Real estate commission in Italy
Knowing the basics about how real estate agencies operate, and being able to weigh in the essentials on real estate commission, is vital for anyone desirous to buy property in Italy. There are a few core elements about the “world” of Italian real estate agencies (agenzie immobiliari) which foreign prospective buyers may not be aware of, simply because they differ from what happens – and is allowed – in other countries. First and foremost: in Italy not all property sales are handled by agents. Some are private, i.e. handled directly between purchaser and vendor, others allow for an intermediary (mediatore) who advises/counsels/handles the relationship between vendor and buyer. However, due to their usually less extensive network of contacts and often to language barriers, many foreign buyers investing in Italy generally deal with real estate agencies. The question that immediately pops up in one’s mind is: can you be sure you’re working with a “real”, i.e. certified and accredited, agency?
The answer is yes, you can, because Italian legislation maintains that to work as a real estate agent, or agency, one needs to be fully licensed. To get a license one must attend a course (teaching appraisal, civil law, tax law, basic banking and building techniques etc..) and take a state examination. Further to this the agent will apply to be formally registered in a specific Public Register. The Public Registers implied, REA (Repertorio Economico Amministrativo) for individual agents and Registro delle Imprese for agencies, are lodged within the local Chamber of Commerce (Camera di Commercio). Consequently, all licensed and registered real estate agents are given a certificate from the local Camera di Commercio and have a registration code. The law clearly states that only qualified agencies are entitled to commissions. What about non-licensed and non-registered agents? Unqualified non-registered agents and agencies practice against the law, and thus incur in (high) fines and/or may be jailed from 6 months to 3 years.
Provided a prospective purchaser is dealing with an honest legitimate qualified agent, needless to say there will be a sales commission to take into account.
Commissions on sales applied by Italian real estate agencies are called provvigioni and regulated by Article 1755 of the Italian Civil Code. The article states “The Agent has the right to demand a commission fee from each party, if the deal is concluded as a result of his intervention. The extent of the commission and the proportion in which this must be borne by each of the parties, in the absence of an agreement, professional rates or uses, are determined by the judge according to equity”. An item clearly expressed in the above which may surprise a foreigner is that in Italy agency fees are paid both by the vendor and by the buyer.
Another aspect that differentiates Italian real estate agencies from those elsewhere is that in Italy real estate agency commission fees are due when the two parties (buyer and vendor) find an agreement, any agreement, and not necessarily when the ownership transfer is finalized. That is to say that agency commission fees may be demanded when the prospective purchaser signs his/her first offer, or when the Preliminary Contract is drafted.
Once a prospective purchaser has understood the main elements of how real estate agencies operate in Italy, and that the only agents entitled to demand a commission fee are the legally certified and licensed real estate agents, what he/she really wants to know is the amount one should expect to be asked for. A challenging query, seeing as there is no set predetermined percentage applied. In fact in Italy agency commission fees not only are shared between vendor and buyer, they are also negotiable and variable.
As concerns negotiability the “most powerful” party is the vendor, generally able to obtain a lower commission rate. The percentage can differ greatly depending on a variety of factors, including, but not limited to, the actual price of the property, its prestige, location etc…
Inasmuch as commission rates are negotiable, and thus need to be agreed upon, it may happen that the parties are not able to come to an agreement. In this case, generally, the agency and parties settle for applying the commissions as stated in the Chamber of Commerce in charge of the area. For instance, should a non-agreement on applicable commission fees occur in the city of Florence the commissions applied will be those as detailed in the Code of common uses of the Florence Chamber of Commerce: https://www.fi.camcom.gov.it/sites/default/files/uploads/Regolazione_del_mercato/Tutela_di_consumatori_e_imprese/Usi_e_consuetudini_provinciali/RaccoltaUsi2015.pdf
Last but not least: prospective foreign purchasers should be well aware that Italian real estate agents are in no way responsible and/or liable for what they sell. Once the deal is finalized, and commissions settled, their job is done and they have no pending responsibility on the property, its conditions or other.
Sourcing an honest and dependable real estate agent in Italy may be challenging for a foreign non-resident, especially because not all agents or agencies work throughout the country. And obtaining fair commission rates, or successfully negotiating the fees, might prove to be disquieting due to language, as well as behaviour and “custom” barriers.
Having a reliable and solid local consultant by your side enables you to gain untainted insight, and finalize your purchase faster, better and smoothly.
Trustworthiness, reliability and proficiency with the local real estate market are our assets. Specialized in real estate law, fiscal law and real estate negotiations, we share our insider’s knowledge, and provide you with the tools you need to profitably invest in Italian real estate.
What we can provide:
- thorough and detailed research on real estate agencies;
- a comprehensive database of trusted real estate agencies;
- negotiation of the real estate agency commission fees;