What To Ask Before Buying in Italy

Luca: Happy Saturday. Last week, Justin Mavity took us through mortgages and mistakes, and this week we are sharing with you the second part of the podcast where it gets a little bit more personal. We all share how we feel about buying property in Italy and also why Italian sellers think sometimes that foreign buyers are worth taking advantage of.

And we also talk about where we put our money next. So a lot of things to cover. Um, hope you enjoy it. Happy listening

What do Italian sellers and agents find frustrating about foreign buyers? If anything.

Justin: That’s a really loaded question because the Italian seller thinks the foreign buyer is gonna come with a bag of cash and…

Gill: I was gonna say rich.

Justin: Yeah, and just dump whatever they… you know, “You want 400,000? Here it is.”

Luca: [00:01:00] That’s your, that’s your impression in general?

Justin: Yeah.

Luca: That Italians think that foreigners are poor negotiators?

Justin: Yeah, poor negotiators and in Italy, they’re gonna pay whatever. So that’s the first thing. Italian agents, with foreigners… I feel like Italian agents get frustrated when foreigners start asking questions. Because again, it seems to them a bit improprietous, a bit rude in a way, that you maybe as a foreigner start asking questions that maybe kind of impugn them in their professionality. I’ve noticed this with my own clients because some of us speak a bit of Italian, and they will ask a question, a technical question about the property to the agent at the visit, and you’ll see the agent go…

Luca: Rolling their eyes.

Justin: Exactly. But it’s the right thing to do.

Luca: It’s their job.

Justin: Exactly, but they don’t all do it, right? So…

Luca: If there’s a warning sign, that is that one.

Justin: Yeah, exactly. This is when we were preparing, I wrote down a list. Again, if they can’t answer questions or they get annoyed about questions about the building permits, the property, in and of itself, walk [00:02:00] away.

Gill: So the eye-rolling is the red flag.

Justin: Yeah, exactly. Anytime they start doing that, it’s just, oh gosh, okay, we have a big problem.

Luca: Walk away.

Justin: Walk away.

Luca: But you were touching on something interesting just now: Italians, you feel think that foreigners are walking bags of cash ripe for the taking Well, we

Gill: saw that in Malta How- We saw that people expect to get a higher price for

Luca: a property because they know- Oh, yeah, we’ve been on the receiving end of it

Gill: right? So yeah. Absolutely.

Justin: Absolutely. You guys know this. Yeah.

Luca: We’ve been foreigners. I mean, we are for- we’ve been foreigners in many countries. Exactly. So we know this. In some this thing is more, you know, acute than others.

Gill: It’s more legit, yeah. It’s more legit to screw the foreigners in some countries than in others.

Luca: Yeah, I would say so. But anyway, I would say I agree to a certain point in what you’re saying, but I can see absolutely how that may be the case.

Justin: Yeah.

Luca: But the question is, how do you protect yourself from it?

Justin: I mean, I’m gonna advertise myself here. I’m gonna say you need to hire somebody-

Luca: Call Justin!

Justin: You’re gonna… You need to hire somebody like me or one of my colleagues to go with you and protect you. That’s part of what we do, is prevent you from being taken advantage of with foreigner overcharging. And we also interface with the agent in a way that’s not going [00:03:00] to annoy them, frustrate them.

And also protect you in that way to say if the person is a scammer, if they’re not legit, if they’ve done no due diligence on the property. I mean, I think we talked about one of my clients I’m still working with right now. We found a property that had the illegal septic tank on the neighbor’s property. They had all of these… and that agent just called me back this week, by the way, and said, “Do, would your client still be interested? They’re willing to fix everything.” And I said: “Is the septics tank still on the neighbor’s pr-” Still on the other, yeah. “Yeah, yeah, but that’s okay.” “It’s been more than 20 years.”

Well, that’s not how that works. Sure. That’s not how that works. Well, they declared that everything’s okay with an autodichiarazione, a self-declaration. Yeah. Which is not how that works, so-

Luca: AKA toilet paper.

Justin: Exactly, which is garbage. So, you know, you need to have somebody on your side who’s, who knows what they’re doing and can protect you in this.

Gill: Because it can save you an awful lot of money.

Justin: Oh my gosh.

Gill: And an awful lot of heartache.

Justin: Oh my gosh. I would’ve felt so bad for those clients if they had gone and bought that on their own, and then the first thing they had to do was rip out that old septic tank on the neighbor’s property, apply for new septic tank permission from the municipality.

Luca: Potentially getting sued.

Justin: [00:04:00] Exactly. They should be getting sued.

