Buying Property in Italy: What We Learned on Our First House Hunt

So, so, so much!

There are a lot of things that mimic the way we do things in the States, but there are some things that are pretty different. First and foremost, the buyer and seller agents. They can be the same, or they can be different. But as in the States, the seller agent is working for the seller, so while they have a vested interest in selling the property, keep in mind that they are working for the seller. If you want exclusive representation, have a buyer's agent because they are working for the buyer - and they want to earn a commission. I know I did when I sold real estate in the States.

Scheduling the appointment is not as easy as it is State-side. The seller agent shows the property with the buyer agent. So the buyer agent is coordinating two schedules, so the timing is a bit different. The seller agent has more intimate knowledge of the property and you can ask questions in real time to get the answer to something that, if the seller agent wasn't there, would be a 'let me get back to you on that.'. I like that the seller agent is there for the showing.

The Geometra is a specialized unique position who works as a hybrid between a surveyor, a structural inspector and an architect. They will help you navigate the Italian building codes, manage the transactions on the project, kind of like a contractor, and oversee the entire project. If you are thinking about buying a property that needs work, you should bring a Geometra along with you to the showings. Sometimes, when the seller is motivated and smart, they will pay the Geometra to do a survey and create schematics to show the potential buyer the possible finished product. The benefit to this is that they know what is permit-able by the commune (the local government), so you aren't delaying the purchase and making a smart decision.

If there have been changes to the property made by the current seller, and the changes were not a permitted change, the seller has to un-do the changes before any bank will finance the purchase. If the buyer is paying cash and there is a non-permitted change to the structure or the property, the Geometra may look past the change and allow the purchase to proceed.

I'm going to skip the contract phase, because that's pretty complicated and I'm going to make it its own blog about that aspect.

The Notary is where we, in the States, would close on the deal. The Notary does all of the things that a Title Company would do. They complete the legal due diligence, they collect the necessary taxes, draft the contracts, verify the identity, check for any open building permits, etc, etc. They are much different than what we know in the States.

Paying the commission to your buyer agent is typically 3 - 4% plus VAT (vat is Value Added Tax, a standard tax in the EU), and its paid by the seller to the seller agent and by the buyer to the buyer agent. In past times in the States, the full commission was paid by the seller and then split between the seller and the buyer agent. In Italy, it's paid by each party.

Finding a buyer agent - I actually found a buyer agent through a guy that we watch on YouTube that has a list of agents that he's worked with and recommended them. This was a learning curve for me because I had no idea what to expect when I emailed him with my request.

When we were in Italy for three weeks, we wanted to explore real estate and see what was out there. Initially, we wanted to buy something that was relatively inexpensive and had two apartments. OR buy two inexpensive apartments to live in one and rent out the other. We looked at pretty cheap ones and realized that the pictures never do any justice to the actual condition of the property. Truthfully, we were under no assumptions that we would find a property, but we had to start somewhere / sometime. And this was the best time. The agent that we found asked us to sign a contract, and because I sold real estate for about five years in the States, I totally understood what he was asking for with the contract. He asked that we compensate him for his time when he set up and showed the properties because there was a very small chance that we would put a contract on anything that we found. The fee that he asked for is going to go against the commission that he would earn when we found a place. The contract binds both parties to obligate themselves to work to find a property and make a deal that's going to close.

We started looking before our business had a sale contract on it, so while we had a good budget, we were still hindered by the Euro to dollar conversion and the fact that we wanted two properties on a smaller budget. Now we have a better budget and we are going to look at properties that are going to be our home and our business.

Getting a number - your Codici Fiscale. This number is mandatory if you want to do any kind of government business. But, it's a pain to get. We tried to get it before we wrote a contract, but you have to write the contract, show the contract with the application and your passport, then they will assign one to you. Our agent had an appointment at the office that issues them, but then they realized that there was not a contract on any real estate, so they cancelled the appointment. We have the application already to go, so we will be able to get our numbers as soon as we have a contract on a piece of real estate.

Having an Italian bank account is important to the transaction. The government likes that you are invested in the country by having an account that is based in the region in which you are purchasing real estate. We opened an 'off shore' account through Wise and they are really great. You can transfer funds from your other bank account to that account. When you want to convert to euros, you just complete the conversion and there is a tiny fee. What I like about the Wise account is that the fees are nominal, you can get a debit card, and you can use tap to pay within the app.

So what did we learn? We learned that we have a LOT more to do and learn. We are on a path, and as trite as this sounds, it's a journey. I think all of this would be different if we were just retired and we needed an apartment and a visa that would allow us to live in the country. But, of course, we have to make things complicated for us because we want to have a business and an income. So here we are, navigating Italian real estate, thankfully with a smart and knowledgeable agent who is working for and with us.