The Transaction

ameglia_castle_with_apuan_alps
Apuan Alps

We have decided the home in Cortila is the one we want and now we need to figure out how to get it.  We inform Paola, our real estate agent, of our decision and she asks what amount we wish to offer.  The list price is of our chosen home is $160,000 Euros and our suggested limit was $120,000 so we need to successfully negotiate the price to make this feasible.  Paola informs us the price is negotiable but within reason given the amount Elizabeth has invested in refitting the home with new windows, doors and interior updates.  We decide to offer $120K, Elizabeth counters our offer at $140K and we quickly settle on $133,000 Euros…there goes the budget.  As far as negotiations go I would say this was quick and painless as Elizabeth was motivated to sell and we were in love with the house.  As someone with Business Development in my job title for the past 10 years I was ready for a tough negotiation but this was a case of the heart being stronger than the mind.   We knew we wanted the house and were not going to lose it over $3K Euros.

contratto-preliminare
Compromesso

Paola writes up the compromesso, a preliminary contract that outlines the basic details: agreed upon price, seller, buyers, property location, and proposed closing period.  So far this is nothing but a handshake and I need to send a deposit to secure the deal.  Paola explains I have 2 options: wire a 10% deposit but this allows Elizabeth to continue accepting other offers and if I back out of the deal I will forfeit the deposit.  However, if I send 20% then Elizabeth cannot continue to shop the property with others and if she backs out then Elizabeth owes us double the 20% deposit.  We opt for the 20% route and arrange to wire $26,600 Euros into an escrow account and this is the first moment fear creeps into my mind, “is this legit?”  If not for Paola the fear might have been much greater but I completely trust her and we move forward.  Wells Fargo sends the money, Paola Fedex’s the compromesso to Elizabeth and then to Aleth and I for original signatures to complete the preliminary contract.

Now the wheels are in motion.  We order a home inspection ($300 EU) and everything comes back with positive results.  Another step forward.  Paola has secured a notaio, somewhat like our version of a notary mixed with a lawyer.  In Italy the notaio is a government official who collects documentation on the history of the property, conducts the deed research and legally conveys ownership from one party to another.  Paola informs me this process can take 6-8 weeks during which time we are trying to identify a specific date everyone can be in Italy to sign all the paperwork.  So now we are buying airline tickets with the hope that the deed research comes back complete and clean.  From afar it sounds like the deed work is antiquated as the notaio’s staff is physically visiting land registry offices, government agencies and even utility companies. So far, everything is moving along quickly as Elizabeth kept great records and has many of the necessary documents.

In preparation for the the big transaction day, Paola informs us we need an Italian bank account and to open an account we need a Codice Fiscale.  The Codice Fiscale is the equivalent to your social security number in the US.  Paola was beyond helpful during this part of the process as she emailed us the necessary documents, we signed them, scanned copies of our passports and she went to the tax office to register our documents.

 

A week later we have our Codice Fiscale numbers and our Italian bank account.   Ready to complicate things?  Our banker’s name is also Paola.  We decide to include her last name so we can distinguish between the two when referring to Paola so from now on the banker is called Paola Rosa. Everything is working out perfectly and we are scheduled to fly to Milan (MXP) on September 11 to complete the transaction on September 15th.

As we head towards the closing there are a few details to iron out.  How do we handle the contents of the house?  We are not interested in keeping the furniture so we ask that the home be delivered empty.  Careful when you use the word “empty” because in Europe the seller will often remove the entire kitchen (appliances, cabinets, sink, plumbing, etc…) upon their departure.  I find this strange as kitchens are not a one size fits all proposition that can be easily repurposed elsewhere but it is something to ask about and possibly negotiate in your deal.  We agreed the kitchen would remain but all the other belongings would be removed.

