In Paris, Romancing the Deal
Gregory Morrow
June 23, 2005
In Paris, Romancing the Deal
By DEBORAH BALDWIN
"ROBYNN ROCKSTAD-REX had a large house in Seattle. But after her husband
died two years ago she ached for a little piece of Paris. "It's the one
city," she said, "where I could smile again." She found herself hunched over
the computer scouring real estate listings until all hours. "It was an
obsession for a while," she said.
A place of one's own in the city of light: it may sound like one of those
impossible dreams, brought down to earth by the rude realities of doing
business in a country where notoriously slow-moving bureaucracies can give
apartment hunting a nightmarish hue. But this quest ended happily.
Working with a firm called Paris Real Estate Finders - one of several such
services to have sprung up in recent years - Ms. Rockstad-Rex located a
pied-à-terre near Montmartre within two weeks. Taking possession took
several months, but Finders held her hand the whole time, and Ms.
Rockstad-Rex suggested it was actually kind of fun.
Paris, that fantasy destination for so many expats and luxury goods
connoisseurs, has become an unlikely destination for Americans hoping to
acquire second homes. The prospective buyers are so plentiful, in fact, that
they have spawned a cottage industry of local fixers who specialize in
ushering Americans through the 7 percent transfer fee, codified inheritance
rules, requisite "notaire" and other bewildering rituals of French real
estate.
A strong euro has scared away some buyers, but others have clearly decided
that it's a sign to buy in. Though the euro has sagged a bit in recent
months, many economists see it bouncing back, indicating that now may be the
time to buy.
Some buyers are also motivated by prices below those in New York and a
conviction that they can only go up. "Let's say there are worse investments
you can make," said Ms. Rockstad-Rex, asserting that her apartment has
appreciated 50 percent since she bought it in 2003.
Of course, when the alternative is investing in municipal bonds, who
wouldn't prefer a private hideaway stocked with French armoires and raw-milk
Camembert?
Douglas C. Gaddis, and his partner, Dr. Gary Begin, found themselves lusting
over photographs in real estate agency windows during regular trips to
Paris. Last year, armed with listings from Paris Real Estate Finders'
electronic database, they zeroed in on a one-bedroom in an 1890's building
designed by Charles Plumet, and bought it based on photographs alone, like a
mail-order bride.
The couple, who live outside Washington, flew to Paris to renovate, hiring a
contractor "who came up the stairs with an air-powered jackhammer," Mr.
Gaddis said with awe. The investment all told was about $340,000, he said.
That's not so bad considering where prices sit in Washington and New York.
The average cost of a square foot in an older building in the fashionable
Sixth Arrondissement in the third quarter of 2004 was 655 euros, or about
$800, compared with $942 in Greenwich Village, an equivalent New York
neighborhood.
For those with the means, renovation à l'Americaine can be a fait accompli.
Alon and Betsy Kasha, an American couple who develop and sell properties
(abkasha.com), put their pieds-à-terre on the market as finished luxury
products complete with two-year warranties. Along with such authentic
touches as herringbone parquet, they note, Americans want creature comforts
like shower stalls and washer-dryers.
Ms. Kasha, formerly in the marketing department at Cartier, supplies décor,
mixing flea-market finds and contemporary French furniture.
Their turn-key apartments, situated in the fashionable Sixth and Seventh
Arrondissements near monuments like the Eiffel Tower and stores like Armani,
are aimed squarely at well-heeled Americans who associate the good life with
France and do not worry over currency fluctuations. The apartments have
asking prices of roughly $400,000 to $1 million and "are like a collection,"
Mr. Kasha said.
"We're treating this as fashion," he explained.
As he and other interested parties like to point out, Paris appears to be a
more solid investment than, say, gold. In the third quarter of 2000 the
average apartment in the Sixth Arrondissement was 460 euros a square foot,
in contrast to the 655 four years later.
"It's a really good investment right now," said Sharon Lagerberg, who bought
a place near Montmartre in October with her husband, Dr. Steven Lagerberg.
It cost 432,000 euros and has "already gone up 50,000 euros," she said.
