The Italian Paper Chase – Part I

Back in Pittsburgh after the whirlwind tour of Puglia that saw us visiting thirty-three properties in four days, Jessica and I dived into the process of buying our Villa Tutto, and quite a process it was.  On the last day of our trip, Colleen and Francesco were kind enough to spend most of it walking us through the steps required in order to buy property in Italy.  Interestingly, except for getting codice fiscale (fiscal codes) which all Italians are required to have before engaging in any commerce, foreigners go through the same process as Italians to buy property.

Our goal was to return to Puglia over the Thanksgiving holiday, less than twelve weeks later, to close on the property.  There was clearly much to do in little time.  First, we had to make a formal proposal to Pietro, which we did through Francesco.  Our offer established the price we were willing to pay and listed the work that we wanted Pietro to perform at his expense.  That included removal of the tile on the kitchen wall, repairing of sun damage to the finish on the wood window frames and getting rid of debris scattered about the property.  Three days later, we were informed by Colleen that Pietro had accepted our offer.  The next day, we were informed by Colleen that Pietro had changed his mind.

Francesco and Colleen were terribly embarrassed by Pietro’s turnabout but, of course, it was not at all their fault, and we were able to resolve the difference with Pietro within a couple of days.  He agreed to do additional work and we agreed to pay another 5,000 euro.  No harm, no foul.

The next step was the “Proposta d’Acquisto Immobiliare,” the formal proposal.  This is a document that specifies all of the deal terms and is accompanied by a good faith deposit from the buyer.  Once the proposta is signed by buyer and seller, the process moves to the compromesso or the “Contratto Preliminare di Compravendita,” the preliminary contract.  This is a document, recorded with the relevant municipality, that defines with precision the property to be sold and the terms of the sale.  It also requires a deposit from the buyer to the seller and a fiscal code for each individual involved in the purchase/sale.  Without the fiscal codes, we could not sign the compromesso or give Pietro the deposit.

Where a hand money deposit is typical in the States, it is generally a nominal amount, it is held by an agent and it is refundable if certain contingencies are not met.  It is also the case that, once a seller accepts a buyer’s offer, he cannot thereafter sell the property to someone else.  In Italy, the hand money is 20% of the purchase price, it goes directly to the seller and it is only refundable under extraordinary circumstances.  Also, the seller continues to be free to sell the property to another buyer until title actually transfers.  In that event, the seller must pay the buyer twice the amount of the hand money, but it is not uncommon that a second buyer comes along with a high enough offer that it pays the seller to walk from the first deal.

Our attempt to get the codice fiscale, the fiscal codes, was our first opportunity to experience “up close and personal” the (in)famous Italian bureaucracy.  It was only a taste of things to come.

Understand that the Italian government wants people to have this fiscal code since it, like our Social Security number, is the basis upon which one’s economic behavior is tracked for tax purposes.  And, in writing, at least, it is relatively easy to get a fiscal code.  All you do is fax a copy of your birth certificate and driver’s license to the Italian Consulate and they will determine your code and send you the card that carries it.  It sounded that simple to me when I spoke to the woman at the consulate in Philadelphia who handles such things.  I asked her how long it would take to receive the codes once I faxed her the required documents.

“No more than five days,” she said definitively.

Within an hour, I had sent the fax that included copies of birth certificates and driver’s licenses for both Jessica and me.  Then we waited.  Meanwhile, Colleen and Francesco are working to keep Pietro on board despite the fact that we have not yet signed the contract or paid the deposit.  Three days, four days and, when nothing arrived on the fifth day, I called the consulate office and spoke with the woman of earlier that week.  I asked her when we can get the codes.

“Oh, I am waiting to get your wife’s driver’s license copy,” she said.

“I sent you that along with the other documents,” I said, probably a bit too curtly considering she had the leverage here.

“Yes, well, our fax machine broke before the last page of your fax came through, so I still need your wife’s driver’s license,” she said with not a hint of contrition.

“Is your fax machine working now?” I asked, trying to keep sarcasm from entering the conversation.

“Oh, yes, it started working right away.”

“Right,” I said, working on keeping the volume down.  “So, if I fax you my wife’s driver’s license right now, how long will it take for me to get the codice fiscale?”

“If you would like, I can fax them to you right away,” she said so matter-of-factly that I started to believe that the previous conversation with her had never happened.

“That would be wonderful.  You will have the fax of the driver’s license within ten minutes.”

Fifteen minutes later, I received a fax from the Italian Consulate with our fiscal codes.

Next:  The Italian Paper Chase – Part II

10 Comments

Dianna

26 June , 2012 at 7:43 pm

Oh my...not a good start but as I'm sure you'll find out it can only get worse...part of the 'dolce vita' seems to be accepting inefficiency and frustration in all forms and in all administrative situations without going postal as you would in N.A....great blog!

Scott

26 June , 2012 at 8:07 pm

Grazie, Dianna. Perhaps a challenging start but I'm sure it will have a happy ending. We are learning what a virtue patience is. Thanks for reading.

Scott

8 June , 2012 at 9:54 pm

I will do my best to keep it interesting. Thanks for reading.

Jeff

8 May , 2012 at 3:58 am

Scott, How do you remember all of this in such fine detail? I have trouble remembering if I took a shower yesterday. I take one every day so I assume I took one yesterday, but the facts my be a little fuzzy. Do you keep a daily diary?

Scott

8 May , 2012 at 1:51 pm

Actually, Jeff, I rely primarily on two sources: the emails I kept throughout the process AND, more importantly, your daughter who seems to remember some of the more interesting things that happened. Glad you're enjoying it.

Chris Coup

7 May , 2012 at 8:56 pm

Love the Blog Scott, really enjoying reading it! After reading the latest, I think i'll stick to selling real estate in the U.S.!

Scott

7 May , 2012 at 8:59 pm

You're wise beyond your years, Chris. Thanks for the kind words. Stay tuned.

Marion Lewis

7 May , 2012 at 5:38 pm

Scott, thanks for including me in the email about the blog. I'm loving it! Can't wait for the next installment.

Scott

7 May , 2012 at 7:38 pm

Thanks, Marion. Glad you're enjoying it. Stay tuned!

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