price.
Pricing Concerns
If the buyer is working only with the seller’s agent how does the buyer know the price is appropriate?
Market Exposure Helps the Buyer
If a French property is on the market for several weeks or months and is properly exposed to the market no amount of agents or owners stories about how exclusive the property is can change the fact that it is not desirable enough to have been sold at the price it is at. The open market exposure helps the buyer get a sense as to what the property is worth.
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