141 Pre-compromesso

..........this sounds like a bit of a sharp practise......ignore it or change your estate agent!

Oh, why not name & shame these people?

I am in the first stages of buying a property in Italy and when I offered my agent the 5% initial deposit he said that I should not bother.

His explanation was that the pre-compromesso was not binding on us so there was no point.

As a result he does not require any monies until the compromesso.

This is only my experience....others may know different.

The standard practice is to pay a small deposit to the vendor (cheques should be made payable to the owner of the property and not the agent). But matters concerning the proposta d’acquisto irrevocable needs careful consideration because once the vendor accepts your offer, it becomes legally binding. What you also need to be aware of is that in Italy there are two types of deposit (caparra) and this should be made clear to you from the outset because they both have far reaching consequences:

1) Caparra confermatoria: The law states that if either party refuses or fails to perform the contract without lawful reason they will liable for damages. In the case of the buyer, he/she forfeits the deposit paid. In the case of the vendor, he/she forfeits double the deposit paid. However, the law also states that with the caparra confermatoria either party has the right to enforce the contract as well as receive damages. In other words, the vendor is forced to sell or the buyer is forced to buy the property.

2) Caparra penitenziale: Here, either party has the right to recover damages in respect of a breach, but only through the deposit. Again, in the case of the buyer, he/she forfeits the deposit paid. In the case of the vendor, he/she forfeits double the deposit paid.

John Murphy makes a valid point about throwing caution out of the window when buying a property overseas (April issue) and I cover the preliminary contract (February issue), highlighting the need to be extremely vigilant when signing documents you don’t really understand. Don’t accept things at face value and don’t let anyone pull the wool over your eyes.

What you can do to cover yourself when you make an offer to buy is to draw up a Scrittura privata (private agreement) containing conditional clauses to ensure that the purchase goes ahead only if certain conditions are met. For example: subject to a satisfactory survey of the property etc. Moreover, you should state that the deposit acts as a deposito cauzionale (guarantee only) that is refundable if conditions are not met.

If you are unsure then seek proper, professional advice and ensure that your position is protected. I cannot overemphasise the importance of this point. You should try to do this as early as possible in the process. Don’t leave it to the end when it may be too late.

agree with charles..... it is suddenly becoming common for these deposits...but there are always ways and means ..... his advice is best get proper help ..... it always seems to me that the hardest parts about buying are the first two satges.... which is where you have options to ratify all the details of the property..... if the details are not met you have the option to pull out..... so before signing check and double check that what you sign is to your benefit..... this is where your agent must be of help and if not then walk away..... and also make sure everything is written down.... the final act then becomes a simple process...much more structured than the previous two parts or the one if just doing a compromesso...

life is much more complicated when you are relying on others knowledge.... most people having not lived in italy all their life do not have that common sense bred from a life in a country.... everyone here most probably knows the vague process of buying property in the uk.... and most italians would have the same general knowledge.... i think you have to balance out this lack of knowledge with a certain degree of trust in the agent..... and any bad feelings about a deal then get things checked....by someone outside the deal.... saying that...most sales go ahead withiout problems....because you want buy and the seller wants to sell.... and the agent wants their commision...

so dont think everyone is trying to rip you ... and dont go to extremes about employing god knows who to check and double check everything... most people that come to italy have a good vaguish idea of the process and a lot of funny italian names about each bit..... if you continually here from someone trying to sell you something that you shouldnt worry about this or that... it ll get sorted then start worrying... if the place is as you want and at the price you want.... then in general it will just go through with very few problems...

... often the best deals arent... so check out other properties and prices... and research the area... i get slapped down often enough about cautionary visions of illegal builds... poisonous areas and criminal activities... someone mentioned it doesnt affect most people... you will find the villagers where the whole place slipped off the side of the hill because of illegal deforestation... thinking otherwise... good local knowledge can help... and always leave the sun tan lotion and beach mood at home until the house deal has been done....

