The Real Estate Deal of a Lifetime

The following article is from the new book Uncle John’s Uncanny Bathroom Reader.

(Image credit: Flickr user Ming-yen Hsu)

There’s an old saying that the three rules of real estate are “location, location, location.” In France, there’s a type of real estate transaction where what really matters is “mortality, mortality, mortality.”


One problem that confronts cash-strapped senior citizens in many parts of the world is how to access the equity in their homes without having to sell the house and find another place to live. In the United States, so-called reverse mortgages are one solution: seniors receive a lump sum or monthly payments from a lender and continue to live in their homes. Then, after they pass away, the home is sold and the proceeds from the sale are used to repay the loan, along with any accrued interest.

In France, a different system is often used. Homes are sold using a system called en viager, or “for life.” Typically, the buyer pays a lump sum to the seller up front, plus a monthly payment, or “annuity,” until the seller passes away. The seller owns and gets to live in the house until they die, and then when they pass away, the buyer inherits the house. Because many years may pass before the buyer can move in, the buyer purchases the house at a heavily discounted price, called the “occupied value,” which may be as little as 50 percent of market value. Because no lenders are involved, no money is borrowed and no interest is paid.


But there’s a catch: the buyer must continue to pay the monthly annuity to the seller for as long as the seller lives. If the seller drops dead soon after agreeing to the deal, the buyer inherits the property for pennies on the dollar (actually, for cents on the euro). But if the seller lives for many years, the buyer must continue to pay the monthly annuity…even if the total amount paid exceeds the market value of the property. If the buyer ever defaults, they get nothing; the seller keeps the money and the house. The system is designed to give seniors the security of a guaranteed monthly income, while giving younger buyers at least a chance at buying a property for a fraction of its actual value. It’s estimated that as much as 15 percent of all real estate sales in France are transacted using the en viager system.



(Image credit: Google Street View)

Perhaps the most famous example of the en viager system is the deal struck in 1965 between a 47-year-old attorney named André-François Raffray and one of his clients, a 90-year-old woman named Jeanne Calment. Calment owned a large apartment in a beautiful old building in the center of Arles, a city in the south of France. Raffray agreed to pay her 2,500 francs each month (about $500) for the place until she died. The deal apparently did not include a lump sum paid up front.

One of the risks associated with en viager transactions is that the seller can lie about their age or pretend to be sicker than they really are, in order to extract larger monthly payments from a buyer who believes the seller might die at any minute. That was not a problem in this case because Raffray knew his client well. She really was 90 years of age, and furthermore, she’d been a smoker for nearly 70 years. Other than walking and getting around on a bicycle, which she was still able to do, she didn’t exercise much. She had a serious sweet tooth (she ate two pounds of chocolates a week), and she drank a lot of cheap red wine as well. Back in 1965, $500 a month was a substantial amount of money, but Raffray figured he wouldn’t be paying it for very long. Calment had already exceeded her life expectancy by about 20 years and it was just a matter of time before the cigarettes, the chocolate, and the cheap red wine did her in.


The deal was struck, the papers were signed, and the waiting began. Calment remained remarkably vital despite all her bad habits, which Raffray was now paying for, since his monthly payment of 2,500 francs was Calment’s largest source of income. In February 1970, she celebrated her 95th birthday, then in 1975, she celebrated her 100th. That year she gave up riding her bicycle, but she was still healthy enough to walk all over town to thank the people who’d wished her well on her birthday.

Five years later Calment celebrated her 105th birthday. She still lived on her own, still smoked, still ate her chocolates, still drank her cheap red wine…and still collected the 2,500 francs that Raffray sent her every month. Five years after that, in 1985, she celebrated her 110th birthday. She was still able to get around on her own but her vision was starting to fail, so she moved out of her apartment and into a nursing home. Because she was still alive, the empty apartment remained her property and Raffray could not move in. And he still had to pay her the 2,500 francs each month.

At age 113 Calment was recognized by Guinness World Records as the world’s oldest living person. Two years later she celebrated her 115th birthday, and the following year she became the first person ever confirmed to live to the age of 116. Others claimed to have lived that long, but only Calment had indisputable documentary proof that she really was that old. The following year she became the first person to reach the age of 117, and the year after that, the age of 118. Then she turned 119, and in 1995 she celebrated her 120th birthday. It was at about this time that the World’s Oldest Woman Ever finally gave up smoking after 99 years—not for health reasons, but because her eyesight was so poor that she could no longer see well enough to light her own cigarettes. She didn’t like having to ask other people to light her smokes for her, so she gave them up. (At her birthday party that year, someone asked her to describe her vision of her own future. “Very brief,” she replied.) And Raffray still continued to pay her 2,500 francs every month.


That year—1995—turned out to be a milestone for Raffray, too. Reason: he died. Over the previous three decades he’d paid Calment the equivalent of $184,000 for her apartment—nearly triple what the place was worth—and he never got to move in. After his death, his widow, Huguette Raffray, decided to continue paying Calment the 2,500 francs a month rather than forfeit all the money that had been paid in over the course of 30 years.

In 1996, Calment celebrated her 121st birthday with a public party, but when she turned 122 in 1997, her nursing home announced that her health was declining and she would no longer make public appearances. She lived for another five months and passed away on August 4, 1997, at the age of 122. As of 2016, she remains the only person in history confirmed to have lived past the age of 120.


Because Raffray’s widow Huguette kept up the en viager payments to the very end, when Calment died, Huguette inherited the apartment and was able to move in. Huguette Raffray must have been relieved that the 32-year drain on her family’s finances had finally ended, but she remained gracious. “She was a personality. My husband had good relations with Mrs. Calment,” she told reporters.

So how did Jeanne Calment feel about profiting so handsomely at the expense of the Raffrays? “We all make bad deals,” she joked with Raffray when he visited her on her 120th birthday, just months before his own death at the age of 77.


The article above is reprinted with permission from Uncle John's newest volume, Uncle John’s Uncanny Bathroom Reader. The 29th volume of the series is chock-full of fascinating stories, facts, and lists, and comes in both the Kindle version and paperback.

Since 1988, the Bathroom Reader Institute had published a series of popular books containing irresistible bits of trivia and obscure yet fascinating facts. If you like Neatorama, you'll love the Bathroom Reader Institute's books - go ahead and check 'em out!

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