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Important Facts to know before buying real estate In Italy
So, you have seen the movie "Under the Tuscany Sun". You like how the female protagonist of the movie bought a villa and decorated it. Well! That is a good inspiration, but we have to accept that reality is very different from motion pictures. It is not that simple to go and purchase real estate as shown in movies where the female protagonist just steps out of the bus and buys a villa. Hollywood is hollywood... the chances they have to find an old lady in Tuscany who sells a villa by a 'God' sign are as good as finding a rent control apartment in New York City. Not long ago somebody told me he was looking for a house near Rome for 18.000 Euros. Ok it may not be mathematically impossible but he has a better chance to buy a winning lottery ticket.
So let's see what we have to do realistically.
The first step is to research the process. You have made a good start. You are reading this article. Well let not waste any time and get down to business. As we said, you need to conduct your research on the process of buying a home in Italy. A big help would be the internet. Today in the times of World Wide Web, you find information on any aspect of the buying process by few simple clicks of your mouse. Any good search engine can provide you with various links to the subject. As you read on and educate yourself, you will realize that there are many differences, both in the terms and about financing options.
It would be prudent to hire a legal help here in the United States as you begin the buying process. Also, it is suggested that you hire a legal help back in Italy too. This legal representation that you hire should have had experience in undertaking such international transactions.
Ideally, do your reading about the real estate market in Italy. As we mentioned earlier, some terms may be different. When we say terms, it does not restrict it to terms of contract, it can also mean, the terminologies used in the real estate market. We in the United States are used to terms such as apartments, condominiums and houses. But you may come across terms such as seminterrato, bilocale, attico, villetta a schiera or cieloterra. It would be wise to familiarize yourself with these terms so that you can select the type of Italian real estate you are looking for.
If you are into the market to buy or sell a house, experts have always suggested that you should contact a Real Estate agent. Well! They are not wrong. A real estate transaction usually starts in the region of $100,000, a massive financial undertaking. This suggestion holds true in anywhere, and even in Italy.
Another important step would be educating yourself with the various application you need to file, contracts that you would be required to sign and the applicable fees. Do not be surprised when you see a high set up fee. You see that real estate market is different in Italy then, here back at home. Unlike the United State which considers real estate as an investment, Italians are known to buy real estate to keep. Back here in the United State you may have seen many television advertisements about lender fees. Different lending companies compete for the precious customer, YOU. But, this scenario does not exist in Italy. Therefore, the retail banks are less competitive and aggressive. Net Net! Be prepared to pay for high cost as transaction fee than compared to home. Also note that you would be required to pay agent fees and taxes (which may be higher there).
That brings us to another important aspect "Mortgages". Well! You do have two options. You can either take a mortgage in Italy. Or you can get financing with your local bank here back at home. However, your bank would require offering banking facilities in Italy too. You can also approach any international bank which provides this service. Last option would be to get a home equity loan here in the US and then wire the money to Italy. Sice usually interest rates are slighly lower here and it is easy to get and or pay off the loan it may have its advantages. Considering the difference in the two markets you have to accept that it is more likely that you would not be able to get schemes such as Forget PEP, endowment and interest-only mortgages in Italy. These products and financing methods which we take for granted are a relatively recent development even in our real estate markets. Here In United states nowadays we encounter many other mortgage loan schemes, from adjustable rate mortgages to interest-only and negative amortization loans to the conventional 30-year fixed rate mortgage. But things are different in Italy. Do not get surprised when you see a different number of years mentioned under the section of repayment. At time you may come across bank in Italy asking you to repay your mortgage in 15 years or 10 years. Some are also known to have stipulations such as the loan to be repaid by your 70th or even 65th birthday.
By Paolo Nascimbeni
REAL ESTATE - HOMES in DERWOOD