Luca: I imagine maybe the neighbor doesn’t even know this.

Justin: Yeah, who knows? Because again, the owners told me: “Oh, the neighbors never come. They haven’t come for 20 years.” You know…

Gill: That still doesn’t make it all right.

Justin: No, but in Italy, you know. It’s fine. It’s fine. It’s fine. Fine. They’ve never said anything, so it must be okay.

Luca: In which region is this property?

Justin: In Lunigiana.

Luca: I sense that Lunigiana way.

Justin: But again, this is gonna happen in those areas when we talked in the last episode about, you know, potential areas where there hasn’t been a lot of movement in the market, you’re gonna find it more Because again, these properties haven’t been sold in many, many years.

And so they’re really being re-transacted for the first time in 30, 40, 50, 60 years. You’re gonna find major problems like this, which is gonna be different than if you’re buying property in an area that’s been a bit more active. Yeah, and things have been updated because they have to be right when they’re transacted. So that’s somewhat to be expected.

Luca: I wanted to go back onto the self-protection thing. This thing about putting someone, interposing [00:05:00] an expert, between you and the object of your property love is actually very healthy. And we saw this very, very recently with a friend of ours who was buying in the Dolomites. And we had a chat with her at the beginning, and I could tell she was very, very resistant to doing any form of due diligence, because no one wants to go to the doctor.

Justin: Yeah, exactly. That’s the same thing.

Luca: No one wants to be told, you know, if you don’t go to the doctor, you’re not told things about-

Gill: But also the fees she was quoted. So if she had an agent that was good, they would be able to tell her that it’s ridiculous to be charged 20,000 for drawings.

Luca: 20,000 for due diligence.

Justin: No, no, no, for the DOCFA to do, to do the updated planimetria? That’s insane.

Luca: Not even that. For an inspection and the preliminary drawings.

Gill: Preliminary drawings.

Justin: No, no, no, no

Luca: no. Preliminary draw- We saw- That’s

Gill: insane …

Luca: And we were shocked.

Gill: She was like, “He’s very nice.” I’m like, “I’m sure he is.”

Justin: I’m sure he is. Yeah.

Luca: He’s like rubbing his hands all the way to the bank.

Justin: Exactly, exactly, with a smile on his face.

Luca: Well, it took us five minutes. We actually introduced her to a friend of ours, the architect we used the [00:06:00] most. And he gave her a quote for like a 20th of the price to do this. But of course, as we were discussing before, some people, unless you are guided, will think you are, that you are a walking bag of cash. And that’s not even a regional thing. Yes. It’s a thing that some people are honest, reputable, and they care about their long-term reputation, and some people are, you know… grab the cash and run away.

Justin: No, they see you as an ATM, right?

Luca: And who’s gonna see this person again?

Gill: They can exploit your ignorance, right?

Justin: Exactly. That’s, that’s what it is. You have to protect yourself here. And again, I love Italy, I love Italians. I’m married to an Italian, so don’t get me wrong, I think Italians are wonderful people, but there is a segment of the population here that acts like that. Like everywhere.

Luca: Like everywhere. 100%.

Justin: Yeah.

Luca: So if you fall in love with your property, if you fall in love with a person, ask a second opinion. Ask a second opinion. If you fall in love with a car..

Justin: But I don’t think there’s a figure that you can hire specifically for that to do diligence… [00:07:00]

Luca: Yet+ another career opportunity for you in Italy. Um, we talked about a few areas in Italy before that you found attractive, interesting, etcetera. Now, today you’re talking a lot about Lunigiana, but it’s already on our radar, meaning that-

Justin: Yeah …

Luca: We’ve been looking at the expat figures there, and it’s actually going kaboom, and-

Justin: Yeah, it’s, it’s, it’s …

Luca: Potentially overexploited in a very short period of time.

Justin: Look, I just was there with clients. So I sold a few years ago a property, 160 square meter property in a little tiny village in Lunigiana for 35,000 euros. This was completely livable. Running water, electricity, everything functioned. It was dated but functioned. I mean, you know… if you’re using it as a summer house who cares? In the village above that, last week with new clients, I saw above, again, so it’s up higher in the mountains, less accessible, a property in an even smaller village Yeah Even less accessible, [00:08:00] 165,000.

Luca: That’s nuts.

Justin: That’s nuts. So these places, yeah, are seeing major growth…

Gill: And people are cashing in on that

Justin: And people are cashing in on that. Well, I’d be doing the same thing.

Gill: Yeah.

Justin: Be doing the exact same thing.

Luca: Totally. And they’re not out of this world prices, so for people to think Tuscany and the Lunigiana is a weird Tuscany.

