【Portugal】Did you pay too much for your property? – Analyzing the process and market trends of “purchasing property by oneself”
When settling in Portugal, we all want to have our own home. Here’s a complete guide to buying a house in Portugal. What are the things you need to pay attention to after finding your dream home?
Contents
Market price
Common housing purchase disputes often revolve around “price,” and sometimes the real market price can be distorted due to language barriers.
Idealista’s website provides average market prices for renting and buying in various cities/districts, but an objective evaluation of the conditions is also needed to make a more complete assessment.
Even in the same city or district, there may be different “market conditions,” and the following factors can indirectly influence them.
In many cases of purchasing property, the most common dispute is that the transaction price differs significantly from the market price. In addition to searching for market prices online, there are several other factors to consider when buying a property, such as:
- Age of the property: There will be price differences between new developments, renovated properties, and older properties. When comparing prices, it’s important to compare properties with similar specifications.
- Location: Even within the same city and area, prices can vary depending on the exact location.
- Amenities: Amenities such as a doorman, elevator, communal garden, swimming pool, gym, and other facilities will affect the price.
STEP 1 Negotiating the purchase price
When negotiating the purchase price of a property in Portugal, there is no definite answer as to how much room there is for negotiation. During the negotiation process, the buyer will make an offer, and if the seller agrees, the deal will be closed, or the parties will renegotiate the price.
After showing the property, a real estate agent will usually ask if the potential buyer is interested in making an offer. If so, the buyer will need to fill out an offer form, which includes basic personal information and the offered price.
The agent may also ask whether the buyer intends to pay in full or use financing. As the financing process can take longer, the agent will need to communicate with the seller. If necessary, the agent can also provide assistance in applying for a loan through a partnering bank.
STEP 2 Deposit and Signing
Signing the contract is known as “CONTRATO PROMESSA DE COMPRA E VENDA” (CPCV), which can be translated into a purchase and sale agreement or contract.
On the day of signing the contract, a deposit or agreed-upon amount must be paid, depending on the negotiated terms of the contract.
The signing of the contract can take place at a lawyer’s office or at the real estate agency’s office.
The process and signing of other contracts or payment methods may vary depending on the type of transaction.
If one is not comfortable with using a standard real estate agency contract, they can request a lawyer to draft one or to review the existing contract for necessary adjustments.
An English version can be requested if one is not familiar with the Portuguese language, but it is important to note that in case of disputes, the Portuguese version will be the governing language according to legal regulations.
STEP 3 Transfer of ownership
The Portuguese term for transfer of ownership is called “Escritura”, and it is arranged by the real estate agent, bank (if there is a loan), seller, buyer, and notary lawyer. On the day of transfer, the lawyer will read all documents and verify identities. Non-native Portuguese speakers will need to bring a translator.
The buyer will also sign relevant documents for bank loans (the same documents signed at the bank, but with the transfer date). The remaining payment for the house purchase will be made according to the contract terms.
At the end of the transfer, the buyer will immediately receive the certified contract, Registo Predial (property registration certificate), and the key to the property. The buyer will also need to pay relevant taxes and share the notary fees with the seller on the spot.
STEP 4 Tax address
If it is a property for personal residence, the address must be changed at the tax office within 10 days. It takes about a month to confirm with the tax office whether the transfer of ownership and payment of taxes have been completed.
