house sale - contract conditions

The way we worked our contract as buyer is that we make the down payment into an escrow account we had the notary set up (this did cost 2,000 Euros). If either the seller or buyer backs out for any reason, they must not only pay back the deposit but DOUBLE the deposit.

Our notary said we should make the deposit into the seller's account and the rest of the money for the final sale will go into escrow. He said it would save us money.  However, we aren't that trusting. We requested that the deposit go into escrow as well, not into the seller's account. Just safer that way.
Not sure if this helps but good luck!

Yours is a very common problem.  The laws and practise regarding property and those regarding fiscal matters are now hopelessly out of line.   
Bear in mind that to get a mortgage in Italy the bank will do nothing until it has a registered copy of a preliminare (compromesso) and in some cases a certificate of agibilità.  Only then will the wheels begin to slowly turn.   
Nowadays it is normal for a contract to be declared null if the mortgage isnt granted, and the preliminary  will say this.   The agibilità is not yet obligatory for a sale if the property is old and hasnt had structural interventions in the last 20 years.  In such cases, the buyer should pay for the agibilità if he needs it.
I also presume that the estate agent is going to want his commission even if the sale falls through. (They have the legal right to ask for it).   On that basis I would tell the agent that you would be willing to sign if they waive their commission if there is no sale - and get it in writing.  If they wont agree then dont agree to waive the return of the initial deposit at proposta, as otherwise you could end up out of pocket.   The deposit at proposta is usually held by the agent until the caparra is paid at compromesso, (but is payable to you.  There is no reason why the monies cant be sent to the UK but obviously this can only be done with full agreement between the parties.    The notaio may or may not do this, its his choice - and you will pay for the notaio to keep the money in his escrow account.  Obviously the choice of notary is the buyers so you have to wait and see whether its possible.

You sound very knowledgable on Italian law. So I have a question for you. We are buying a place in Italy. Our agent and notary suggested that we place our deposit into the seller's account. We trust our wonderful agent, but business is business and we said even though it will cost us more to place the deposit into escrow (which we have already set up), we want it in escrow. Is this a reasonable request to you? Didn't want to sound distrustful, but curious!

It depends what you mean by deposit.  The caparra paid at the proposta should not be paid to the seller, the caparra at preliminare yes, but not before anything has been signed.  Its easy enough to write a clause saying that the money will be paid (for example) within 3 days, and you just provide proof of the bank payemnt with the TRN (ex CRO) number.    To me its not a good idea giving people money before they have signed anything - if they dont turn up to sign, you've just given someone a very nice present.

Thanks to both for your replies. Modicasa I'm grateful for your pointing out the need to clarify with agency whether they would expect their commission if the contract is declared null. I was so focused on the terms with the buyer that it hadnt even occurred to me that we could find ourselves in the nightmarish scenario of having to pay thousands in commission without a sale!
It's also helpful to know that the invalidation of the contract in the case of a mortgage being denied is normal. It just remains for us to clarify the agency's terms and also ask them to make sure the notaio would be willing to do a bank transfer to the UK.
Thanks again