Justin: Yeah, and it’s not the, it’s not the Siena Tuscany.

Luca: exactly. If see, people saw a picture, they would think, in some places it would look like, it looks like the tropical jungle.

Justin: Yes, yeah.

Luca: They completely overgrown.

Justin: Yeah, yeah.

Luca: I mean, parts of, mix of Alps and Vietnam if you- It’s true … it’s such a, such a diverse that they- It’s true. So you don’t get the rolling hills but then, you know, there’s Tuscany. Yeah. And there’s that cache, et cetera. And it is of course pretty cool, so people are also drawn to the fact that they’re not gonna bake in the summer.

Justin: Yeah.

Luca: But if you think about it, for many international buyers, what you just described is, well, a thousand euros a meter, so like that’s still a deal. Completely, completely accessible.

Justin: It’s not that 35,000 euros that my clients paid a few years ago. I mean, that’s gone, but it’s still accessible. It’s [00:09:00] still accessible market.

Luca: But if you were looking for that..

Justin:  35,000 euros? Ciao!

Luca: There are places like that.

Justin: Yeah, there, there sure are.

Luca: There are places like that. Yeah. Even nice places.

Justin: Yeah.

Luca: But okay, forget about the 35,000, but if you were looking for somewhere that in your opinion has legs

Gill: The next hot spot

Justin: Yeah. I was with clients up, near Asti a while ago.

Luca: Piemonte!

Justin: In Piemonte. In that northern Piemonte region, also Biella. I think Biella is gorgeous as a little city in Italy. I mean, you have some ruins of industry around, but that’s gonna… If that market picks up, those are gonna be all converted into condos anyhow. You know, it’s gonna be stunning. I think that northern Piemonte Biella area is another really underrated place for people to buy.

Luca: It didn’t used to be. In fact, you can find a lot of turn-of-the-century villas…

Justin: That are stunning!

Luca: Yeah, yeah they literally smell of old money.

Justin: Yeah, yeah.

Luca: And they sell them for nothing. Biella had some [00:10:00] incredible both economic and demographic headwinds. So there’s a reason behind everything.

Justin: Yeah.

Luca: But very often people say why should I buy that if it’s… Surely there’s a reason, I wouldn’t buy that because there’s a reason.

Justin: Mm.

Luca: But things hit a trough at some point. They hit a bottom.

Justin: Exactly.

Luca: And, we made a video a month ago. We went up in the Alps.

Justin: Oh.

Luca: It’s like a 45-minute trip.

Gill: I think Recoaro also falls into that. The property prices just can’t get any lower. And it’s beautiful.

Luca: It’s beautiful.

Justin: And it’s stunning.

Luca: Everyone was asking us, because they couldn’t be bothered to read the caption. “Who owns this?” Or or even my favorite: “Why are you not telling us where this is?”

Justin: And it’s like literally right underneath.

Luca: Like, read the caption! Read the caption. Expand the caption. Read the description. Anyway, people fell in love with this place, and that is just obvious. You see all the architecture. They’re like, “This is stunning.” And it is true. People used to pay money, hand over fist to live there.

Justin: Big money. Big money

Luca: And now they’re like, “Why are prices now so…” Because things sometimes they hit a cycle. Yes. There is that too.

Justin: Yeah. Well, when… Also, if it’s an industry [00:11:00] leaving cycle, like we’re talking about Biella. You know, all the wool production left that area, right? Absolutely. All the wool yarn production left. Everything collapsed. You know, the rich people moved out of there. But it can be any number of reasons. It’s not a popular tourist spot anymore. No one goes there anymore, so…

Luca: That doesn’t mean the fundamentals are not there.

Justin: No, that means everything is there, and it’s a good time to buy! Because that’s going to see a resurgence. Especially if you find an area, as we were talking about, that has beautiful properties, good architecture, good scenery around it, amenities.

Gill: Yeah, views.

Justin: It’s going to grow back real quick. I mean, that’s what happened with Tuscany 30, 40 years ago, right? The same thing happened. People would have never thought some of these areas would have come back to life and been vibrant

Luca: No. In fact, the Lunigiana was, I would say, pretty unpopular as recently as seven or eight years ago.

Justin: Oh, yeah. Oh, yeah. Completely different now.

Luca: The amazing thing is that momentum changes things both ways. Yes. So there’s a perversity to the fact that there is a client out there, a lot of clients will be happier to [00:12:00] pay 160,000 than 35, because they see the higher price as the proof that things are going the right way.

Justin: Correct.

Luca: But someone was there two years ago. I mean, how much regret do we have…

Gill: For not buying in Valletta.

