THE BUYING PROCESS IN ITALY AND DIONISI'S ROLE
Buying property in Italy follows a slightly different procedure than that of the other Countries.
The phases that form the buying process of a real estate in Italy and the role of Dionisi Property Search Ltd are described here below.
1. Points to consider before starting
2. Searching for a property
3. Viewing properties
4. Decision to buy
5. Follow-up formalities
6. Purchase Expenses
1) Points to consider before starting
Generally, people buying abroad will employ the services of some type of property agent familiar with the country to help with the purchase. In Italy, it is strongly advised to use a qualified property agent (Mediatore) as these agents must be registered at the local Chamber of Commerce, are highly qualified and strictly regulated. They have a duty by law to act in good faith to their clients throughout the property sale. This system offers vendors and purchasers the comfort that they are protected from dishonest traders.
Before starting the search it is always advisable to set a budget and stick to it. Remember to include the renovation cost in this budget if you are planning to buy an old house. This kind of cost should not be underestimated as it could double the price calculated for the purchase. If a mortgage is needed to buy the property this is the time to try to arrange it as future negotiations can depend largely on the financial arrangements being in place.
DIONISI is a qualified Mediatore, listed at the Rieti Chamber of Commerce and this allows us to look for the best solution for you. We are legally authorised to be involved at every stage of the buying process through to completion, giving you the ease and comfort of dealing with just one company, saving that way both money and time.
When budgeting for the purchase, we can advise you of costs that need to be taken into account and give you guidelines for costings of any renovation work required. If needed, we can put you in touch with firms that specialise in providing mortgages for foreign properties.
2) Searching for a property
If you were buying a property in Italy from abroad directly, your first step would be to contact the local Italian Estate Agents. There are three main obstacles with this:
a. The language barrier
b. A regular Estate Agent's client is the vendor (and especially in a small Italian town, probably a personal friend). His interest is to sell the house, and at the best price for the vendor only (and for his percentage of that price). His particulars and photographs of the pretty, rustic cottage in the countryside will not show the large modern development being built next door or mention the leaky roof. In your own country, viewing this property would be an inconvenience, but when it is one of the houses viewed in a short trip to a foreign country, this would waste valuable time and be greatly annoying.
c. In Italy negotiations between private people are still very common and these situations can easily give way to misunderstandings due to scarce knowledge of the problems relative to a property sale.
DIONISI's staff in Italy are constantly looking for the best property for you, that fits your specifications. In any case we supply you with all necessary information, including documents and photographs which help you to have a direct contact with the property.
3) Viewing properties
Once you have found a number of properties to view, your next step is a visit to Italy for viewings. At this point you might become aware of the organizational difficulties of a property viewing trip.
DIONISI will take care of you starting from your arrival in Italy. Once you are happy with the properties we have found you to view and are ready to travel to Italy, we will arrange the viewings to fit your visit, accompanying and assisting you during the viewings.
DIONISI PROPERTY SEARCH Ltd assists you starting from your arrival in Italy. Once you have selected a number of properties and established the date of your arrival, we will arrange all appointments on different properties and accompany and assist you during the viewings.
4) Decision to buy
In most private property sales the work carried out by the Notaio (Notary), Mediatore (Intermediary) and Geometra (Surveyor) covers the whole buying process and, unless particular problems are envisaged, it is extremely rare for the buyer or vendor to employ an additional lawyer to act on their behalf.
Purchase proposal - When you have decided on a property to buy and have agreed the price with the vendor, you might be asked to sign a Purchase proposal and pay a small deposit (which is deposited in the Agency). This holds the property until the Preliminary Sales Contract or the legal Sale Agreement has been drafted and signed. Before signing the Purchase Proposal, it is advised to check all documents relative to the property to avoid any unpleasant surprises.
DIONISI will help you to negotiate the best price possible for the property.
We will arrange the survey and searches, with any paperwork translated, if necessary.
Often you find a property that wants or needs renovating. DIONISI will help you to receive detailed quotes of these works using local firms and geometras.
Preliminary Sales Contract – The agreement is drawn up into a contract by the Mediatore - the Contratto Preliminare di Vendita (Preliminary Sale Contract) or Compromesso di Vendita (Sale Agreement). This is the most important deed in the process. It is a legal agreement to complete the purchase and is binding on both parties. It includes a description of the property (and surrounding estate), the agreed sale price, method of payment, date for completion and get out clauses (such as failure of buyer's mortgage application or discovery that the house is encumbered with debts).
