Top 5 Tips to Buy & Borrow in Paris
Purchase like a Parisian would and avoid costly mistakes
1) Retrain your brain to look at Paris as a resident, not a tourist.
Many people feel quite overwhelmed and don't know where to begin as the areas you enjoy as a tourist may not be where you want to live. The good news is that Paris is quite compact and you can get a very good feel of multiple neighborhoods with a few days of research.
Read up on the different areas of Paris. Once you have some target neighborhoods, walk them on different days and at different times of the day – especially later at night – in order to narrow your search scope. Ask yourself these questions in each area: If I live here, where will I shop for food, go out to eat, work out? How far is it to my favorite areas in Paris to spend time, to get to green space, etc?
2) Understand the cost to buy the Parisian apartment you ideally want.
Once you know where you want to live, think practically about how much space you will need and how much you will accept - budget allowing. How many bedrooms and bathrooms do you require? Do you need a separate guest powder room? Can you live without a dedicated dining room?
Research how much Parisian apartments cost in the areas you like for the size you want HERE.
3) Start with a clear financial plan.
Do you plan to buy with cash, take out an equity release (HELOC) on a property in your home country or buy with a French mortgage? It's worth obtaining a free pre-approval to borrow in France from our team as French rates are lower than most non EU countries and a French mortgage may save you thousands each year by avoiding the French real estate tax – IFI.
How much available cash do you have to put into the project? Even with a French)- mortgage, you'll need at least 30% to 40% of the property list price to cover the down payment and closing costs. Inform yourself of the timing needed to release any funds currently blocked in investments. If your investments are generating higher returns than current French mortgage rates, it may make sense to take a French mortgage.
Free French Mortgage Pre-approval to Borrow
4) Don't forget to include a renovation budget.
Most Parisian apartments are not renovated before listing so this means you'll need to plan on spending 1000€ per m2 to paint and update the kitchen and bathrooms, 2000€ per m2 if you include creation of a bathroom, redoing floors and windows and 3000€ to 4000€ per m2 if you do a full redesign with an architect and interior designer. The final budget depends on choice of materials.
5) Understand and anticipate the time to close and cash flow.
Avoid expensive mistakes by being clear on the timing to buy and each step you'll need to have cash ready to transfer. Once you find a property you like and have an accepted offer, it will take 3 to 4 weeks for your French notaire to prepare the pre-purchase contract. You'll need to put a 10% deposit on account with your notaire when you sign this contract. Final closing will take place approximately 2 months after for cash buyers or 3 months after if you are buying with a French mortgage. This is when you'll need to pay the balance of the sales price and get your keys.
Work closely with a reliable currency broker who will advise you when to purchase euros at the optimal moment, personally handle your two cash transfers to the French notaire and ensure you avoid costly delays by getting the transfers there on time. Avoid the impersonal low cost currency trading platforms who are unable to provide these critical services.