Saving money on house sales by bypassing the estate agent could be a false economy, a recent court case has shown.
Cutting out the middle man can save a lot of money: estate agents set their own fees in France, so costs can vary, but they are generally between 3% and 8% of the property price. The average is almost 6%, well above the 4% EU average.
However, using an agent to connect with a buyer or seller, and subsequently proceeding without them, can be just as costly.
The Bordeaux Court of Appeals recently ruled that the buyer and seller of a restaurant who bypassed an estate agent after being introduced by him must pay compensation of €30,000.
The restaurant owner had signed a non-exclusive mandat de vente with the estate agency, with commission payable by the buyer.
He was supposed to inform the agency of any sale, but the pair concluded the sale without the agency, and the seller misled the agency by claiming the sale had been managed by a different agency.
The pair were made to pay a 'penalty clause' of €30,000, as well as €3,000 in legal costs.William Barton / Shutterstock
Neither buyer nor seller were able to prove to the court that they knew each other before the transaction or that another agency had been involved.
The court ruled that the pair should pay the ‘penalty clause’ in the contract to the estate agent. This was €30,000, or 10% of the transaction, as well as €3,000 in legal costs.
"Attempting to bypass estate agents is not uncommon in France, particularly among buyers and sellers looking to reduce transaction costs,” said Gauthier Garmy, house search team member at relocation agency Your Friend in Paris.
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“However, many are unaware that once an agent facilitates the introduction, their commission is typically protected by law – even if the parties later try to finalise the deal privately.”
Mr Garmy said the main motivator for cutting out the estate agent is “potential cost-savings” but he cautions against such a move.
“Bypassing an agent can lead to legal and financial risks, particularly if the agent has already played a role in the transaction.
“The real estate agent acts as an intermediary and expert, ensuring the transaction occurs within a legal framework and in the best interest of all parties involved.”
While it is perfectly possible to buy or sell a house in France without an estate agent, once you have signed a contract with an estate agency, you will very likely have to pay them commission.
“We strongly advise buyers and sellers to respect contractual obligations and seek professional guidance to avoid costly disputes," said Mr Garmy.