John is quite right...don't assume that everyone is out to get you...there are some true professionals around. But although no one wants to impugn the integrity of agents, the key word is integrity. Remember, just possessing a licence is not enough!

When an agent starts telling you that there is no need to have things checked by an independent party...or that there is no need for a survey etc...that's when the warning bells should start to ring. Reputable agents will not object to you carrying out checks of your own. If they do, then they may well be hiding something and my advice would be to avoid them.

Charles

When I was making my prelimary enquires for a suitable property through the web, I came upon a place in Abruzzo. The property seemed good value for money.

The agent said that he had many enquires, and if I didn't come to see it very soon, it would be sold. As a way around this problem the agent suggested that I send a "deposit" of Eur 2000 to him, and he would tell the owner that he had the deposit, but not actually give it to him. He said that he couldn't guarantee that the owner wouldn't sell it to anybody else, but he would do his best to make sure that he didn't. So if I didn't like the house, then I wouldn't lose the deposit.

Naturally, I didn't accept his generous offer! Just as well, because when i did go to see the house (a couple of weeks later) I didn't like it. The agent even drafted in an "english speaker" to try and persuade me that these "leetle owses" were all being snapped up, the price was rising, how he would buy some if he had the money spare etc...

The house was advertised on his site at E42,000, after I had viewed and got back to England the price rose to E45,000, and a couple of weeks later I was told that it was "sold". A couple of weeks after that it was back on his site at E52,000!

Now I'm all for free enterprise (sorry M Chirac), but I didn't come down in the last shower. From my desk here in London I see the same houses being advertised for months and months on end. Indeed when I went that first time I saw a couple of fantastic flats - one of which had been on the market for 2 years, and the other for 3 (and they still are). This was with an honest local (registered) agent - and she said to me "don't worry, you have plenty of time to decide.

I think a lot of people are getting carried away, based on the experience of rapidly rising house price in the UK over the last few years, but you must remember that the Italian population is set to shrink by 20%+ over the next few decades, and there is already a glut of abandoned properties in some areas.

All that said, I am buying, but not as an investment, but as somewhere to go and soke up the atmosphere (and of course the wine!)

Cheers

i am not sure about the shrinking population..... italy has a lot of immigration which in turn will help to alleviate the problems of an older level of people... yes the birth rate is low .... but there is an expanding chinese community.... and large eastern / slav immigration.... some might regard this as a problem but those that come and work hard are seemingly more than welcome.....

the rural property situation is also changing.... slowly... so i agree there will not be massive hikes in prices.... but italians are also starting to apreciate their rural heritage..... along with massive pollution problems in all the major cities.... retrictive car use and high living costs they are just starting to see the advantages of not living in a city .......

... and finally we know of two sets of investors in this area...italian... who are buying up all sorts of rural properties while the price is still reasonable.... they plan to re sell... and not to the english.... the romans... they are often in abruzzo buying.....

if you think the area is only just over an hour from the rome outskirts along a good motorway its not hard to see why...

thats my view of the situation anyway.... also price hikes are common...the first house we attempted to buy after we got back to england the agent phones and said if we still wanted it there was someone else very interested who were willing to pay more...we had to offer another e5000...what do you do.... your a long way away...you might have really loved the place.... after a bit of dicussion we said no... an english company this one.... a couple of weeks after we bought the place we now live in the owner of the first property gave us a call.... why had we not bought his place... he didnt know of any other buyer... and now was willing to do a deal without any agents....we passed on it....

i think the danger of some of these situations is the pressure you feel under not to have made a wasted journey..... often people take these buying tours of three or four days..... in spain this sort of industry does not have much of a name..... here it seems to me its at a lower level but the pressure you put yourself under and the pressure put on you to buy , notarys and banks all connected to the agents and ready to get you to sign papers before the flight back home.... dont forget there is no cooling off period on these deals...

so just be sure to take a good look around and sign nothing that your not sure of

Well, I'm not sure that at influx of [i]chinese people[/i] is going to solve Europe's demographic problems....more like add to them...