French estate agents are governed by a law of 2 January 1970 (known as the Loi Hoguet) and a Decree of 20 July 1972. These laws were passed to protect the public from unacceptably low standards of ethics and competence. They are strictly enforced in France. Under these laws, estate agents MUST hold a carte professionnelle (license).
The licence is valid for one year and is renewed annually. It must be produced to anyone who requests to see it. Contrary to other countries, this license is fa from easy to obtain. The licence will only be issued to a person
- who can provide evidence of his professional competence (e.g. various French university diplomas such as a law degre, and/or substantial practical experience in the field over a long period of time);
- provides professional indemnity insurance cover;
- and also provides a satisfactory financial guarantee.
A listing contract is mandatory
No French estate agent can sell without a proper listing contract (mandat de vente).
A French estate agent must either have a written “mandat de vente” (empowering him or her to sell a property on behalf of the vendor) or a written “mandate de recherche” (empowering him or her to seek out property to buy on behalf of a purchaser).
Under a “Mandat de vente” the estate agent is usually paid his or her commission by the vendor; however, under the “Mandat de recherche” the estate agent’s commission is generally paid by the purchaser.
The "Mandat de vente" can
- either be exclusive, appointing the estate agent as sole agent to market and sell the property on the seller's behalf
- or be non - exclusive, allowing multiple agents to sell the same property simultanously.
"The mandat de vente" is also limited in its duration, usually to 6 months.
Confirmation of showing
A potential buyer who has visited a property may have to sign a bon de visite to acknowledge said visit. This document is not an agreement and can be safely signed by a buyer.
In France, each estate agency is free to decide upon the amount of commission it will charge for the successful sale of a property.
A table with a clear indication of the estate agency's commission schedule must be displayed in the estate agent's office window and/or inside the office (usually the reception area). Usually, the advertised asking price will include the agent's commission, which may be indicated by the letters FAI ("Frais d’Agence Inclus") following the price.
Usually, most agencies will charge a commission of approx. 5 to 10% of the sale's price, depending on the price of the property, its location, local market parameters etc.
French estate agents must by law display at their premises, where it can easily be read, a notice showing the number of the licence, the name (or the trading name) and address of the agent, the amount of the financial guarantee and by whom it is granted, and details of their bankers. The same information must also appear on all official, legally binding documents.