September 11th is quickly approaching and we need to get the remainder of the funds into our Italian bank account as we need to pay for the house with an Italian cashiers check.  We have decided to pay off the house at the closing and not go the loan route.  Paola informed us if we wanted to take a loan we could not use an American bank and Italian bank loans are not easy to acquire so we take the path of least resistance and agree to pay the house off.  Everyone recommended Currencies Direct and now I can as well.  They provided a competitive exchange rate, their fee was minimal and the cash quickly moved from the US to Italy via Ibiza (not sure why) in 24 hours.  I cannot express the level of relief when Paola Rosa emailed us indicating the funds had arrived in our Italian bank account.

It is Aleth’s first time to Italy and we complete the same trip (SFO-JFK-MXP) as mentioned in my previous entry, Business Class, except this time we are in economy which is also a very pleasant experience on Emirates.  From Milan we drive down to Golfo dei Poeti and in the morning Aleth gets to meet Paola and see the house for the first time in person (gulp).  Thank God she loves the house and tomorrow is closing.

It is closing day, September 15th, 2015 and we meet at Paola’s office.  Present are: Paola, Elizabeth, and two “witnesses.”  Who are the witnesses and what are they witnessing?  Without knowing, we all make the 45 minute drive to the notaio’s office in Massa Carrara, lots of handshakes upon arrival and we are now all waiting around a huge table in what appears to be a corporate boardroom.  We have the notaio, Paola, me, Aleth, Elizabeth, our 2 witnesses and 3 assistants to the notaio…we have a full house.

We have no idea what to expect but for the next 4 hours we are in this room and the 24-page agreement is read in its entirety in Italian.  Along the way they are editing the document on a laptop.  We take a break and now the document is read word by word in English and suddenly we understand the role of the witnesses.  Their job is to compare and contrast that everything that was read in Italian is the same exact document that we heard in English.  Lots of signing papers and only in your best penmanship.   We hand the check to Elizabeth and she hands us the keys and with that it is official.img_0064  We are beyond excited and the proud parents of a place in Tuscany.  Sadly we did not plan our dates very well and we are departing from Milan in the morning and now we must drive to the hotel next to the airport.  We don’t get to spend one night in our new house.  We have an empty house in Italy and over the next 4 months we will try to fill it with the basics.  So we’ll save that for the next entry.  For now, here is a helpful chart regarding the fees associated with purchasing a home in Italy.

chart

I had to go back and look at the various amounts we paid for our house.  The seller was paid $133,000 Euros, $8,000 for the registration tax and the notary’s services, finally $6,490 for value added tax (VAT) and Paola’s fee.  I guess that puts us in just under $150K and when I consider that likely isn’t enough for a down payment in San Francisco it feels like a bargain for a home in Tuscany.  With keys in hand we board the flight back to San Francisco dreaming about all the ways we want to improve the house.  The adventure is in full swing now.  Ciao!

Below are the BEFORE photos!  Next we’ll get into how we manage this from afar, furniture shopping, kitchen remodeling and more…

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10 thoughts on “The Transaction

  1. Brendan, love the story of your Italian adventure. The house is beautiful and I hope you and Aleth enjoy all that comes with this journey. Thanks for sharing and educating.
    Cara

    Liked by 1 person

  2. Fascinating. A wild and exciting undertaking. Congratulations to you both for making it all happen. I can imagine wonderful Italian adventures in your future.
    Thanks for sharing the backstory.

    Liked by 1 person

  3. Thank you so much for telling your story. I have been traveling to and in love with Italy for some time now, and always wondering if it would be possible to buy a house/retire there. You have really laid out the steps for me… that helps so much. Am I correct in assuming that you hadn’t been to Italy before you decided to do this? Wow! If you have the time or interest, language immersion schools can really help with your Italian….. In bocca al lupo (good luck) with your new home. May you have may happy years there!

    Liked by 1 person

    1. Emolly,

      Sorry for the delayed reply, I was not notified of your comment. I had traveled throughout most of Italy over a month long trip about 15 years prior to this purchase. So I had some idea of where I wanted land but I was open to the suggestions of my real estate agent. So far, so good!

      Like

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