You’ve undoubtedly seen the often beret-wearing Adrian Leeds traipsing around Paris on HGTV’s House Hunters International. She helps sticker-shocked expats retool their Parisian dreams to focus on what’s important. After that, it’s time to get down to business.
If Leeds’ accent sounds pretty American, it’s because she’s New Orleans-born, living the Paris dream for 21 years and counting. Interestingly, she has Dallas family connections, too. Her résumé shows a marketing and PR pro with experiences ranging from corporate PR to television and print. Understanding communication and reading client needs are good tools for any real estate agent. But how’d she wind up in Paris and how’d she wind up as HGTV’s de facto representative for real estate in the City of Light? I met with Leeds on a recent trip to Paris to find out.
You might expect there to be some nifty story surrounding Leeds landing a perennial spot in HGTV’s House Hunters International corral. Nope. They called her in 2006 for her first spot … and then they didn’t call for a few years. But now, she’s got 20 shows in the can (as TV people say) with her latest being filmed in the days following our meeting.
Given her marketing background, it’s not surprising that Leeds makes the most of her media exposure. While I’ve tried to search for agents featured in other cities, they’ve proven difficult to track down. If you’ve not scribbled down their name and agency during the show, good luck finding them. Not so with Leeds. Simply search for “HGTV, House Hunters Paris” and voila! there she is. Smart.
Leeds said that HGTV has been the best PR she’s had to bring in clients.
What do expats need to know about Paris?
Everything is smaller in Paris, except the culture and the legalities of real estate. France has no MLS-like system to centralize listings and agents are loathe to share a commission. This translates into buyers trooping all over the city to visit each broker’s office (via internet and sneaker-net) to see their listings. And because agents are so stingy about sharing, getting a buyer’s agent (as we understand them) doesn’t help.
According to Leeds, buyer’s agents only get shown the bottom of the listings barrel by those few agents willing to split a commission. The only productive method is for a buyer to hire a consultant who acts like a traditional American buyer’s agent but who is paid by the buyer regardless of whether a property is selected – you’re paying for their time to do all the tedious legwork, negotiations and navigation through the deal.
While some buyers can and do search and purchase French real estate on their own, Leeds cautions against it. There are MANY vagaries in the French legal code that are not familiar to foreign buyers. And because the selling agent represents the seller and wants the highest price, they often won’t tell the buyer of the “gotchas” in the system. The buyer usually finds out too late and winds up paying more, taking more time. To an American, it’s like buying real estate in the 1920s.
Finally, foreign buyers need to understand that list prices are not heavily negotiated. They are well priced from the beginning with a few percentage points of wiggle room. Oh, and don’t expect a bidding war to ratchet-up prices above list price — that’s considered immoral. Leeds told me that by honor, if a seller receives a full-price offer, that’s it, they don’t continue to ask for more (quite different from hot markets in the “immoral” US). Culturally, speaking of money is considered vulgar, so heavy negotiation isn’t tolerated. Low-balling? Not a chance.
On the upside, Paris property and habitation taxes, are quite cheap by Dallas standards. Approximately $1,500 a year for a €1m apartment. HOA dues are obviously priced by building.
Buying a home for short-term rental purposes has become difficult in Paris (but not all of France). Recent governments have allowed moldering laws to be resuscitated to the detriment of investors and second home buyers who want to rent for less than a year. It’s a huge topic that is best explored with a professional, like Leeds.
Size-wise, only the most well-heeled will inhabit a property remotely close in size to their US digs (unless they were living in a shoebox in New York City perhaps). Another French oddity for the American client is the often separated bath-room and toilet-room – even in recently constructed properties. The point in apartments with a single plumbing set was to separate functions to allow for more efficient usage (e.g. bathing blocks access to the toilet). It also kept guests out of the bath-room. Americans are used to multiple bathrooms where congestion is less of a problem.
European kitchens are also quite small by American standards. What this really tells us is that to create the fantastic tastes of France, one really doesn’t need an acre of counter space. Refrigerators are also built for smaller kitchens, but also for a culture that grocery shops more frequently for fresher ingredients. This is especially true in urban areas where there are green grocers and farmers’ markets everywhere.
