Real estate commission in Italy
How do Italian real estate agencies operate? Which can one trust? And…what’s the deal about commission? Mastering the basics of the real estate market, and knowing the facts about real estate commission, is a crucial factor for all prospective buyers.
Naturally the realm of Italian real estate agencies, called agenzie immobiliari, has its own rules and regulations. At a first glance these may appear strange to a foreigner, but all they are is different.
An important element to keep in mind is that not all property sales in Italy are brought about by real estate agents. In fact, some purchases are privately handled, i.e. decided upon and negotiated by the vendor and buyer directly.
Also, there are other sales agreements handled by what Italian law calls a mediatore, i.e. an intermediary in charge of counseling the parties and handling their relationship.
This said, the great majority of the many foreign buyers who envision investing in Italian real estate choose to work with real estate agencies.
Before contacting one, or even during the process, however, manu prospective investors rack their brains wondering if they can trust the agent, and the agency.
An easily solved doubts, actually, seeing as Italian legislation establishes that all real estate agents and agencies are required to be licensed in order to operate as such. To gain their license agents must attend a course (where they learn civil law, tax rules, appraisal, banking and building techniques etc..) and then pass a state examination. Once they have passed the exam agents are required to submit a formal application for registration within a Public Register. Credited individual agents are registered in the REA (Repertorio Economico Amministrativo) while agencies are listed in the Registro delle Imprese, and both registers are lodged within the local Camera di Commercio, the Chamber of Commerce.
So, because all licensed and registered real estate agents have a legal certificate issued by the local Camera di Commercio, and a registration code assigned to them, one should definitely ascertain the existence of these. And rest assured that Italian law maintains that these operators only, i.e. formally certified and qualified professionals and agencies, are entitled to commissions.
The standing rules are in fact very strict: non-registered and license-less agents and agencies who operate, thus violating the law, are fined and/or may be jailed from 6 months to 3 years. Fines are very high and prosecution is unforgiving.
As concerns real estate sales commissions, called provvigioni in Italian, these are regulated by Article 1755 of the Italian Civil Code. The article reads: “The Agent has the right to demand a commission fee from each party, if the deal is concluded as a result of his intervention. The extent of the commission and the proportion in which this must be borne by each of the parties, in the absence of an agreement, professional rates or uses, are determined by the judge according to equity”. Foreigners are often surprised by this article, as it clearly states Italian law maintains that real estate agency fees are to be paid by both the buyer and the vendor.
Another singular factor that often calls foreigners’ attention is that real estate agency commission fees in Italy may be due before the final deed is signed and the ownership transfer finalized. Often, Italian real estate agency commission fees are due upon presentation of a first offer, or of a first draft of the preliminary contract.
However, what prospective buyer really want to know is what kind of real estate commission fee they should expect. A very sensible question, that, unfortunately, allows for no straightforward answer. Yes, because in Italy there is no set preestablished percentage applied on property purchase, and real estate agency fees are negotiable, variable and may, in some cases, be shared between the buyer and the vendor.
Agency commission fees’ negotiability is evidently a vital aspect. A prospective purchaser should be aware that the vendor is generally the most influential of the two parties, yet, vendor power aside, fees demanded are also bound to vary based on crucial aspects such as the property’s location, market price, and standing.
Seeing as commission fees are negotiable, vendor and buyer are asked to find an agreement on a commission acceptable to both. If both the parties boldly hold their ground, and do not come to an agreement, what generally happens is that commission is applied as provided for by the local Chamber of Commerce regulation. As an example, in case of non-agreement on applicable real estate commission fees for the sale of a property located occur in Florence, Tuscany, the agency in charge of the sale will suggest referring to commissions as specified in the Florence Chamber of Commerce Code of Common Use, as detailed here.
A final, but extremely relevant, aspect of the Italian property market that a foreign purchaser should be well aware of is that in Italy, real estate agents are by no means accountable, liable or culpable for what they sell. The agent’s job, and professional responsibility, ends as soon as the deal is closed, and commissions paid. Thenceforward, the agent has no pending obligation on the real estate asset purchased or its conditions.
Having an honest, dependable, savvy and proficient real estate agent is a momentous factor in finding, and successfully purchasing, real estate in Italy. This is especially true for a prospective foreign buyer, but, because most agents do not operate throughout the whole country, sourcing the right person, or agency, may prove to be a daunting and exhausting chore. Also, language and local customs often turn out to be crucial, and many a time, due to the language barrier and cultural differences, foreign non-resident buyers incur in “lost in translation” incidents when negotiating commission fees…
Language, local customs and shared behavior patterns, as well as extensive knowledge of the market and its many ever-varying perks and legislation are key when purchasing real estate in Italy. How can a foreign non-resident buyer get through the labyrinth of current Italian legislation undaunted, and be sure to make a good deal? By having a trustworthy and conscientious expert consultant on site.
Being able to count on experienced professional assistance, in fact, allows a prospective foreign purchaser to gain truthful unequivocal insight on the whole process, and enjoy a seamless, successful and effectual buying experience throughout.
Comprising a crew of committed fluently English-speaking professionals, among which lawyers specialized in real estate law and negotiations, accountants with comprehensive knowledge about fiscal law, our team offers extensive expertise in all that concerns property purchase, and an extensive database of honorable and trusted real estate agencies.
Providing thorough and detailed research on real estate agencies in all areas of the country, an insider’s view of proceedings and unbiased information, we negotiate fees in our foreign clients’ interest and efficaciously assist during all phases of property purchase in Italy.