Foreign buyers are getting a taste for real estate negotiations

Property prices in Île-de-France fell by more than 8% between the first quarters of 2023 and 2024.Prices are falling, but not enough», notes Élodie Frémont, president of the Real Estate Statistics Commission and notary in Paris. Before adding an unexpected sentence: “Even foreigners negotiate.»

This attempt by foreign buyers to drive down Paris real estate prices is a new phenomenon that she says first appeared in early 2022, then accelerated in the third quarter of 2022 and then in 2023 and 2024.”This date coincides with the period when the Paris market began to lag and harden. In parallel, the US dollar strengthened », analyzes Élodie Frémont. American, Italian and English buyers are aware that in a context of soaring interest rates, paying cash is an advantage, and because it offers the opportunity to sign a promise to sell very quickly, they are trying to negotiate prices.”something we’ve never seen before“.

Because their currency is strong and the number of potential candidates for the same product is small, the Americans are in a strong bargaining position. “I saw a 10% discount on top products», confides Élodie Frémont. On the other hand, since most sales are forced, i.e. caused by divorce, inheritance, etc., sellers do not discuss. They are in desperate need of cash, and being able to make a sale quickly without risking a loan rejection reassures them, even if it means accepting a discount. “This is a nationality for which money is not a taboo, so they do not mind showing their income», adds Élodie Frémont. “About 90% of their purchases are made in cash, so they don’t think about whether the accommodation suits them and don’t go to agencies to see if it’s affordable.», the nuance of Andréa Boström Mouls, director of the Varenne agency, which has been specializing in high-end real estate for thirty years.

DPE is not disruptive to Americans

Élodie Frémont notes that non-resident foreigners are increasingly demanding the quality of products. Previously, if a product had the advantage of a good address but lacked its floor (for example, the first floor), it still satisfied foreigners. Today, foreign customers are always attentive to the address (6th, 7th and part 16th are popular), but also to the floor and noise. “however diagnostics of energy demand, DPE, has never harassed any non-permanent American. It is a wealthier clientele, so they are not bothered by excessive consumption and the bill that goes with it.», acknowledges the president of the commission for real estate statistics and a notary in Paris.

According to Richard Tzipin, CEO of Barnes, a real estate network specializing in luxury properties, DPE actually plays less in the eyes of foreigners than in the eyes of the French. “The most important is the turnkey option. In the Odéon district (note editors in the 6th arrondissement of Paris), A Canadian bought a turnkey apartment of 120 square meters, perfect, without work, for 29,000 euros per square meter” he cites as an example. “Americans often buy renovated properties that show good DPE. But if it is good to redo with a bad DPE, it is neither decisive nor prohibitive. This is not a population that likes to work, so they are less interested in this type of property, but they prefer apartments in perfect condition that combine contemporary decor, old-fashioned charm and original preserved features», adds Jean-Philippe Roux, director of the John Taylor agency, which has 70% of foreign clients.

For Thierry Delesalle, spokesman for the Chamber of Notaries in Paris, “foreigners also read the press and see an 8% drop in prices in one year. When buying real estate, it is complicated for those who do not live here to know whether the seller has provided this discount. So they try to negotiate.” It ensures that the goods continue to leave without a defect without any negotiation, “otherwise they will slip through your fingers. There are still buyers“.

Foreigners negotiate less than the French

Richard Tzipin refusesgenerality about foreigners“. He explains that “the Middle Easterners and the Lebanese have always negotiated. Americans negotiated less, it’s not part of their culture. There are several mentalities“. The Emirates are “world champion negotiators, it’s in their nature. They will receive discounts of 10 to 25%», emphasizes Frank Sylvaire, deputy director of Paris Ouest Sotheby’s Realty. It also depends on the purchase made. If it’s a main residence, foreigners negotiate like the French, but if it’s a pied-à-terre, they don’t negotiate and just go. “For example, an American couple who was looking for a place to stay the typically Parisian rue Oudinot, in the 7th arrondissement of Paris, he fell in love and in three days bought a property for 25,000 euros per square meter without even trying to negotiate“, he adds.

Jean-Philippe Roux agrees: “Foreigners negotiate much less than the French. They buy higher because they are not getting the same. It’s the second home market, the joy of buying not to live but to enjoy the city they love“, explains. According to him, the negotiation rates among foreigners are between 0 and 5%, where we would have higher percentages among the French. He takes the example of a small pied-à-terre to be renovated (a property that attracts foreigners less than a turnkey property in general). “This small two bedroom property is located on the Champ de Mars side and offers views of the Eiffel Tower. The best bids submitted by the French offered a price 15% below the displayed price. American made an offer 5% below the price. Foreigners will not place the same value on seeing a monument. For them, the view is decisive“, he adds. The property sold in 15 days for 1,300,000 euros. The English negotiated the price of a house in Neuilly, in the Hauts-de-Seine (92), “the property is presented slightly above the market price, the owner wants to try a slightly higher height. Priced at €4,850,000, they bought it for €4,600,000. The customers paid in cash, so the owner accepted», explains Frank Sylvaire, deputy director of Paris Ouest Sotheby’s Realty. “Foreigners are fascinated by France and Paris in particular. If we gain their trust, we demonstrate transparency, if we explain to them why a particular apartment is being sold at a certain price, they will make an offer close to the displayed price.“, assures Andréa Boström Mouls.

Moreover, they come to Paris for a very short time and do not have time to negotiate: “They are there for one to four days and want to close the deal quickly. They don’t have time to spare, time is money. If they are interested in negotiations, it may take another 15 days to a month”, according to Frank Sylvaire. He takes the example of a client from Hong Kong, China, who was looking for a 200 square meter apartment in the Golden Triangle: “He visited the offered apartments on Friday, visited again on Saturday, made an offer for the price of a furnished turnkey apartment in the 8th arrondissement of Paris. We had the notary’s office open again on Sunday to sign the promise of sale. They opened an international bank account for him on Monday so he could pay the deposit and he left on Tuesday. In 5 days everything was done“, he concludes.

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