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How not to buy a house in Italy: the top mistakes to avoid

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How not to buy a house in Italy: the top mistakes to avoid
A house for sale in the Aosta Valley region of Italy. Photo: Idealista
10:04 CEST+02:00
So you've found your dream home in Italy and you're ready to make an offer? Here are a few pointers on what you definitely shouldn't do next.

If you've long been dreaming of buying your own property in Italy, now might be the moment to take the plunge. Italy is still the only EU country where house prices are actually falling (even if only by 0.2 percent year-on year), and mortgage rates remain low.

"After years of crisis, the real estate market is catching its breath. In fact, in recent years, there has been a recovery in sales and the banks have started to lend again," writes the Idealista property website's blog. "These factors, combined with mortgage rates that continue to decrease, can make this the right time to venture into buying a home."

READ ALSO: What's wrong with the Italian property market?

While conditions are favourable, it might be very tempting to rush out and make an offer on that house you've had your eye on. 

But before you do, take a quick look at our list of the common mistakes made by home-buyers in Italy (both Italian and foreign) and hopefully you'll avoid any problems later on.

Underestimating how long it takes

As someone who bought a house at the end of July (out of necessity, despite knowing it would be a nightmare) I got to spend months in an uncomfortable temporary living situation while the notary, estate agent, and everyone else involved in the sale enjoyed a long holiday.

READ ALSO: Italian problems: Driving seven hours (in a heatwave) to sign a form

In case you didn't know, the whole of Italy grinds to a halt for the month of August (officially. In reality, it's from mid-July to mid-September.) And you won't get much done in December, either.

Instead of fuming with rage, I recommend planning to buy your house at any other time of year - and still being prepared for everything to take four times longer than you might reasonably expect.

Forgetting about the cost of buying

The house might be a bargain but Italian VAT (sales tax, called IVA in Italy) is not. Neither is registration tax, or any of the many other hidden charges that will probably apply when you buy your property. If you're non-resident in Italy or buying a second home, these costs are even higher.

According to Idealista, these taxes and costs usually add up to not-trivial ten percent of the value of your property. Sadly, many a buyer has to back out after realising they don't have the necessary funds available on top of their deposit payment.

READ ALSO: The essential guide to opening a bank account in Italy

Not being aware of extra mortgage costs

Again, mortgage rates are low right now but there are still plenty of extra expenses and taxes slapped on. The mortgage tax is generally two percent of the loan amount.

And don't forget that many Italian banks demand you take out various types of insurance – property insurance, life insurance, and even mortgage insurance, which might be sensible, but is another major upfront cost - often running to thousands of euros.

The dream: but don't bankrupt yourself for it. Photo: Depositphotos

Taking out a long-term mortgage

While in countries like the UK a 25-year (or even 30- or 40-year) mortgage is seen as normal, that's not the case here. Instead, 10 or 15 year mortgages are the norm. Idealista writes: “calculating all the interest on a mortgage with a term of 25 years or more, the house becomes too expensive,”

Taking on too much debt

You might think you can handle a big chunk of debt, but the Bank of Italy would disagree. It advises that your mortgage repayments, when added to any other debts you may have (car payments, credit cards, personal loans) must not exceed 35-40 percent of the total income of the mortgage holders. Some Italian banks are stricter on the percentage than others, but all will turn you down for a mortgage if your debts exceed the 40 percent mark.

READ ALSO: Here are the houses you can buy for just €1 in a Sicilian village

Thinking your property will increase in value

This is far from guaranteed in Italy, as statistics on property prices show. Even when prices are on the increase, the Italian property market for the most part is hardly an investor's dream. While buying a house to live in is one thing, Idealista warns that anyone seeing property here as an investment could end up very disappointed.

Avoiding agencies

Foreign buyers may be put off by the majority of Italian estate agents they encounter. With their sky-high fees (around three percent) and less than impressive sales tactics (which typically include rudeness, showing no interest in buyers or their needs, and leaving houses dirty and cluttered for viewings) you might think you'd be better off with a private sale.

But later in the buying process you'll realise that, while they might not always be so hot on customer service, Italian estate agents are very valuable when it comes to negotiating with the seller on price, as well as in navigating the bureaucratic minefield.

Italy is full of beautiful properties. Photo: D&G Design

Not bargaining hard enough

When Italian estate agents suggest properties that are outside your price range, don't immediately turn them down. Here – and particularly in the south, or outside of big cities – you can bargain much harder than you might expect.

“Many potential buyers ignore properties because they think they can't negotiate on the price,” writes Idealista. “Prepare to bargain and always have a counter offer available.”

In some areas it's not unusual to make offers as much as 20 or even 30 percent below the listed price. Sellers and agents know this, which is why listed prices are often so inflated.

On the flip side, you can expect sellers to bargain hard, too. “Another mistake is to accept a higher price for fear of losing the house,” Idealista adds. “If your budget is 180,000 euros, for example, don't move from there."

"If that's not enough, it's not the home for you."

Getting emotionally attached

“Sometimes buying a home is more of an emotional decision than a rational one,” Idealista writes. While this is a problem with property purchases everywhere, it's an especially big danger for foreign buyers who think they've found their dream home in the sun, perhaps after several costly property-hunting trips to Italy, or years of dreaming about the move. This leads people to rush into making an offer, or pay far more than a property is worth.

Take all the time you need to reflect, and don't let agents or anyone else rush you into a decision. The house might be lovely, but Italy is packed with lovely houses. Make absolutely sure this is the one for you.

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