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Old 06.02.2021, 19:49
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Italian real estate foreclosures

I know this is Swiss forum but I hope there are Italians here who could shed some light into the "shadow side" of Italian foreclosures system.

The background: While looking for the land to build my house I have been told by some locals that I should look for a Foreclosure sale if I want to make a good deal. There is a centralized page for this (https://www.astegiudiziarie.it/Riepiloghi), everything is in Italian and horribly messy, there is insufficient documentation, often it is impossible to see the properties etc. but one can eventually find the way around it.

So far so good.

What people did not tell me was that -at least in the south- there seems to be "unwritten law" that goes something like that: "Thou shall not bid for residential properties and especially not for those that are occupied".

How do I know that? Well, I was asked not to bid, had my tires slashed, heard vague threats in the way of "lot of hunting accidents here, especially with foreign people" during visits to such properties. And I never ever acted cocky or aggressive, in fact I always agreed not to participate in bidding when asked. Still there was quite a lot of hostility.

What I do know is that in Italy when someone falls under foreclosure he/she cannot be evicted from the home until the property was purchased. The person can also deny access into the house. Potential buyers are limited to view outside and some -often miserable- papers.

As a result the houses are left on the market for a long time and price is gradually reduced to as much as 1/5 of original estimate. Here is one example: https://www.astegiudiziarie.it/vendi...az-118-1820080, look at the price development chart at the right side. It is not as extreme as 1/5 but I have seen properties that stuck on the market for years and had much larger price drops.

My theory is that while no one dares to purchase those homes price goes down and eventually someone (possibly family or friends of that person) buy it out when price has dropped enough. As a result the bank is left sitting on a debt that it cannot collect (owner is bankrupt and house was sold for a fraction of the price) while house stays within the family.

Does anyone from Italy has insights into that?

Cheers


P.s. this also explains why Italian banks seem to be more careful about Mortgage then Swiss.
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Old 06.02.2021, 19:59
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Re: Italian real estate foreclosures

Sounds about right.

Tom
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Old 06.02.2021, 20:24
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Re: Italian real estate foreclosures

Why not move here?
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Old 06.02.2021, 21:54
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Re: Italian real estate foreclosures

This doesn't come new to me.
It's not really a strategy to have someone in the family buy.

I think it really depends case by case

Sometimes you will have these behaviors from people that are quite poor and in the family you have really some hot head who can do crazy thing as to defend the 'pride' of the family

Sometimes this people know really some hot head even if it's not family

Sometimes it can be a bluff

In the past I thought to buy something like that but the risk to deal with crazyness is a no go, especially when you to towards south/islands
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Old 07.02.2021, 10:36
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Re: Italian real estate foreclosures

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I know this is Swiss forum but I hope there are Italians here who could shed some light into the "shadow side" of Italian foreclosures system.
Not directly answering your question but as an alternative, which I would personally follow, is to forget about foreclosures and try to make a good deal through a "normal" purchase.
Prices have been dropping anyhow in the past few years and I would avoid the assl of the foreclosure system.
For instance on one of the main real estate sites (immobiliare.it) you can easily filter lands ("Terreni"), filter out out auctions ("Escludi aste") and get anyhow a wide selection of results (90% seem to be sold throught agencies).
You can even draw the area you prefer on the map.
As an example of lands in south sardinia: https://www.immobiliare.it/vendita-t...vanza&noAste=1

Source: going through the same process for a house purchase close to the sea in a different region, while being resident in CH (but IT citzen)

Please also note: going through agencies doesnt mean of course you can't negotiate the price originally requested. I would say that offering -15/20% could in some cases be accepted by the counterpart given the period, and in most cases you will have a second possibility if your offer gets refused the first time (the agency is there to mediate).

Cheers

Last edited by zeteo; 07.02.2021 at 10:48.
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Old 07.02.2021, 11:07
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Re: Italian real estate foreclosures

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Not directly answering your question but as an alternative, which I would personally follow, is to forget about foreclosures and try to make a good deal through a "normal" purchase.
I think the problem is the OP needs financing and he can't serm to get this for a property in Italy. There is yet another thread the OP started on this topic.
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Old 07.02.2021, 11:30
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Re: Italian real estate foreclosures

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I think the problem is the OP needs financing and he can't serm to get this for a property in Italy. There is yet another thread the OP started on this topic.
Thanks, I wrote my 2cents in that thread as well
Getting financing would be anyhow easier when going throught direct sale, as opposed to foreclosures (which have long times and variables to consider).
Law also allows to add a note ("Clausola per mutuo") to the purchasing offer ("Proposta d'Acquisto"), meaning that the offer it will be valid ONLY IF the mortgage will be approved by the bank. Something I am not sure can be made thought the foreclosures.

Hope it can help somehow
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Old 07.02.2021, 13:30
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Re: Italian real estate foreclosures

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My theory is that while no one dares to purchase those homes price goes down and eventually someone (possibly family or friends of that person) buy it out when price has dropped enough. As a result the bank is left sitting on a debt that it cannot collect (owner is bankrupt and house was sold for a fraction of the price) while house stays within the family.
Family are not allowed to buy it if it's in foreclosure.

