Negotiating a house in italy

Get the 'cheapest' house in Italy
Negotiating a house in italy

Never split the difference!

So, you’ve found your house and you want to buy it - what’s it going to cost you?

First, negotiate. It’s an art that not many study, so you want a capable agent. You might need to offer help if you possess better skills than them but you should be able to negotiate a lot off the sale price - it will depend on whether the house has a reasonable listing price and what the demand is.

Here’s the most important tip I can give on this: don’t tell the owner you love their house, don’t look too excited.

I know I don’t need to explain why. Just be nice and friendly. Don’t walk around acting as if you hate either. This does not work.

The agent gets paid a commission from the buyer and seller so it might seem obvious they want to keep the price high. I’ve not found that to be true - they want the sale, for whatever price.

Also, like anywhere else, owners who are selling can sometimes be ‘optimistic’ when it comes to valuing their property.

The challenge is to convince them that their house is not worth what they’re asking. To overcome this you need information, a lot of it. Observe, and ask questions about who they are and why they’re selling.

There are a number of different reasons they could be way off on the price:

  • They see other houses for sale and compare. This is a problem as the houses they make comparisons with could also be overpriced.
  • They have an unrealistic view of their own property. They might think it’s beautiful but it might not be. Emotions could be involved.
  • They need that amount of money for something - the next house, plastic surgery, etc.
  • They see you coming. ‘All foreigners are rich’ and they might even ask for a higher price than the asking price. (I was just writing this line when a Swiss lady called me and said this is exactly what just happened to her!)

How do we negotiate with someone with an unrealistic valuation? We need to hit them right between the eyes with facts and bring them down from that dream-like state into reality.

They won’t like it, they’ll squirm and curse but if they have an ounce of reasonableness in their bones they’ll back down and take the offer. If they’re not reasonable, it might be better to walk away. It can take years to convince someone their house is not worth their asking price.

Let’s talk about the negotiation..

The offer has to be very carefully prepared and you need to look for what the FBI calls ‘Black Swans’. This expression was once used to describe something that didn’t exist until one day someone stumbled across black swans in Australia! So, we’re looking for the seemingly impossible, the hidden reasons.

I’ve heard many experiences of how this can work, and work well. Stubbornness can be overcome with a little work and determination. If you’re not working with a smart agent you’ll have to help them.

OK, the price isn’t so unreasonable but if you want a deal, you need to know their lowest price. How do we do this?

Get the facts, find the Black Swans, they are there.

It could be that:

  • They’re buying another house and need to sell fast - offer them the solution. That you’ll sign quickly, pay a deposit and close the sale as soon as possible. This could save you a stack of money.
  • They’ve inherited the house and there are several owners. €1m between 6 people isn’t so much.
  • They’re elderly and can no longer look after a large house, gardens and land.
  • The children have left home and the house is too big.

One we had recently - the owner was in very poor health, at the end of his life with no family, just a distant cousin. If the cousin inherited the property he’d have to pay around €200,000 in inheritance taxes. And he was broke! Finding this out was crucial in getting the asking price of €2.5m to €1.3m.

They need a solution. You are a solution to their problem.

You have to find out what they need to resolve their issue. It can seem impossible but I promise you it isn’t. Relax, take a bit of time and keep communications open. You need information.

Don’t listen to - well, I spent this on it. Sorry, but we all did and the economy is not great so we can’t always get our money back. They need to realise this and you can help them. Give them an example of a house you just sold, or something similar. Also, point out that the situation could get much worse - the house will devalue, it will need work, etc.

Or just buy it for goodness sake!

It’s great, it’s what you want, the owner is not being ridiculous about the price and you can afford it. Why not just buy it? Someone else will and you lose it. If it’s just a game of negotiations and pride it can get a little frustrating for everyone. See good for your hard work and make everyone happy, especially you.

Do foreigners pay more for houses?

Well, the answer is usually yes, kind of.

Everyone wants the views, no neighbours, the vineyards, the pool, whatever.. if it's the one everyone wants and there are people willing to pay the extra over a house without a view, without a pool and has close neighbours, it’s worth more. You get the point, right?

Foreigners pay more because they want the house that every other foreigner wants, it’s rare and very desirable. You don’t have to go down this route but be prepared to make compromises.

Watch my Buyer's Guide series on YouTube