In some cases the first stage in buying a home is the signing of a purchase proposal which is drawn up by the estate agent and is presented to the seller on the buyer’s behalf. However, it is binding only on the seller and you are free to accept or reject the offer within stated period. If you accept the purchase proposal, both parties then sign a preliminary contract.
Signing a preliminary contract
Preliminary contract may be drawn up by the vendor, estate agent, notary or lawyer and may be hand-written or a standard printed document. On signing the preliminary contract, both parties are bound to the transaction and it’s possible to register it to prevent the sale of the property to multiple buyers. The contract contains the essential terms of the sale, including full details of the property, details of the vendor and buyer, the purchase price, how it’s to be financed, the closing date, and any other conditions that must be fulfilled before completion. Some agents provide an English translation of a contract, although it is recommended to hire your own translator or interpreter. You should ensure that you understand every clause in the preliminary contract. A sale must be completed within the period stated, usually six to eight weeks.
Preliminary contract is not a binding agreement, as either party may it and it is for this reason that a substantial deposit is usually paid by the buyer at this point. The buyer’s deposit is forfeited if the buyer pulls out and a sum equal to twice the deposit would be paid to the buyer if the seller pulls out. The substantive deposit provides the necessary encouragement for both parties to proceed to complete as the financial penalty for failure to do so is usually too painful.
If the foreign buyer is buying with a mortgage, it is vital to organize a binding mortgage agreement. In any case, it is important to remember that Italian law requires all contracts relating to land or buildings to be in writing, signed by both parties.
The third stage relates to the completion formalities, which normally take place in the offices of a local notary. Italian notaries have a legal monopoly on the legal work involved in actually transferring the legal title to Italian real estate and special duty of correctly drafting the Purchase Deed (Rogito), to ensure their proper execution, registration, and payment of all Italian property taxes.