Property price indexes for various regions are published by some Italian property magazines (e.g. Ville & Casali), although these should be taken as a rough guide only.
There has been evidence of dual pricing in the past, and the practice of quoting higher prices to foreigners, although now rare, still occurs. However, prices advertised abroad are usually identical to those advertised in Italy.
When buying a property in Italy it pays to haggle over the price, even if you think it’s a bargain (don’t show too much enthusiasm or the price likely to increase suddenly!). Don’t be put off by a high asking price, as most sellers are willing to negotiate. Many properties sell for a lot less than their original asking prices, particularly luxury properties priced at over €1 million.
Sellers generally presume that buyers will bargain and rarely expect to receive the asking price, although some vendors ask an unrealistic price and won’t budge a euro! In popular areas (e.g. the Italian Riviera and Tuscany), asking prices may be unrealistically high particularly to snare the unsuspecting and ignorant foreign buyer. It may be worthwhile obtaining an independent valuation (appraisal) to determine a property’s ‘true’ value.
Italians drive a much harder bargain than most foreigners when buying a property, particularly an old property. They’re often astonished at the prices foreign buyers are prepared to pay for nondescript homes in uninspiring areas, although they never complain about foreigners pushing up prices when they’re on the receiving end! Many Italians think the British are particularly insane for buying up their tumbled down farmhouses and crumbling palazzi. (Few foreigners share the British passion for renovating old homes, although they have a grudging admiration for their painstaking and sensitive restorations.)
If you’re using an agent, you should ask him what to offer, although he may not tell you (and indeed shouldn’t if he’s also acting for the seller). If you make an offer that’s too low you can always raise it, but it’s usually impossible to lower an offer once it has been accepted (if your first offer is accepted without discussion, you will never know how low you could have gone!). On the other hand, if you make a very low offer, an owner may feel insulted and refuse to do business with you! If an offer is rejected, it may be worth waiting a week or two before making a higher offer, depending on the market and how keen you are to buy a particular property.
If you make a low offer, it’s wise to indicate to the owner a few points of weakness (without being too critical) that merit a reduction in price. If a property has been realistically priced, you shouldn’t expect to obtain more than a 5 or 10 per cent reduction, although cash buyers in some areas may be able to negotiate a considerable reduction for a quick sale, depending on the state of the local property market and the urgency of the sale. An offer should be made in writing, as it’s likely to be taken more seriously than a verbal offer. Always be prepared to walk away from a deal rather than pay too high a price.
If you simply want to buy a property at the best possible price as an investment, then shopping around and buying a ‘distress sale’ from an owner who simply must sell is likely to result in the best deal. Obviously you will be in a better position if you’re a cash buyer and are able to close quickly. If you’re seeking an investment property, it’s best to buy in an area that’s in high demand, preferably with both buyers and renters. For the best resale opportunities, it’s usually best to buy in an area or community (and style) that’s attractive to Italian buyers.
You should find out as much as possible about a property before making an offer, such as:
- when it was built;
- how long the owners have lived there;
- whether it’s a permanent or holiday home;
- why they’re selling (they may not tell you outright, but may offer clues);
- how keen they are to sell;
- how long it has been on the market;
- the condition of the property;
- what the neighbours and the neighbourhood are like;
- local property taxes and insurance rates;
- not least, whether the asking price is realistic.
Timing is of the essence in the bargaining process and it’s essential to find out how long a property has been on the market (generally the longer it has been for sale, the more likely a lower offer will be accepted) and how desperate the vendor is to sell. Some people will tell you outright that they must sell by a certain date and that they will accept any reasonable offer. You may be able to find out from neighbours why someone is selling, which may help you to decide whether an offer would be accepted. If a property has been on the market for a long time, e.g. longer than six months in a popular area, it may be overpriced (unless it has obvious problems). If there are many desirable properties for sale in a particular area or development that have been on the market a long time, you should find out why.
For your part you must ensure that you keep any ‘sensitive’ information from a seller and give the impression that you have all the time in the world (even if you’re desperate to buy immediately!). All this ‘cloak and dagger’ stuff may seem unethical, but you can be assured that if you were selling and a prospective buyer knew you were desperate and would accept a low offer, he certainly wouldn’t be in a hurry to pay you any more!
Before deciding on the price, make sure you know exactly what’s included, as it isn’t unusual for Italians to strip a house or apartment bare when selling and remove the kitchen sink, toilets, light fittings and even light switches! If applicable, have fixtures and fittings listed in the contract. It’s also wise to take photographs if a property contains original architectural details such as stone fireplaces, door and window lintels, and garden statuary, which may be removed or replaced by copies.
This article is an extract from Buying a Home in Italy. Click here to get a copy now.