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PROPERTY

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

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.

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

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

  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.

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PROPERTY

‘It’s so frustrating’: My 25-year Italian property renovation nightmare

When US-based Davide Fionda embarked on renovating his mother's Italian property, he couldn't have imagined the obstacles and the timescale in store.

'It's so frustrating': My 25-year Italian property renovation nightmare

Building a home in Italy was almost inevitable for Davide, as he’s been visiting the same area in the Le Marche region, where his Italian-born mother grew up, since he was five years old.

Although he lives in Boston, US, and speaks with a charming East Coast twang, he’s also an Italian citizen and has long dreamed of having his own place to stay for the summer.

He began making this dream a reality back in 1997, when a barn that had been in his mother’s family for generations, in the village of Schito-Case Duca, was damaged by an earthquake.

“My mother, who had both her mother and sister in Italy, decided that it would be really nice for us to build our own new home instead of relying on family to host us each time we visit,” Davide said.

“The goal was simple. I would acquire the barn from my mom, renovate it and move in for the summers, as I’m a college teacher and can spend time in Italy,” he added.

“Simple” the goal may have been, but the project itself proved anything but, as Davide came up against unforeseen bureaucratic problems, legal hiccups and personal disappointments.

READ ALSO: The hidden costs of buying a home in Italy

As a former entrepreneur in his professional life, he said he’s “used to getting things done”, owning five companies and selling three.

But conquering Italian property renovation is his biggest challenge to date: “Never in my life have I had so many complications as I’ve had with this house,” he told us.

The earthquake-damaged barn. Photo: Davide Fionda

“In the beginning, I knew exactly what I needed and the costs to carry out the project. My mother was, and is still, living in the United States: the project started when she was approached by her godson, who is a geometra (civil engineer), to help her rebuild this barn.

“I started with what I could control. I sat down with an architect and we created a design. I did research on furniture and fixtures. But then the problems started,” Davide said.

His mother wanted a simple design: an open plan house with floor-to-ceiling windows facing the mountains, spanning two floors – a ground floor and a first floor for the bedrooms.

When they went to look at the progress in 2004, he said they were “horrified” at what they saw.

Instead of windows across the front as we asked for, with views of the spectacular Gran Sasso mountains, he took the entire view with two hallways for entering the property and for the bathroom. The bedrooms upstairs were unusable,” he added.

Davide describes himself as “not a typical Italian”, at two metres in height ,and says he always looks for suitable showers and beds when visiting Italy.

It was one of the reasons building his own home was so attractive, as he could custom-make it to fit his needs.

READ ALSO: What taxes do you need to pay if you own a second home in Italy?

But when they viewed the build, he discovered the first floor had ceilings of just one metre and 40 centimetres – not liveable for most people, never mind someone with Davide’s towering frame.

The results didn’t match the renovation plans that had been filed with the comune (town hall) – they wouldn’t have been approved otherwise, as Davide discovered Italian regulations deemed this height of ceiling in a bedroom uninhabitable.

He said he grew up with the geometra and knew him well, saying they were “best friends”. However, on raising the problems with him, Davide said the building professional “refused to fix the house”, adding, “he took my mother’s money and built a house with no bedrooms”.

He said his mother decided to stop construction after spending almost $100,000 on a house that they “could not live in”, adding that they “returned many times over the years to see the shell of the building that we thought we were going to call our home”.

READ ALSO: My Italian Home: How one ‘bargain basement’ renovation ended up costing over €300K

Faced with a stalled project and unsure what to do next, Davide tried to sell the property but got nowhere. He said the “market wasn’t right” for selling it, so he considered his options for fixing the botched renovations to date.

His Italian property project has been stalled for over two decades. Photo: Davide Fionda

Then, eventually, in January of this year he decided “he was sick of looking at it and it was time to act”.

He intended to use Italy’s Bonus ristrutturazioni (Renovation bonus), which allows homeowners to apply for a 50 percent tax reduction on carrying out renovation work.

On asking for professional opinions on whether the house qualified for this bonus, he said he asked five different people and got five different answers.

In the end, he discovered it was eligible and so he could, in theory, proceed with his latest plans.

READ ALSO:

The aim is to create his mother’s original vision – an open plan space with huge windows overlooking the mountains and bedrooms on the first floor – but habitable this time.

Since the beginning of this year, however, Davide has been stuck and hasn’t made progress.

Setbacks have included trying to get a permit to renovate the house, which has proved difficult since the first geometra reportedly didn’t update the changes to the building.

This thorny issue goes back to exactly who owned the house, as Davide told us it had been sectioned off and parts of the house were owned by various members of the family.

The building headaches roll on for Davide. Photo by Martin Dalsgaard on Unsplash

“Italian law makes you want to rip your hair out,” he said.

Getting the deed in his name has been a huge obstacle in itself, as his mother wasn’t the sole owner and some parts of the land that belonged to her were never recorded.

It’s meant months of waiting while archives have been searched and deeds have been drawn up and transferred, made all the trickier by coordinating it all from thousands of miles away.

Plus, the house category was never changed to a residential one, listed previously as farmland and therefore illegal to live in.

It’s just more unexpected bureaucracy for a project that seems to have no end.

“It has been months and months of all these twists and turns, it’s so frustrating,” he told us.

“This has been a 25-year nightmare,” he added.

A partly restored, but unliveable barn for Davide now. Photo: Davaide Fionda.

Although Davide had originally planned to sort out the more practical parts of the project by the end of May, with a ticket booked to Italy to choose the windows, he’s still stuck in the paperwork part and can’t move forward.

Nothing has happened since January. Three or four times I said, ‘screw this’. But it’s not in my DNA to give up,” he said.

Although he has a strong will, the house has taken its toll on him.

Every time we go, this house stares us in the face and it’s upsetting. Family always ask us, ‘when are you going to finish the house?’ It’s a real source of heartache,” he told us.

From this point, he hopes the paperwork will be completed by August and then he can meet with the contractors to get the process started.

That in itself was a tall order, due to the construction demand and shortage of building companies Italy is currently experiencing.

READ ALSO:

It’s a problem made even more challenging by the fact that he’s based in the States and had to find a company that would apply for the credit for the bonus on his behalf.

Despite it all, he’s hopeful that he will get the house they dreamed of by next August and says he’s learned a lot about renovating property in Italy.

For other would-be home renovators, he advised people to “adjust their timeframe expectations” and expect “anything to do with land or real estate to take forever”.

So what is his secret for not giving up, despite the rollercoaster of events and emotions?

It seems he’s holding on to his vision of blissful summers in il bel paese.

“The beauty of Italy is to be, sit in a town square and have conversations,” he told us.

“It’s a beautiful thing.”

See more in The Local’s Italian property section.

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