How Buying Property in Portugal Might be Different
As our clients are mostly foreign buyers, we started to compile some reoccurring differences that Rafael and I have taken note over the years when our clients are buying in Portugal vs. other places. For this post, we are going to focus on North American differences in terms of property buying as we have quite a few American and Canadian clients.
These differences were shared with us by our clients and sometimes these points below have caused much confusion, stress and frustration. We hope this list will help other potential property buyers when here in Portugal. Here goes!
Offers are not registered with any regulatory body in Portugal. This may not seem like a big deal, but it is one of the biggest deal. This means that there is no irrevocable or time line set for offers. The seller doesn’t need to disclose how many offers they are entertaining, nor is the actual sold price listed for transparency. There’s no priority between multiple offers coming in. Unless a contract or promissory note is signed, any agreed upon offer is not legitimate until the seller and buyer sign the promissory contract called CPCV, Contrato de Promessa de Compra e Venda.
There is no cooling off period in Portugal. After agreeing to buy, it’s up to the buyers’ legal team to include exit clauses to allow for buyers to back out of the deal in case there’s a change of heart.
There is no title insurance company in Portugal. After an offer is accepted and a CPCV is signed, the lawyers are required to locate all of the living deed holders, liens etc. and make sure there isn’t any outstanding fines or persons that may lay claim to the property. There isn’t a comparable service where the new owner is protected from losses pertaining to the title of the property.
In Portugal, married couples must have their current spouse registered on the deed. This may not be a big deal for some couples but for others, this may seem like an outdated patriarchal rule.
There is sometimes a '“registration fee”, where the seller receives a small monetary offering to “hold” the property for you in Portugal. This isn’t the downpayment and it’s also not legally binding but more of a sweetener to the deal to show sincerity. Then you just cross your fingers and hope the seller doesn’t sell to someone else.
There is no MLS (multiple listing service) through a regulatory body in Portugal, which means there’s a lack of data, therefore a lack of transparency. The closest version of a MLS site might be Idealista, which is a for-profit website that anecdotally has about 80% of the real estate inventory listed but the information there is from sellers and agents, which is not vetted and sometimes misrepresented. Because transactions are not registered to a regulatory database, it’s not easy to find much information outside of what the seller’s agent(s) are willing to share.
Digital signatures are widely accepted in North America for real estate transactions. In Portugal, most of the transactions require IRL signatures by the buyers or by their power of attorney.
This list is by no means an exhaustive one. This is just the beginning of why Rafael and I make it our mission to not only get our clients the best deal, but to protect our clients and help them make decisions, eyes wide open.
But don’t let these differences hinder your property ownership dream as we are here to help you navigate the property buying waters.
Let us know if you are interested in understanding more differences from other places and where. We would also love to hear any of your experience in differences from your home country while buying in Portugal.
As usual: Até já,
Mia and Rafael