At this stage a deposit is paid (10% - 30% of the purchase price) by the purchaser. The "get out" clauses mentioned above are important because, apart from these clauses, either side would now be financially penalised if they decided to withdraw.
DIONISI will draw up the Sale Agreement for you and will translate the contract so that you are completely clear about the details. As required by law, we will word the contract appropriately for your situation and to cover your best interests. If you would like to use an independent lawyer, we can put you in touch with local specialists in the property field. We will help you with the transfer of funds to an interim Italian bank account and prepare the payment of the deposit.
Title Deed (Rogito) - The Notaio is a public official appointed by the Purchaser. He makes sure the sale is carried out correctly and legally but he is NOT a legal advisor to either party in the sale (buyer or vendor).
He is responsible for conducting all searches relating to the current title of the property and checking that no mortgage or charge exists over the property. He also checks that there is nothing planned (by the local authorities) that might affect the value of the property.
On the agreed Completion Day, the Notaio will read through the deed to both parties and it is then signed. At this stage the purchaser pays the remaining money for the property, the Notaio's fees and the Registration and Transfer Taxes (it is the purchaser's responsibility to make sure these funds are in place on time). The Notaio then instructs the Estate Agent or vendor to hand over the keys.
CONGRATULATIONS, THE HOUSE IS NOW YOURS!!
Finally, the Notaio registers the title deed with the Catasto (Land Registry) and pays your Registration and Transfer Taxes. You will receive a copy of the deed to prove your ownership. This takes about a month but a copy of the original signed deed can be provided on completion day.
DIONISI will again provide translation of necessary documents and offer professional advice to ensure a smooth conclusion to the whole process. We will set up your fiscal code (necessary to pay your property taxes) and generally liaise with you, keeping you up-to-date with progress until the moment to sign the contract with all necessary documents comes.
5) Follow-up formalities
Once the proud owner of your new property, there are several small formalities still to complete. The local Police need to be formally notified of the purchase. You will need to switch over the utility bills (water, telephone, electricity, gas) into your name. If you have bought an apartment, the Condominium Manager will also need to be informed that you are the new owner.
We also offer other important follow up services, which include:
- arranging insurance, organising removals firms;
- organising repairs and restoration work (either simple introductions to local building firms or a fuller project management role);
- an ongoing property management service including account handling, bill payments, or even acting as a letting agent on your behalf.
6) Purchase Expenses
To help you budget for your purchase, we have listed the costs that you, the purchaser, are liable for:
- DIONISI's fees. These can vary from 3 to 5% of the purchase price depending on the complexity and value of the services. For payment schedule, see Terms and Conditions. These charges are standard and may not be appropriate in every case. We will quote for clients with special requirements.
- Registration Taxes. As well as Stamp Duty, there are several registration stamps that are required. These are normally lumped together and charged at 10% of the Cadastral Value (or 3% if bought as first house), while for land, if you are not a farmer, the registration stamp is 18% of the declared value. In addition to these there are fixed stamp duties.
- Notarial fees. The cost of the notary depends on the declared purchase value. (*Every property has 2 values - the actual value/purchase price and the declared value. The declared value is the price found on the deed and is a value placed on the property, based on the Government's legal valuation. The Registration Taxes are based on this value, which is usually considerably less than the actual price. This means the expenses are less than they might initially appear).
- Estate Agent fees. Unlike in other Countries, both Vendor and Purchaser pay fees to the Estate Agent in Italy. These fees tend to be 3% - 5% of the purchase price. They would only be applicable if a client had requested a further search and the property had been found by DIONISI through a different Estate Agency. These fees can generally be negotiated down by us.
- Geometra's (surveyor's) fees. DIONISI's survey department will take care of the title searches and basic survey but if a fuller structural survey is required the additional costs are covered by the Purchaser.
- Legal fees. As already mentioned, the Italian process is very different from the UK and a separate lawyer representing each party is rarely used. Part of DIONISI's role is to take care of all the legal matters (alongside the Notary, Estate Agent and Geometra) that arise for the purchaser. However, if a client wishes to take further independent legal advice, the cost would vary depending on the work requested.
- Bank charges. For transfer of purchase funds to Italy.