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Mandatory real estate diagnostics and their impact on prices

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Mandatory real estate diagnostics and their impact on prices

In France, any real estate transaction is subject to a certain number of imperative conditions and to the delivery of administrative documents, including real estate diagnostics.

These obligations came into force in 2006 for real estate transactions and in 2007 for real estate rentals. In continuity, it is mandatory since 2011 to include these diagnoses in all real estate ads (press, window displays, digital media).

What is a real estate diagnosis?

A real estate diagnosis is an in-depth study of the property carried out by an independent diagnostician to the parties (seller, buyer, real estate agency).

Beware, these documents have a validity date, it is advisable for sellers (real estate agency or individuals) to be vigilant to this one because its exceeding could block or at least delay a sale.

The list of mandatory real estate diagnoses depends on :

- The type of property sold: condominium lot or individual property

- The date of the building permit for the property

- The age of the electrical or gas installations

The establishment of these documents falls upon the responsibility of the owner.

The mandatory real estate diagnoses for a sale

- The Energy Performance Diagnosis (DPE) for all residential properties except those known as VEFA (sale in the future state of completion) or new builts

- Diagnosis concerning the presence of asbestos in the dwelling for all residential properties for which the building permit was issued before January 1, 1997

- Diagnosis concerning the presence of lead for all properties whose building permit was issued before January 1, 1949

- The electricity and/or gas diagnosis if the installations are more than 15 years old at the time of the sale

- The Carrez law surface of the property if it is a condominium lot

- The documents relating to non-collective sanitation if the property is not connected to the local sewage network

- The diagnosis on the presence of termites and/or merules if the property is in an area covered by a prefectural decree on this subject

- The state of risks, geohazards and pollution

- The diagnosis relating to the surrounding noise

- The housing information booklet for dwellings and their outbuildings if the building permit or if the prior declaration was filed after January 1st 2023

What impact on the real estate market?

According to a study by the SeLoger group, thermal leakers now account for nearly 20% of the inventory of properties offered for sale in mainland France, nearly double the 11.2% in 2020. This increase is probably a consequence of the tightening of the rules and the evolution of the legislation concerning the renting of housing qualified as "thermal leaker", leading to a certain panic of the landlords.

Today, a bad score on the DPE of his property has become a real reason to sell, in anticipation of a loss of value, or in reaction to the energy crisis.

Impact on the price

The increase in constraints related to the DPE is thus beginning to have an impact on real estate prices. Indeed, Opinionway published in a survey that 79% of sellers (primary residence) say they are open to negotiations and price reductions due to poor energy performance. 40% of future buyers consider that a bad DPE is now a negotiation argument. In this logic, the negotiation margin becomes more important for energy-intensive housing.

In metropolitan France, the prices of these thermal flats have increased by "only" 3.7% over the last two years, unlike the rest of the market, for which this increase is to be multiplied by two.

So why not renovate your property to improve its performance in depth and boost the sale price? Unfortunately it would seem that this calculation is losing in most cases since a renovation for example of the insulation will remain higher than the loss on the selling price in response to the poor energy rating, and this despite the aid put in place by the government.

Impact on research

As a logical consequence of these new regulations around the DPE, its rating is starting to become an important search criterion, in the same way as the budget, location or surface area. Some real estate gateways are even starting to include it as a search criterion.

Be careful, for this criterion to have a real value in online searches, it is imperative that it be correctly filled in. A professional ad will be more serious than an ad from a private individual who may not have had the diagnosis carried out or who may not have been able to fill it in correctly on the gateway.

So to be best accompanied in your real estate project, whether it is selling or buying, trust the expertise of Côte d'Azur Sotheby's International realty real estate agents who will know how to best guide you in your criteria and your steps. Contact us to launch your project :