The Montalcino House
A crash course in the Italian home-buying process
Back home in Minneapolis, we couldn’t stop thinking about the Montalcino house.
Elena, the owner’s daughter, had told us that the appraiser had mentioned one price, but given that the home needs work, she has another (lower) price in mind.
If it was that other, lower price, we were interested. How much would it cost to renovate the home? It’s hard to know. It’s been more than twenty years since we’ve lived in Italy - prices have changed.
Even with renovation costs, this house was more affordable than anything we had seen in Rome. The small-town hospitality of Montalcino and the good-natured qualities of Tuscans were appealing, as was the fact that Montalcino is a world-class wine destination, attracting tourists from all over the globe.
We ran some numbers and decided to take the plunge. We sent Elena a quick email telling her we were ready to move forward at the price she mentioned. With butterflies in our stomachs, we awaited a reply.
It came the next day. Elena said she was happy to hear that we are interested in the home but that she had spoken to her brother and, regrettably, non è d'accordo sulla somma che vi ho proposto. He was not in agreement with the sum she had proposed. He believes the home is worth more.
Of course. It had all seemed too good to be true. We agreed to wait for the written appraisal report and follow up.
When the appraisal finally arrived, we skipped over the narrative and went straight to the valutazione: it was even higher than expected. Our hearts sank, and our hopes faded.
We let it marinate for a few days. Based on everything we’d seen for sale on the market, the appraised value wasn’t crazy, but it was more than we were comfortably spending, and there were still renovation costs. We really loved the home, though. We were willing to stretch a little. It was worth a try to see if we could come to an agreement.
We sent another email to Elena, proposing:
Purchase price just over halfway between the first price she named and the appraised value.
Off-market transaction - no agency fees for them to pay
No Italian mortgage or banks to deal with - we’ll figure out our financing in the US and bring cash.
Closing as soon as February 2024, or whenever they wish.
The reply came the next day: D’accordo.
They agreed with our terms! O mio dio! We were elated and terrified at the same time. “Benissimo!” we replied. We’ll get a formal agreement written up and send it over.
We called a realtor we know in Rome, told him that we’d found a property in Montalcino and negotiated a price with the sellers. Would he be willing to write up a purchase agreement for us and see us through closing?
Our realtor, Mauro, is fantastic. We met him over a year ago while looking at apartments in Rome. Hard-working and professionalissimo, Mauro is also licensed in the US, having obtained his real estate certification a few years ago when his wife’s job led to a brief stay in California. We hit it off at our first meeting in Rome and have stayed in touch since then.
Mauro agreed to help us get under contract and to the closing table, “but first,” he said, “allow me to do my due diligence on the property.”
Not having seen the property in person and without photos to help him (we didn’t think to take pics the day we visited the house), Mauro reviewed property records and conducted a comparable market analysis.
A Word about Comps
In the United States, real estate data is readily available. Anyone with a smartphone or a computer can look up the a property’s sale history, generate an estimated home value, and even run comps by looking at recent neighborhood sales.
In Italy, it’s much less transparent. There is no Zillow or similar website to research recently sold properties. Only professionals with paid access to government databases can pull that information. You can poke around on the Italian Revenue Agency’s website to find average price per square meter for different classes of properties in specific locations, but it’s not user-friendly.
Mauro got back to us within a few days. He’d pulled comps, but not having seen the property in person, he had some questions about its condition.
“Ragazzi,” he said, “unless this is a villa Hollywoodiana, I fear you are overpaying.”
“It’s a lovely home,” we replied, “but no, it’s not exactly a Hollywood villa - at least not yet.”
Mauro broke down the comps for us. The price we had agreed to pay was consistent with the price of other properties for sale in the area, but it was higher than the price per meter of recently sold properties. In Italy, list prices are often inflated, he explained.
Mauro’s analysis was thorough and convincing, even if it wasn’t what we wanted to hear. We needed time to digest it all and decide our next steps.
After pouring through the data, using Google Maps to zoom in on the comps one by one, revisiting everything for sale in the area, and considering all of our options, we decided to proceed with the offer as agreed, even if we were pushing the price a little.
Our rationale? This home checked specific boxes that neither the other comps nor the current offerings on the market did:
A stand-alone home with no shared walls.
A small yard.
Potential for off-street parking.
Views of the Val d’Orcia.
An ideal location.
We believe in the upside potential of this particular property. And, we’ve fallen in love with the house. We gave Mauro the green light to put the paperwork together.
When the draft offer document arrived, we reviewed it with interest, curious to see how this Proposta di Acquisto Immobiliare compared to an American purchase agreement.
It was surprisingly brief - just two pages! But the essential components of a contract were all there: the parties to the contract, the property description, offer price, contingencies, rescission period and terms, financing terms, protocol in the event of a default, and closing timelines.
That statement found in American purchase agreements about the seller maintaining the property until closing and conveying it free of personal property and debris? It was in our Italian offer document, too. When we came upon it, we had to chuckle…
“The property will be conveyed free of things and persons, and until then the seller is obligated to maintain the property with the diligence of a good father of the family.”
Other key differences from the American home-buying process:
Buyers generally do their due diligence and inspections before an offer is accepted.
Offer documents are registered with the state, and buyers pay registration taxes.
The down payment is made at the time the offer is accepted, and it is sent directly to the sellers. Gulp!
We signed the offer, Mauro obtained the seller’s signature, we gave our down payment to a stork who flew it to Italy, and we were under contract!
A note to readers: We are not experts in the Italian real estate process. Rather, we are novices figuring things out as we go. By sharing our home-buying experience, we do not intend to offer advice. If you aspire to purchase a property in Italy, we recommend you engage the help of professionals to assist you with the process.
In our next edition of The Montalcino House, we will introduce you to our Geometra, a uniquely Italian figure who is a cross between an architect, a draftsperson, a surveyor, and a general contractor. He is helping us understand the requirements for renovating a home under the jurisdiction of historic preservation laws, as ours is. We hope you will follow along!
About Montalcino
Montalcino is a medieval town of approximately 6,000 residents, located about 25 miles south of Siena, 85 miles south of Florence, and 145 miles north of Rome. Perched on a hill in the heart of the world-class Brunello di Montalcino wine-producing region, Montalcino has scenic views of the olive groves and vineyards of the surrounding countryside. Visitors come from all over the world to enjoy the town’s cultural events and to experience its wine tourism. It’s long been one of our favorite places to visit.