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Carlisle Mitchell - Realty Investor

Carlisle Mitchell - Real Estate Investing Tips

By Carlisle Mitchell | Real Estate Pro in Houston, TX

When in Rome... Buy Real Estate

MARKET OVERVIEW

The housing market is depressed. Prices have fallen steadily since 2010, continuing their decline this year. This has resulted in a buyers’ market, said Vittorio Barbera, a law partner at Barbera & Associati in Rome who specializes in real estate transactions. He said he had seen prices fall by as much as 50 percent in some cases, affecting everything from prime historical buildings in Rome to homes outside the city. “If someone is interested,” Mr. Barbera said, “he can find a lot of opportunities right now.”

Flaminia Cantamaglia, a notary, said declines in prime areas of Rome had not been so steep — more like 5 to 10 percent — though she did acknowledge precipitous dropoffs elsewhere.

Alessandro Antonelli, a Rome-based economist, predicted that property prices could fall 15 to 20 percent further in the next two years, or simply remain stagnant. In his view, this is an exceptionally good environment for buyers who do not need financing, as “cash is king.”

The slump is attributed to a number of factors, including the euro zone crisis and austerity measures like higher property taxes. Italian banks’ unwillingness to lend has stymied real estate activity. Even prospective buyers who do not need financing are holding back to see if prices drop further.

WHO BUYS IN GREATER ROME

Most of the homeowners in the Sabina region are Italian, although there are a few Americans and Northern Europeans. Fianello has three year-round residents, according to Ms. Spinola; the rest of the properties in and around the village are either vacant or used as weekend homes.

In Rome itself, Americans and Northern Europeans make up the bulk of foreign homeownership. Russian and Chinese buyers are beginning to make their presence felt; many are expressing interest in rural properties, said Ms. Spinola.

BUYING BASICS

There are no restrictions on buying property. As in many other European countries, transactions are conducted by notaries. Mr. Barbera recommends that foreign buyers also hire a lawer, even though that is not standard practice among Italians. “Attorneys know the law of real estate acquisitions, on tax, and can help with the preliminary agreement, which is a binding agreement between the parties stating the purchase price and conditions of the transaction,” he said.

Even if foreign buyers have an excellent financial history and are able to pay 20 to 30 percent of a property’s asking price, they may not be able to obtain a loan from an Italian bank in the current climate.

LANGUAGES AND CURRENCY

Italian; euro (1 euro = $1.26)

TAXES AND FEES

The notary fee and transfer tax are paid by the buyer. The former is about $3,117; the latter is about $4,987 if this villa is a first home, or roughly $9,974 if it is a second home. The annual property tax is $1,186. If a buyer chooses to hire a lawyer, the fee could run anywhere from $2,500 to $6,000. The agent’s fee is 6 percent of the sale price, divided equally between buyer and seller.

 
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