Sabini & Associates accompanies its clients through all the various stages of locating, negotiating and purchasing real estate, and recommends scheduling a meeting at one of the notary offices with which it collaborates, with a view to obtaining a full picture of the technical and legal aspects of the sale, as well as advice relative to the specific case.
FINDING THE PROPERTY
Sabini & Associates assists and counsels the buyers in searching for their property. Buyers can also, if they wish, give Sabini & Associates a mandate to search for a property on their behalf, and in many cases, in fact, buyers can find what they are looking for in the current portfolio of Sabini & Associates – a property suited to their lifestyle needs and tastes – and undertake negotiations right away.
Once a suitable property has been found, the next step is to present the seller with a formal offer, signed by the prospective buyer. Sabini & Associates recommends indicating in the offer the subsequent passage for the stipulation of a preliminary contract as a notarized deed. This is an intermediate step between the offer and the final contract of sale. At the preliminary stipulation, earnest money will be paid to the seller to secure the offer, and it is therefore preferable that this take place before a Notary, who will also carry out the preliminary controls already at the time of drafting this contract, requesting the technical report (due diligence) to be prepared as required by law by an expert architect or geometer. In some cases, the Notary can also function as Escrow Agent for the amounts entrusted to his custody. The technical report is a very important document in the acquisition of property and Sabini & Associates requires the seller to have it done by a professional prior to stipulation of the preliminary contract rather than before the final deed of sale, so as to anticipate the relative notary inspections at the time of payment of the earnest money, as recommended by the Italian Notary Association.
The earnest money paid at the time of stipulating the preliminary contract in notarized form is usually variable between 10% and 30% of the selling price agreed on, and often the Notary will suggest not only to record it but also to record the payment in the public registries so that the rights of the buyer are fully guaranteed.
The last step consists of stipulation of the final notarized deed of sale, a document signed before the Notary, who performs the function of public official and transfers ownership of the property upon payment of the balance of the price. Usually a few weeks pass between the offer and the preliminary contract, while between the preliminary contract and the final deed about two months are usually necessary, to allow the bank to arrange a mortgage, if necessary, and the Notary to perform the necessary controls that can only be made by a notary, with regard to title to the property.
COSTS THAT WILL BE PAID BY THE BUYER
The Notary’s fee will be indicated in advance, and the real estate agent will request it for buyers not already acquainted with a notary. Sabini & Associates usually organizes an interview via video call or at the notary’s office prior to the preliminary contract, so that the Notary can clarify directly any doubts the client may have with regard to the laws and procedures connected with the acquisition of property.
The real estate agent’s fee: Sabini & Associates applies the usual fee of 3%+VAT on the purchase price for the activity of brokerage carried out on behalf of the buyer. In Italy, both the buyer and the seller pay a percentage to the agency for brokering the sale, generally 3%+VAT each. This fee is paid only in case of closure of the business with a sale, and is paid at the time of stipulation of the preliminary contract, when the earnest money is also paid by the buyer to the seller or, if there is no preliminary contract, at the time of signing the final deed of sale.
Taxes on the property: The taxes for the sale are paid before the Notary at the time of the final deed of sale, when ownership passes from the seller to the buyer. The taxes differ for the purchase of the primary home and the purchase of a second home. The taxes are also different if the seller is a private owner or if it is a construction company/land developer with sale subject to VAT.
In case of purchase of property from a private owner (or business exempt from VAT) as primary home: The purchase of a property and its accessories for use as the primary residence will pay the registration tax of 2% of the cadastral value “once only” before the Notary on the day of the deed. The cadastral income, from which the cadastral value is calculated, is a value assigned by the government to every piece of property, usually much lower than the real price. This is a privilege that is granted to sales between private parties and that are, as such, exempt from VAT.
In case of purchase from a private owner of residential property for use as a second home, the buyer will pay the registration tax of 9% of the cadastral value before the notary on the day of receiving the deed.
In case of sale by a construction company or property developer, subject to VAT: in this case, the buyer will pay VAT, and not registration tax, and will not have the privilege of calculating it on the cadastral income, but it will instead be calculated on the real price indicated in the notarized deed of sale. VAT will be 4% of the price in case of purchase as primary home and 10% of the price in case of purchase as a second home, in both cases it will be paid to the Notary on the day of signing the deed of sale.