FinanceLifestyleMortgagePropertiesThe Preliminary and the Mortgage Clause: An aid to foreigners who want to buy a home in Italy with a mortgage without the risk of losing money.

26 January 20240

Buying real estate in Italy can be a fascinating opportunity but also a complex challenge, especially for foreign clients. The need to navigate a different legal and financial system, combined with language barriers, can make the experience intimidating. However, with the right information and tools, such as the preliminary contract of sale (the so-called “compromise”) and the suspensive clause for obtaining a mortgage, it is possible to significantly reduce the risks and make the purchase a safe and satisfactory process.

The Preliminary Contract of Sale (Compromise): A Necessary Foreword

The preliminary contract of sale is a binding agreement between seller and buyer, in which the terms and conditions of the real estate sale are established. This contract is particularly important in the Italian context, where the buying process can take several months. The “compromesso” guarantees both the seller and the buyer that the agreement reached will be respected, allowing the buyer to proceed with a mortgage application and the seller to be sure of the seriousness of the purchase intention. This step is crucial, as it marks a concrete commitment to the real estate transaction, providing a legal framework that protects both parties.

The Suspension Clause for Mortgage: A Fundamental Safeguard.

One of the most interesting and important aspects in the preliminary contract is the suspensive clause for obtaining a mortgage. This clause makes it possible to “freeze” the effects of the preliminary, making the deed effective only when a future and uncertain event occurs, in this case, the approval of the mortgage by a lending institution.
The presence of this clause is particularly beneficial to the buyer and especially to foreigners, as it provides protection in case the mortgage is not granted. Without this clause, the buyer could find himself in a difficult situation, having to give up the purchase and losing any sums already paid.

The Benefits for Buyer and Seller

For the Buyer
The inclusion of a condition precedent assures the buyer that, in the absence of mortgage approval, he or she will not be required to proceed with the purchase, limiting his or her exposure to any minor expenses agreed upon in the contract.
For the Seller
The seller also benefits from this clause. In the event of problems found during the lender’s inspection that could lead to a mortgage suspension, the suspensive clause allows the seller to have a margin of time to resolve the issues and proceed with the sale.

Legal and Practical Aspects of Inserting the Suspensive Clause

From a legal point of view, the suspensive clause does not need specific formal requirements, but it is essential that it be drafted clearly and precisely. It is important to indicate the conditions of the event’s occurrence or non-occurrence and the time limit within which it must occur. If the event does not come true (e.g., non-granting of the loan), the contract becomes ineffective.

Tip

It is advisable to always rely on an experienced real estate professional to draft the preliminary contract and include the suspensive clause.
A lawyer, such as an agent, a mortgage consultant can provide the advice needed to navigate the legal complexities and ensure that all aspects are adequately covered.

Conclusion

Buying property in Italy represents a unique opportunity but requires an informed and cautious approach. The preliminary contract of sale and mortgage suspensive clause are essential tools to reduce risk and ensure a safe transaction. It is essential for foreign buyers to become properly informed and take qualified advice to successfully navigate the Italian real estate market.

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