Buying property in Europe

The initial agreement between the seller and the buyer has to be entered into in writing (articles 1350 and 1351 of the Civil Code). In practice, the parties generally conclude a private agreement. 

The parties can conclude their written agreement (preliminary contract) without the help of professionals (lawyers, notaries, accountants, real estate agents). When the agreement is entered into with the assistance of a real estate agent, the real estate agent usually helps the parties draft the preliminary agreement. For more complex cases, a notary is usually involved. The preliminary agreement has to be in writing (a private agreement is sufficient:  articles 1350 and 1351 of the Civil Code), it does not have to be in the form of a notarial act. For the preliminary contract to be registered in the land register (which is possible under Italian law), the preliminary contract has to be concluded by way of a notarial act (article 2645-bis of the Civil Code).

The legal effects of a preliminary contract are generally that the parties involved have to execute the sale agreement within the time and on the conditions agreed upon (e.g.: the purchase price is set, date of handover of the property, etc.). Naturally, the parties have a lot of freedom to change the effects of the preliminary contract which may be subject to conditions precedent or subsequent: e.g. in case someone has a right of first refusal, a mortgage loan from a bank, if there is a need to check whether the property complies with town-planning laws, etc. If the parties want the preliminary contract to be registered in the land register, it has to be concluded by way of a notarial act. In that case, once it is registered, the effects of any possible mortgages or other encumbrances of the seller are void. A preliminary contract is not always registered; it is also possible to proceed directly to the notarial sale agreement, provided all elements required are available. 

In general, on signing the preliminary contract, the buyer pays the seller an amount of money by way of deposit or down payment on the purchase price. The parties can agree that this amount will be returned if the sale does not go through or, that the seller can keep it, for example, if the sale falls through due to the buyer's choice or responsibility. The parties have a lot of freedom to determine the amount payable and to provide for restitution or retention of this amount. 

The law does not provide any particular protection for consumers, nor a cooling-off period for real estate transactions. The seller only has to guarantee, by way of a special guarantee issued by a bank or an insurance company, restitution of the deposit in cases of properties to be built or under construction and if the building is not completed.