Real estate commission rates (fees) and payment schedules
When planning to purchase a property in Italy, you would usually seek the assistance of a licensed real estate broker for the initial property search. The real estate broker has the duty to facilitate the transaction and to inform both the seller and the buyer of all details and aspects which may be relevant.
Real Estate Agent’s Commission
As in most countries, Italian real estate agents’ commission (provvigione) varies. In Italy, commission payment to a realtor is usually shared between the vendor and buyer. According to art. 1755, paragraph 1 of the Italian Civil Code, commission is paid once, due to the assistance of the estate agent, the sale has been complete. Legally, an estate agent must be the effective cause of the sale. This means that the agent must be able to show that their ‘introduction’ of the buyer led to the formation of a deed of sale between the vendor and buyer.
Generally, commission payments range from 3 to 8 percent on both sides of the property sale price. Some agencies work on a fixed fee commission – based on a percentage of the total sale price. It is always worth asking if a real estate agent’s fees are negotiable.
For budget purposes, it is very important to check exactly how much commission you will be required to pay to your real estate agent. Bear in mind that the fees are in addition to the sale price and other fees and taxes associated with buying a property in Italy.
Commission Payment Terms
Before you engage the services of an estate agent, it is crucial to ascertain when the commission must be paid. Often there is a stipulation in the preliminary deed of sale that triggers the agent’s right to receive commission, even if the final deed of sale is never completed.
If a preliminary deed of sale is considered as a conclusive act of the deal, it is important to consider that the client and the real estate agent can make reference to the Italian law, whereby, as previously mentioned, the estate agent is only entitled to receive commission once the final deed of sale has been signed by the buyer and the seller.
The clause subject to the successful completion of sale
An important aspect that needs to be mentioned refers to ensuring the inclusion of a clause in the preliminary deed of sale to the effect that the estate agent’s commission is payable subject to the successful completion of a deed of sale. This represents a condition precedent, which regulates the payment of commission once the deal has been successfully completed through a deed of sale.
In other words, the real estate agent is not able to claim any compensation in the event that the contract signed by the parties – connected by the real estate broker – does not result in the completion of a deed of sale for the property.
In addition, before signing any paperwork, you should ascertain whether the agent will charge extra for services such as additional viewings you want to make. For example, will the agency charge you if you want to send a surveyor to look at the property?
For more information about the Italian property sales process, you might be interested in reading our comprehensive guide. We would always recommend that before signing any paperwork with an estate agent that you seek independent legal advice. With over 50 years of experience of Italian real estate law, we can help you. Get in touch if you are feeling unsure about anything property-related and need advice: firstname.lastname@example.org