Vintage properties versus newer-build?
If you’re going to live in Paris, you want a home that evokes “Paris” which typically means a Haussmann-era or earlier building. These buildings may be cramped, often the result of subdividing larger apartments. But new construction, consisting largely of infills, offer all the mod-cons. The choice can come down to living in history or living in modernity with panoramas of the “art” of the Paris skyline.
Leeds says that if buyers go for a modern structure, their investment will likely not appreciate as well as vintage buildings. Also, when buying into a vintage structure, views of modern construction can also decrease desirability. In the end she says, it’s better to be in a new structure than to be looking at one (views are critical) but the best is to be in a vintage building with vintage Parisian views.
Leeds’ advice is to buy vintage with great views. If a buyer wants a modern interior, renovation in Paris isn’t any more terrible than anywhere else. Unlike the UK where listed historical buildings require government approvals for both exterior AND interior work, France only requires approvals to change the exterior of a building. Within a building, the HOA can be a different story with some more welcoming than others (again, like everywhere else). Buyers must do their homework.
Is it ever a bad time to buy real estate in central Paris? Sometimes, but not now says Leeds. France’s real estate market never crashed with the global economy because of the stringent mortgage qualifications and huge down payments required. This has led to a very strong ownership pool that is less subject to temporary economic issues. Leeds said that now is actually a good time to buy in Paris because prices are down. Of course she iterated that the market was down by <2-percent, but any decline was reason to pounce in this extremely tight market.
Viager – France’s Reverse Mortgage
Viager is an interesting French real estate practice whereby elderly homeowners can “sell” their home to a buyer who can only take possession upon the owner’s death. The point is that the seller wants to cash out either in a lump sum, allowance or most often, a combination. Think of it as a reverse mortgage without the bank involved.
Let’s say a property is worth €1m and the homeowner is 70 years old. The home is valued at 60-percent of its market value (percentage legally tied to owner’s age) because it is still occupied (or €600k as an “occupied value” in this example). The sale will include a lump sum, called a bouquet (not bucket..), of 30-percent or €180k with an annual payment calculated by life expectancy of around €26k until the seller’s death. If the seller lives until they’re 85, the buyer is able to purchase the property for a total of €570k while the property may be worth €1.1m due to price gains. However, if the owner lives to an Ebby Halliday age, the buyer may get no deal at all.
There’s definitely a bit of a gamble but it’s important to note that the contract is legally binding, so there’s no problem with heirs scrounging around after the will is read. Also, to protect everyone, all Viager’s are monitored by the French Ministry of Economics and Finance (the Comité Répressif des Abus de Droits).
Leeds purchased her own viager apartment. It’s an involved and ultimately unhappy tale (not because of the viager) that’s she’s turning into a book.
Renting in Paris is next to impossible. Partly due to recent law enforcements and partly because of the city’s popularity. Leeds says renters have to be ready to cough up a full year’s rent on the spot and sign the deal within seconds of a property coming on the market.
Has Airbnb had an effect on the market for short-term rentals? Yes and no. Airbnb is one of the types of short-term rentals that are under siege in Paris. The government has stoked the phenomenon by encouraging the French’s natural affliction of spying to turn in neighbors who they suspect of renting their homes. It’s all very sordid and best explained by a professional like Leeds.
Want to Hear More of Leeds’ Pearls?
On June 9, 2016, Candysdirt.com will be hosting a very special Staff Meeting event featuring Leeds. Her hour-long program will include all the ins and outs of purchasing French real estate. Stay tuned for more details! Investors and agents with clientele interested in French real estate will be welcomed – and yes, clichés aside, space will be VERY limited. Can’t wait? Sign up for any (or all) of her three newsletters here. Her website is full of information.
Remember: Do you have an HOA story to tell? A little high-rise history? Realtors, want to feature a listing in need of renovation or one that’s complete with flying colors? How about hosting a Candy’s Dirt Staff Meeting? Shoot Jon an email. Marriage proposals accepted (they’re legal)! firstname.lastname@example.org