#7 Tips to Purchasing an Apartment

At the end of September, I reached a big personal milestone for my time living abroad. If you saw my Insta Story a couple of weeks ago, you probably noticed I made an announcement that I was moving from Paris. In the end, I was being a bit dramatic. I moved a little outside of Paris, which is only 15 minutes from where I live now by metro. But the big news is that “mon cheri” (Jérémy) and I bought an apartment!!!!

Sep 19, 2019, will be a date that will be long-lasting in the memory books. This is the day we officially received the keys and deed to our new apartment. However, there is a lot of behind the scenes work, sacrifice, wins and struggles that got us this far. We are beyond excited to officially be owners, and we’ve learned so much thus far about the process of purchasing. If you are currently living in Paris and dabbling with the idea of purchasing I highly recommend it. 

So how did we manage to purchase? 

Just to rewind a little bit. I would say we began to play around with the idea of purchasing about 2 years ago. First, we wanted to buy an investment property that we would rent out, then we decided it would make the most sense to invest in a principal residence since we plan to be in Paris and it doesn’t make much sense to continue paying rent that goes towards someone else’s mortgage. So we began to explore neighborhoods that we would want to live in and that we could afford. Real Estate in Paris is pricey, and establishing what aspects are important to you is really helpful to guide your research. The goal for us was to have more space, and the value for the space we were finding in Paris was way out of our budget. 

Disclaimer, we financed our project with our own hard-earned money. We didn’t have assistance from our families for the down-payment, nor existing savings we could tap into. So establishing a solid financial plan was a big part of the process for us.

After months of planning, research, meetings with banks, delays due to administration, countless trips to home department stores, we finally have the keys in hand and couldn’t be happier. We started renovations 2 weeks ago and we are taking on the challenge to do everything ourselves to save since we didn’t factor work into our loan.  I still need some time to process everything, but while things are still fresh in my head I wanted to share tips or things to think about if you are thinking about purchasing. 

#7 tips to purchasing an apartment

1. Establish your project

It seems like something simple, but deciding what you want to do is key. Do you want to purchase an investment property that you will rent, or a principal residence? This will be the starting point to be able to begin researching what type of property you want to purchase. Making a list of criteria that are deal breakers for you (first floor, no work, no elevator, distance from metro, etc) is also important once you start looking to help reduce wasting time visiting things you know you will not put energy into.

2. Research

Explore neighborhoods, new development projects, walk around and check out listings at agencies to get an idea of pricing. There are a lot of new developments coming to Paris in the coming years from the expansion of metro lines for the ‘ Grand Paris project”, to the city’s preparation for the 2024 Olympics. It is a good time to see what opportunities you can take advantage of. Having a good idea of the landscape of the neighborhood you would like to live and the price associated with apartments is a great starting point. 

3. Get your coins right

Establish a financial plan- This is crucial!!! Saving is important and having your finances in order is a must.

In France, the type of work contract you have is really important when trying to rent or purchase an apartment. As a foreigner, you are often in a precarious work situation. I have always had short term contracts (CDD) since I moved here, so the work contract was a tricky part for me. Luckily Jérémy had a CDI (long-term contract) so we at least had one stable contract on paper.
 
In the eyes of the bank, it is ideal to have a CDI , but you can also manage to purchase with a CDD if you are able to advocate that you have the potential to have your contract renewed or that you have proof of maintaining consistent work. 

Like most places, being a freelancer or having a non-traditional work contract makes things a bit tricky but not impossible. Banks don’t like to take risks so they tend to take more caution with people who don’t have traditional income.  Most banks will consider freelance work if you have proof of consistent income for the past 3 years. So if you haven’t been freelancing for at least 3 years e it is important to try and still save to show the bank you are able to manage your money.

TIP: My biggest advice is to be strategic. I had to put my project to purchase on hold for close to a year, when I left my job and I was doing freelance/work. I didn’t know I needed to show 3 years of consistent income, even though I ended up finding a new job, outside of my field, which paid significantly less than what I was making before, but they were offering me a CDI contract. I ended up taking a pay cut, so I could advance with my project to purchase. 

Here is an idea of cost you should be saving for:

10-15% Apport (down payment) of asking price

Agency fee (if you use an agency)

Notary fee- 8-10% of the purchase price (it is impossible to avoid these fees)

Renovations/ Repairs

TIP: I would also recommend taking advantage of a savings plan with your bank (CEL/PEL) that is specifically dedicated to purchasing ana apartment. We opened a CEL for 18 months to give ourselves the discipline to save for our down payment.

5. Search for free money

I am by no means wealthy (yet), and we had to finance the down payment with our own money (no trust fund to tap into, 401K, etc). So finding ways to save a significant amount of money in Paris was hard. So you have to get creative with the reality of your financial situation. 

If you want to purchase in Paris specifically, check out whether you qualify for a 0% interest rate loan which helps a lot with notary fees or your down payment. Each program has its specific criteria, but it is worth it to explore. 

For example: 

Pret à taux 0-PPL- 0% interest rate -Caps at 24,200 € for a single individual or 39,600 € for 2 or more people

Conditions:

Reimbursement in 15 years- This is helpful for down payment or doing repairs

Some of these loans have specific conditions for the location of the property you will purchase, your income, and if you will be doing renovations to make your space for ecological.

6. Partner up

Whether you are purchasing with your significant other, sibling, or best friend. I think it is really helpful to partner up with someone like-minded. This is a big project and commitment, and it is nice to be able to have someone go through the process with you, as well as to split costs. There were so many times throughout the process where we hit roadblocks and lost motivation, so I am very thankful I was going through the process with someone else for mutual support. 

7. Anticipate more time

To give yourself peace of mind, it is always better to anticipate things will take longer than they are supposed to. This will save you a lot of energy not to get upset when you learn documents are missing from your file, or that there are delays. We signed our offer for this apartment March 18th and we were supposed to sign the 3 months after as per the standard process. We finally got the keys Sept 18, so this process has been an extreme exercise of patience. 

Well, that is all for now. I hope this post provides a bit of insight. Stay tuned for more details on the purchasing process and status updates on our renovations. 

Feel free to email your questions, about purchasing in Paris at lavielocale@gmail.com, I plan to do a Q/A post as well.