For the buyer, a lifetime sale can give you a property at a discounted price at considerably reduced prices if you are willing to invest in your future property many years before the acquisition proper. In a Viager agreement, a person agrees to sell his property to a buyer for a down payment called „bouquet“ in France and regular bar rates for the rest of his life. In addition, the seller lives in the house for the rest of his life. It is only when the seller dies that the buyer is free to take over the property. In essence, the buyer bets in a lifetime on the seller`s remaining life. Depending on the life of the life recipient (the seller), if he lives longer than expected, the rents he will have to pay will probably cancel the initial benefits of life. With a lifetime mortgage in progress, there are no monthly payments to make, so no risk to seniority fees and no monthly fees. However, as noted above, interest rates are further aggravated and the effects must be taken into account. Typical Sellers of Viager Real Estate are people aged 70 and over who are looking for additional income in retirement. While most life-long agreements are offered by individuals, insurance companies can sometimes offer such contracts. The presidents also used the „Viager“ system: Charles de Gaulle acquired his lifetime property of woodwork „in life“ and J F Kennedy also used the system for real estate investments. Signing a life agreement is like the game of Russian roulette for buyers and sellers.
It is a life-and-death game where both parties bet on the seller`s lifespan. If the seller were to die very quickly after the signing of the contract, the buyer will receive the property for a fraction of its real value, since under the French right of reversion, the entire property is automatically taken over after the seller`s death and the entire real estate value is exempt from the seller`s residual estate. However, if the buyer dies in front of the seller, his children are required to continue paying the life if they want to maintain the agreement. Thus, if the market value of the property is 200,000 euros, the occupied value of the house will be about 100,000 euros, although this figure is also variable. If the bouquet is 30,000 euros, the remaining 70,000 euros will be paid in installments for the rest of the seller. As a general rule, a Viager contract does not apply to a lender or insurance company. It is signed in the presence of a notary responsible for monitoring the agreement over the years.