Luca: Yes, changing countries. Not buying in Valletta. And this tells you that you should listen to people’s advice, but to some degree. Valletta was possibly the most underpriced capital in Europe.

Gill: And it’s beautiful!

Justin: Just abandoned houses everywhere.

Luca: Abandoned houses everywhere. Palazzos. And people, I’d be like: “This place is amazing. How come you can buy a palazzo for 100,000 euro?” And remember, this is Malta, so space is at a premium. 100,000 in Malta is nothing. And people would be like, “Yeah, no one wants to live in Valletta. There’s nothing to do in the evening.” Then five years later, it’s full of cafes

Justin: Yeah. It’s like bars…

Luca: Yeah, 100,000 euro buys you a garage. And the palazzo is now 3 million euro. And I often bite my knuckles [00:13:00] thinking, why did I listen to other people’s advice? You have to look at the fundamentals. Yes. Architecture is worth something. The area is worth something. You have to do your own research.

Justin: Yes, absolutely. Absolutely.

Luca: So, yeah, well, you actually didn’t answer the question. So Lunigiana? Because he doesn’t wanna tell us!

Justin: No, I said I think the Lunigiana is definitely one of the regions.

Luca: The area around Asti.

Justin: In the area around Asti, Biella. I think Biella’s gonna be a bit, one of the next big cities, let’s call it, for investment by foreigners. I think it’s just stunning. It’s not the most accessible city. I think it’s really hard to get to on the train. There’s no high-speed train that gets you there. Even by car, it’s a little bit challenging. But it’s really stunning. It’s set right at the foothills of the Alps. The city kinda goes up like this, and it’s Liberty style palazzi in the center is really I think it’s gonna be a new spot.

Luca: Yeah. If they manage to get a critical mass of expats there

Justin: Just what happened in Lucca.

Luca: It would, it would happen. Yes. Yes.

Justin: It’s what happened in Lucca.

Luca: So we need to make it a mission of ourselves to highlight other parts of [00:14:00] Italy for people to restore a little bit and not always going to the same places.

Justin: I think where we went, by the way, we talked last episode, we spent several weeks in Sardinia last summer. We went to my partner’s father’s village, Ozieri. And I think that is stunning. It is stunning.

Luca: Where about is it in Sardinia?

Justin: It’s in the central north. So in the center is not obviously the best place to be in Sardinia, but in the center north, you’re connected enough where you can be in Olbia in under an hour, you can be to Sassari in an hour. I mean, so you’re connected enough where you could live there really pretty well, and there are shops and there are restaurants and things. It’s gorgeous, and you can buy it for very, very cheap at the moment. But it’s not on the coast.

Anna: Ah, okay. That’s what I wanted to ask. How far away is it from the coast?

Justin: So about 45 minutes if you wanna get to Olbia. An hour if you wanna get to the other coast, if you wanna get to Sassari. Alghero is close also, so…

Luca: And what does the place itself feel like?

Justin: It feels like you’re in Game of Thrones.

Luca: The good or the [00:15:00] bad bit? I mean, Flea Bottom or Highgarden?

Justin: No, no, no, no. We’re looking at Highgarden, so we’re looking at a nice-

Luca: Okay, okay…

Justin: stone village, sandstone village, so it’s got that white village look, on a hillside, so it’s a hill village also, going up the hill. It’s really incredible.

Luca: Uh-huh.

Justin: That would be a nice place.

Luca: And life, drinking, eating?

Justin: Yeah, there, there’s some work to be done there, but again, if somebody wanted to come and say, “We’re gonna move here, and I wanna start a nice restaurant” you could probably do that and get it on its legs.

Luca: Sure, if you could get a visa.

Justin: Exactly.

Luca: But that’s a whole other problem.

Justin: Exactly. That’s a whole other problem, right? But if you could work through the paperwork and get that to happen, or get an Italian business partner you could make something like that happen, and it would easily become a decent place.

Luca: Yeah. So anyway, Justin, it was great to have you here. I would almost say if I could, I would block the gate or so so as to prevent you from leaving and…

Justin: Wait, the gate looks closed to me right now.

Luca: Yeah. Maybe we will enact that plan. No, but I really hope to have you over again. [00:16:00] It’s been great fun and super informative. And if people have any questions, they can find your contact details in the show notes. And hit him up! Don’t take up too much of his time because we need him too.

Justin: Okay. Thank you, guys, as well. It’s been a pleasure.

Luca: Now let’s eat some of that fish risotto you were talking about. All right? Wish us luck.

Justin: Buon appetito.