Bilingual and versed in currency trading, mortgage rates and property taxes,
services like Paris Real Estate Finders feed the fantasies of Americans
locked in their Dilbertian cubicles by sending them links to Web pages lush
with descriptive prose and seductive photographs. In true American spirit,
they offer efficiency, too. No more slogging from listing to listing in a
city where each microneighborhood has its own microagency. No more
translating phrases like "poutres exposés" ("exposed beams").
Doing business in a foreign language is only one of the challenges. Closings
are typically two-hour rituals that can include a dramatic reading of a
30-page property transfer document. It's "a holdover from the Revolution,
when people with limited education began buying houses," explained Dr.
Edward Wheatley, an American professor who bought an apartment in an Art
Deco building with his wife, Mary Mackay, through Paris Real Estate Finders
(parisrealestatefinders.com).
There are no official French statistics on the number of Americans who buy
apartments in Paris, though real estate agents said there has been an uptick
this year.
The average buyer, said Olivier de Ripert, a real estate agent, is a
hotel-weary 50-something who visits often and longs for a retirement haven,
preferably near a good pâtisserie.
Mr. de Ripert, who serves what is widely considered to be the most desirable
neighborhood among wealthy Americans, Île-St.-Louis, said he started seeing
more American noses pressed to his window after the November elections. More
recently, politics seemed less relevant to clients than a chance to move
some of their money overseas, he said.
Michele Imhoff, a French banker who has been helping Americans line up
mortgages in Paris since 1991, said the same thing. "Now Americans do want
to diversify their portfolios and investments, and the best way to do it is
buying something in Europe."
Ms. Imhoff, the manager of the United States representative office of the
Banque Transatlantique in Washington, said she provides free advice - plus
mortgage applications and the like translated into English - to any client
with one or more accounts. For information, call (202) 429-1909.
For some buyers the fluctuating euro (trading this week for about $1.20),
continues to have a chilling effect, said Darrell Halverson, who runs Paris
Real Estate Finders with his wife, Stephanie Freedman. But with French
mortgage rates still around 3 percent and the market "marching up steadily,
1 percent a month for 40 months," he noted, many "are poised and ready to
leap."
Toward that end, Finders has compiled not only a sophisticated database of
listings but also a rapid response mechanism that can shoot the right ones
to browsers who fill out a short questionnaire at the company's Web site.
The firm charges about 2.5 percent of the selling price for help with
various aspects of finding and financing a property. They deal with one
client at a time and say they had more business last year than they could
handle. Rival services include Abodes Abroad (abodesabroad.net). Other
self-taught go-betweens include Adrian Leeds, an American who publishes a
subscription online newsletter (frenchpropertyinsider.com) and organizes
sales seminars in Paris and the United States (a two-hour consultation is
$250).
Rental income sounds like easy money, but that's not always the case. Though
French co-ops are more laissez-faire than their New York counterparts - no
grueling interviews with board members - they don't necessarily welcome
strangers coming in and out of buildings. And absentee owners often find
themselves giving a hunk of the income to other fixers to safeguard the
plumbing and keep track of the keys.
Many buyers have an exaggerated idea of how much rental income can be
generated, said Marianne Le Berre, a French architect who helps people find
and fix up apartments. "After you deduct fees and taxes on renting, it's 2
percent," she said.
But for those who have found their dream pied-à-terre, economic cycles, the
bureaucracy and taxes are beside the point. It's satisfying to know "you can
negotiate your way through a different legal and cultural system to make a
home for yourself in another country," Dr. Wheatley said. Right now he and
his wife are busy preparing to move from Clinton, N.Y., to Chicago. But they
say they are delighted to know that one day, when the rat race ends, "the
place is going to be there when we can use it more freely."
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pltrgyst
<gregorymorrowEMERGENCY...@earthlink.net> wrote:
>http://www.nytimes.com/2005/06/23/garden/23paris.html
>
>June 23, 2005
>In Paris, Romancing the Deal
>
>By DEBORAH BALDWIN
It took you six days (or 8 days following their Internet
publication) to violate the NYT copyright? Hope they sue you.
-- Larry