Tom
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Old 07.02.2021, 18:38
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Re: Italian real estate foreclosures

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Family are not allowed to buy it if it's in foreclosure.

Tom
Interesting, thanks.

One has to wonder what happens to those homes at last, who buys them / why do the go off the market.... Maybe if person can come up with missing payments banks reinstate mortgages or there are perhaps some hardcore (local) dealers that are not scared into buying such homes at fraction of the price.

In one accident I came to the village and locals where very alarmed when they saw me (apparently I was the only person who shown interest), the house owner eventually invited me into the home, offered me coffee and asked not to bid because "I will be bidding against him". I promised him not to, the property went off the market immediately after being there for over 2 years. Maybe it was a coincidence, maybe I spooked them and they finally did something.

@everyone, thank you for advises. My inability to get a Mortgage in Italy greatly limits my choices but I am not completely without capital and if I find something and buy it with my cash I will be free of the mortgage burden which is a huge bonus.
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Old 07.02.2021, 19:06
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Re: Italian real estate foreclosures

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Exactly.

OP, since your experience has already proved that the foreclosure route can be unpleasant or dangerous for you... why would you even entertain the notion any further? Why try to buy into [and possibly want to risk living in] a situation about which you know, from the start, that it is not going to be happy or healthy for you?

I tried this in one region of Italy: Sardinia. Local people there hate it when you call them Italians and say that "island has it's own rules". Hence my question, perhaps customs where different in other regions. But judging by replies I see that this is general rule.
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Old 07.02.2021, 19:14
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Re: Italian real estate foreclosures

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Not directly answering your question but as an alternative, which I would personally follow, is to forget about foreclosures and try to make a good deal through a "normal" purchase.
Prices have been dropping anyhow in the past few years and I would avoid the assl of the foreclosure system.
For instance on one of the main real estate sites (immobiliare.it) you can easily filter lands ("Terreni"), filter out out auctions ("Escludi aste") and get anyhow a wide selection of results (90% seem to be sold throught agencies).
You can even draw the area you prefer on the map.
As an example of lands in south sardinia: https://www.immobiliare.it/vendita-t...vanza&noAste=1

Source: going through the same process for a house purchase close to the sea in a different region, while being resident in CH (but IT citzen)

Please also note: going through agencies doesnt mean of course you can't negotiate the price originally requested. I would say that offering -15/20% could in some cases be accepted by the counterpart given the period, and in most cases you will have a second possibility if your offer gets refused the first time (the agency is there to mediate).

Cheers

Thanks, this is a valuable site. I generally do not like agencies and use Subito.it to explicitly search for private announcements.


And you brought up another factor here with citizenship: AFAIK Swiss Citizens cannot buy properties (land area) larger then 2000m2 in Italy, this is a payback for Lex Koller. This can be easily fixed by opening a small firm in Italy and buying property on it's name but in this case one can drop any hope of mortgage. Even Italian mortgage brokers told me that there is absolutely no way to get mortgage in such case. Same applies for holders of other passports, I have two citizenships and my second one places no limits on plot size but my main residence is in Switzerland and brokers told me that this passport has to be used for purchase if I am also looking for a financing.


P.s. it seems as we are looking at the same island )), this is out of scope of this thread but did you note how dirty / polluted the Sardinia is? It is so sad. Here is for example a good document from 2006, it is -sadly- still largely valid http://www.epidemiologiaeprevenzione...EP_V30I1S1.pdf
There are just a few places on the island which are more or less clean.

Last edited by Son of Mom; 07.02.2021 at 19:44.
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Old 07.02.2021, 20:09
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Re: Italian real estate foreclosures

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Thanks, this is a valuable site. I generally do not like agencies and use Subito.it to explicitly search for private announcements.
Agree. Your knowledge seems to be much much greater than mine on the topic so I dont have many elements/advice to add except:

-please consider other sources in addition to Subito for private announcements (eg immobiliare, or idealista.it which also has some search by keyword functionalities). This is because subito is not focused on real estate and lately prone to little scams AND because immobiliare/idealista also include private announcements (eg. those without any agency logo).

-I have read somewhere that Lex Koller is somehow mutual for CH citizens purchasing in IT. so not sure about the 2000m2 limit (it might be lower) but I agree that an Italian firma would solve the problem.

-since a few years there are some nice tax-wise advantages for foreigners (and also Italian expats) getting residency in IT: if interested, please look for "Regime fiscale lavoratori impatriati" or its newest variations. If the investment you are planning is worth it, you might want to consider to get a temporary residency in IT (eg. rent) to get time to know the area, being considered resident (it would help with the bank), and through some well-know fintech save that terrible 3% currency fee conversion between CHF and EUR which i personally hate and would probably not possible to escape through a multi-currency financing

At last, Sardinia is super nice but not the region I am heading to
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