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The scam of the €10 villas in south of France

Pay €10 to enter a "miracle" lottery for the chance to win a dream French home. If you don’t win, you get your money back. It seemed too good to be true, and it was. Three people have been charged with fraud. The victims are in shock.

The scam of the €10 villas in south of France
File photo of a typical village in Provence where if you were unlucky you could win a villa for €10. Photo: Rob Campbell

“A house for €10, this is serious – it’s now!” read the enticing offer on the website of Leonardo Simpatico, a property agent from Aix-en-Provence. Sadly it was not serious but that did not stop several unlucky winners falling victim to a scam French investigator Dominique Moyal described as "well put together".

An investigation by authorities in France this week revealed how 51-year-old Simpatico organized an internet lottery offering people the chance to win their dream home in the south of France.

The catch? It seemed there was none. Participants had to pay €10 to enter and if they didn't win, they were promised their money back. This was done to avoid the lottery being illegal.

Thousands are believed to have taken part, with investigators believing Simpatico raked in around €400,000 from participants, French radio Europe1 reported on Friday.

A total of six houses or apartments were up for grabs, which Simpatico claimed he had bought from the real owners, media reports revealed.

One of the unsuspecting winners was a 23-year-old woman named only as Roxanne.

She believed her dream had come true when she was handed the keys to a 110 m² house, but that dream was soon shattered.

“Like everyone else, I trusted him” she told Europe1. “This was a new lottery in France. I was so happy. It was a dream," Roxanne added.

The problem was, Simpatico had not completed the deals for any of the properties, which remain in the hands of the original owners.

Now, Roxanne faces the prospect of losing her new home.

“I am afraid of losing the house. If they take this away from me, my dream goes up in smoke. I would have to find a new apartment and rebuild everything.

Simpatico, his daughter, as well as a notary in Aix-en-Provence were arrested this week and placed in custody in Marseille. They were later charged with fraud, operating an illegal lottery and illegal betting.

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PROPERTY

Courtier: Should you hire a broker when buying property in France?

If you're researching the French property market, you might have come across mentions of 'courtiers' - here's what they do and whether they are necessary.

Courtier: Should you hire a broker when buying property in France?

The French ‘courtier‘ is usually translated as a broker, and the Notaires Association describes their role like this: “the broker is a true intermediary in banking operations. His/her role is to negotiate the best rates for you, but not only that: they will also find the most advantageous financing conditions for the realisation of your project.”

Essentially they act as an intermediary between you and the banks, so they’re only required if you need a mortgage or a loan in order to buy your French property. 

Their job is to research the best deals for you and then to help you put together your application and ensure that all your paperwork is correct – unlike the notaire, instructing a courtier is not a required part of the process, so the decision on whether to instruct one is up to you. 

So is it worth it?

Among French buyers, around 30 percent of mortgages are obtained using the services of a courtier, and this rises to 60 percent among young, first-time buyers, who generally find it harder to access credit.

Some of things to consider are your level of French and confidence in negotiating French bureaucracy, your financial situation (since French mortgage lenders tend to be stricter than those in the UK or US) and whether you currently live in France or not (since there are extra hoops to jump through for overseas buyers).

READ ALSO Is now a good time to buy a home in France?

“Things have changed,” Trevor Leggett, group president of Leggett International estate agents, told The Local. “It’s now more important than ever to work closely with a reputable broker.

“In France it is all paper-based, very old-school and extremely bureaucratic, a different world entirely to the UK. Preparing the client “dossier” so that it will be accepted is an art form.”

READ ALSO MAP: Where in France can you buy property for less than €100k?

He advised non-resident international clients, particularly, who may not be au fait with the French system to seek the help of a broker who knows the ropes.

“The question is no longer really about savings,” he said. “It is about finding a bank that can actually lend to the client profile, interests rate are secondary. 

“It occasionally happens that one bank can be played off against another, or to shop around, but it’s a rare event nowadays.”

READ ALSO Revealed: The ‘hidden’ extra costs when buying property in France

And he had no hesitation in recommending that prospective buyers find a broker to sort out the financing.

“The lending market has tightened for international buyers and a good one is worth their weight in gold,” he said.

READ ALSO EXPLAINED: Time-frame for buying and selling property in France

In France, you make an offer on a property and then you begin the mortgage process (while in the UK it’s the other way round) so problems in getting your mortgage approved could lead to you losing your dream property.

“[Using a courtier] can be the difference between buying and not,” added Trevor.

“It’s not just any possible language barrier – but understanding the process and the different players in the market.”

How much?

The cost of hiring a courtier is borne by the buyer – but how much do they charge?

The courtier usually charges a percentage of the total mortgage amount – fees must be fixed in advance and are only payable once your mortgage application has been approved. 

Fees vary between different areas and different businesses, but the average fee is €2,000, which amounts to around one percent of the purchase price.

Many brokers set a minimum amount – around €1,500 – for smaller loans, and take a percentage of larger loans, so how much you pay depends on your property budget. 

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