FOR MEMBERS

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

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
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, it’s not a bad time to do so. Italy is still the only EU country where house prices are actually falling (and have been for some time) while mortgage rates also remain low.

Whether or not house prices do eventually fall due to the coronavirus outbreak and subsequent financial crisis – and there is no real sign of this happening yet – Italy already offers favourable conditions for buyers and a market full of good-value properties.

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

So it might be tempting to rush out and make an offer on that house you’ve had your eye on. But first, take a quick look at our list of the most common mistakes made by home-buyers in Italy (both Italian and foreign), including a few I made myself. Hopefully after reading this you’ll be able to avoid any problems of your own later on.

Underestimating how long it takes

The average time for the completion of a property sale in Italy is 4.5 months, but of course sometimes it takes a lot longer.

This applies particularly if you’re buying a home close to holiday season – August or December, when offices shut down for weeks if not months and everything is on a go-slow.

As someone who once made an offer on a house at the end of July (out of necessity, despite knowing the timing meant it would be a nightmare) I got to spend a few months in an uncomfortable temporary living situation while the notary, estate agent, geometra, and everyone else involved in the sale enjoyed nice, long summer holidays.

In case you didn’t know, the whole of Italy grinds to a halt for summer holidays during the month of August (officially. In reality, it’s often from mid-July to mid-September.)

And you won’t get much done in December either, as Christmas stretches on for a few weeks in many parts of the country.

Instead of fuming with rage, I strongly recommend planning to buy your house at absolutely any other time of year – if you have the choice.

But still, be 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 found they have no choice but to back out after realising they don’t have the necessary funds available on top of their deposit payment.

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 pretty standard, that’s not the case here. Instead, 10- or 15-year mortgages are the norm.

As 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 holder.

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.

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 indeed.

Avoiding agencies

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

But, while they might not be so hot on customer service and have never heard of “home staging”, Italian estate agents are usually invaluable when it comes to negotiating with the seller on price, as well as in navigating the bureaucratic minefield and dealing with authorities.

Some readers do report that private sales have gone smoothly – with the help of a good lawyer, notary, and a few local contacts – but it’s not recommended for a first-time buyer or someone who doesn’t speak the language.

Italy is full of beautiful properties, but they often need renovation work. 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. 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 inflated. Keep this in mind when searching online.

READ ALSO:

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.”

Even if you had your heart set on a property, try to remember that Italy is full of beautiful homes and there will always be another.

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 with retirement nearing after years of dreaming about the move.

This leads people to rush into making an offer, or pay far more than a property is worth.

Make sure you stand your ground, take all the time you need to reflect, and don’t let agents or anyone else rush you into a decision. While some types of property will sell faster than others, the Italian market generally moves at a slower pace than in countries like the UK.

Plus, the house might be lovely, but Italy is packed with lovely houses of all shapes, size and descriptions. So before you sign anything, make absolutely sure it really is ‘the one’ for you.

Read more in The Local’s Italian property section.


Member comments

The Local is not responsible for content posted by users.

  1. We bought a house 5 years ago in a village 2 km above Lake Como. We went to Italy in June and our Real Estate Agent showed us ten houses, and one of them turned out to be our dream house. We gave them an offer which they accepted. The whole process went very smoothly. We did not use an Italian bank, as we had the money ready. It took 4 weeks from we first visit the house till we moved in.

    As we are from Norway we needed to get an Italian fiscal code. This was a part of the buying process.

    We did not use an Italian bank, as we had the money ready.

    This is the Real Estate we used: https://trepievi.com/

    Ti auguro il meglio

    Jo, from Norway.

Become a Member to leave a comment.Or login here.