Q: I would like to buy and Italian property but have a limited budget. I heard of interesting opportunities after the credit crunch: a builder is offering some brand new homes for sale 50% off. In particular, I have been offered to pay just 20% of the purchase price and take over an existing 30% mortgage. The vendor is prepared to renounce the remaining 50% because the house had been initially booked by another buyer who had initially paid 50% deposit and unfortunately now does not have any finance to go ahead with the purchase completion due to credit crunch. Would it be safe for me to complete and sign the final title deed under those circumstances?
A: We are familiar with similar scenarios above, which are not uncommon in these days. In order to increase the safety level of a transaction where there is a price reduction and/or a buyer change, we suggest carrying out some additional activities, such as the following ones:
1) make sure the vendor is not facing severe solvency issues;
2) check the sale agreement between the vendor and the previous buyer has been properly and definitively terminated;
3) verify there are no pending disputes on the offered property;
4) support the purchase agreement between you and the vendor by proper evidence and documents to justify said lower sale price also for tax and money laundry regulation purposes.
The activities above are particularly advisable also because the figures you mention above seem rather extreme.
Should the deal above not go through, you can find many other interesting opportunities. For example, there are several fully finished developments that were almost sold out a couple of years ago. The few units without a buyer might be offered for a net price which does not include the international intermediary commission (easily ranging between 25% and 40%). Also, there are 1 euro properties in Salemi (Sicily), free tax properties (save 10% taxes) in Abruzzi, properties just inherited by non Italians who need to sell quickly, even if for a lower price, as well as many other opportunities.
Each scenario is unique and a careful legal review is recommended prior to committing to buy or paying any funds to the vendor.
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