Let’s Play Hide and Go Seek, Italian Style

It’s not as easy to identify potential houses in Italy as it is here in the US. We have a “multiple listing service” or MLS, where essentially all properties for sale are in one big database. It doesn’t matter who the selling agent is. If it’s on the market, it in the MLS. And from that, on Zillow, Trulia, realtor.com, etc.

This makes it easy for a buyer. You just access this data and see what you can find. It’s all there. You can also see what has sold for what price. All this leads to a pretty efficient market, in economics-speak.

Needles in Haystacks?

Not so in Italy. There is no equivalent system. It does matter who the selling agent(s) are, because it only shows up on their websites(s). And you have no history or way to compare prices.

imageNote that I’m saying it might be agents, plural, not just agent, singular. The same property can be listed by multiple agents. It all depends on the seller, and it’s generally in the seller’s interest to have multiple agents on the job. (Twice, on my original trip, I was taken to see a house that, when arriving, I realized I’d seen with another agent. The descriptions and pictures were different, so I thought it was just two houses in the same general area.)

So to identify properties you need to identify agents. As you expect, you do this by web search. You can search for “Marche real estate”, for example. You’ll find a number of agents and you’ll discover the portals, Gateaway.com and Rightmove.com. (These sites take what I believe are paid listing from agents and kind of simulate an MLS system. But not very well.) From the properties listed, you identify agents. Then you go to the individual websites and see what they have for sale.

There is another way to find a house, but it’s not easy. You try to identify a house on your own, offered by a private seller without an agent. If you have good connections in the expat community, you might find a house another expat wants to sell. Or, if you’re fluent in Italian and lucky, you might hear about a house by asking around in local villages.

It’s Gonna Cost Ya

The total real estate commission on a sale is similar to the US, usually somewhere in the range of 4%-6%. But, instead of all being paid by the seller, as is our practice, it’s split by the buyer and seller, with what you pay based on the rate charged by your agent. In our case, our agent Kevin charges buyers 4%, with a minimum commission of €7500. (Also, on the commission you pay the IVA value-added tax of 22%.)

I’ll admit to not being fully aware that Kevin’s rate was above average when we started working with him last year, so we didn’t try to negotiate the rate. Maybe he wouldn’t have negotiated, anyway, since we would have been in a weak position: say “no” to his rate and then we’d not have access to his listings or have to work hard to identify another agent who had the properties. And of our list of 39 properties last year, Kevin represented more than any other agent, about 8 if I recall correctly. So, we might have missed out on some good choices.

What Will It Take To Put You In This House Today?

Finally, when evaluating prices and what you “should” pay, you’re in the dark without knowing what similar properties have sold for. Your data is just the houses you’ve seen and the asking prices. And asking prices seem to be all over the map. It’s not uncommon for a house to be reduced dramatically in price, by fifty, a hundred, two hundred thousand euro all at once. Is it now a good deal? Or if they were off on the price by that much before? Are they still too high?

(When I was getting a feel for the market at various price points last year, I saw a house in Tuscany listed at €750,000. I liked it, but told the agent it was at least €200,000 too high for us. She then asked, “If I can get them to sell it at €550,000, will you buy it?” I think she thought that it was a real possibility that they would take that price.)

So, with “hidden” inventory, buyer commissions, and “shot in the dark” prices, you could say the Italian free-for-all system makes it harder on a buyer all around.

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