AGENT PROPERTY SHARING

TAKING CARE WITH BUYING ON THE COTE D'AZUR

I am always delighted -  OK, a bit smug  - when I come across great properties thanks to my detective work. The weeks leading up to a client arriving are intense, but it always pays off and it is a wonderful feeling when I do find that special property.

However, this year  I have been experiencing a whole new level of service from agents and developers. They have started to call me when they have a new property on their books and ... 'would I like to see it before anyone else does?' Private sellers, too, are contacting me on a regular basis. (Although I have to say this market tends not to turn up that many interesting finds in my experience - but I always keep an eye on it.) Even a contact at a Syndic (apartment management company who are able to act as estate agents) called me recently to suggest some apartments they wanted to sell. This week-end my popularity hit a new high, however. Chasing up Notaires for clients is a game those of us in the business are use to playing. This weekend, however, a Notaire phoned me about  a couple of million-euro properties available for sale.

The word is that my clients are serious and always buy. Now although I am flattered by this attention, and being the first through the doors is obviously a huge advantage for my clients, I am in no doubt about the motives of the agents and sellers. They are entirely self-interested. If they can sell a property quickly and directly, they stand to make a bigger profit. Once a property goes 'public', competing agents will fall over themselves to make the sale even if it is not directly on their books. This means that the original agent (who holds the 'exclusive mandate') is obliged to split his or her commission with a second agent, and sometimes even a third is involved. On the buyer's side, this means the margin for negotiation is less as the pie gets cut thinner and thinner.

Many agencies on the Côte d'Azur are part of the SIA group. SIA is like a club which agencies pay to join. It allows them to access and share each other's properties via a computer listing system. The 'exclusive mandate' agent lists his or her property, throwing it open to all the other agents in the SIA club, but the original agent still retains a cut of the commission (usually 50 %) if sold by one of these secondary agents.

Agents and property finders who are signed up to SIA are very keen to tell buyers that this gives them access to a much wider number of properties. In one sense it does and I can see it has its uses as a search tool. But in reality, agents are often not that happy to share and will certainly do what they can to keep a good property to themselves. Although those in the SIA club are obliged to list apartments and villas, they can make it difficult for other agents to see them. If it is a particularly interesting property, they will often try and sell it before it goes on the site. Hence why I get so many calls from agents wanting me to bring them clients first as I don't share the commission with them.

SIA is the reason if you go to a Riviera-based estate agent or property finder's website these days you will often see a huge number of properties. However, when you call the agent you are more than likely to be told: 'Oh that one is sold...' (usually months ago). It was never their direct property to start with so they have no idea it is sold until they check the listing. They have probably never even been to visit it. But having so many in the shop window is a good tactic to get you to call them and start talking.  The next question is usually, 'what are you looking for? We can do a property search for you....'

In fact what they actually do is called 'being an estate agent'. Many agencies on the Côte d'Azur - particularly the Anglo-focused ones - have cottoned on to the fact that 'property finder' or 'property finding' sounds as if they are working for you. However, there has to be a conflict of interest in there, no matter how you dress it up. If I hire an estate agent to sell my property, I don't want him or her to be working for the other side as well. As a seller, I want the best price I can get. And no matter how nice and charming an agent is to your face, the agent wants the best commission he or she can get. It's not complicated.

One concern I have is that the SIA listing has actually created a competitive first-to-the-post situation. While this works in favour of my clients since I am getting first pick through direct tip-offs from the original mandated agent, I am seeing consequences for some buyers. In an aggressive and competitive market like Nice, for example, some agents are pushing properties on to clients that they have little or no knowledge of in the hope they make the sale before someone else does. Under SIA agency sharing, the pressure is on for an agent to get a seller to commit quickly to an offer before another agency comes along. The agent accepts an offer and then 'blocks' the apartment from being shown by other agents.

A seller I know whose apartment is up for sale in Nice has serious legal issues in her building (an illegal restaurant that is in long-term litigation with the Syndic). But you would probably only know this if you have some connection to the owner and the original agent. And if you are one of literally hundreds of agents chasing this apartment, chances are many will not know or think to ask the right questions (and some unscrupulous ones will try and cover it up - and I have this as a fact). The hope is, then, that the Notaire picks up on any problems at the Compromis stage. But not all Notaires are perfect, plus by this point the buyer has wasted considerable time and money on a deal that should by rights fall down.  

Many agents in Nice and the Côte d'Azur are good, professional and careful. I am happy to have a very good relationship with these agents. They claim that they have always shared properties, it is just easier now with a one-stop site.  But I see how it works daily with the less meticulous agents and 'free' property finders and there are serious issues for the buyers. With big money at stake, this is not a market where one wants to be taking risks nor to make decisions about property without being fully informed. I want an agent to know the owner and I want to find out the history of the property before I go any further with a serious offer. It just makes sense.