Stages of Buying Property in Portugal
The real estate market in Portugal has been growing, depending on the demand for real estate in Portugal.
The process of buying a property in Portugal is simple and straightforward and consists of 4 main steps: Choosing the property, Reservation, Promissory Contract and Deed.
STEP 1 "SEARCH FOR THE IDEAL PROPERTY"
Once you have a pre-approved mortgage (in case you need bank financing) or at least a clear understanding of how much money you have to spend, that's when you can start looking for your dream property.
After searching and finding the property you ideal for with your real estate agent and having reached an agreement on the price with your agent/seller's representative, the first step is to make a reservation and formalize your intention to buy.
STEP 2 "RESERVE"
Formalizing the intention of the purchase, this implies 2 situations in general:
Firstly, the property is taken off the market preventing any other potential buyer from visiting or making an offer to buy even if it is of a higher value.
Secondly , it allows your Real Estate Consultant, through your chosen lawyer to check the property license and all other legal aspects and make sure that everything is in compliance.
Normally a down payment of between €6,000 and €20,000 is considered acceptable and the time allowed to lawyers to complete their work is between 15 and 30 days, both negotiable.
Once you are ready to make the Booking the process is simple: just sign a 2-page document together with your Real Estate Consultant and your lawyer, paying the agreed booking deposit.
STEP 3 "PROMISSORY CONTRACT"
Once your lawyer has completed all the due diligence related to the verification of the property documentation, you will be sent a list and request questions related to the property from the seller and a draft of the promissory contract, which includes the important points related to the sale and a complete summary of the property. This contract is then sent to you by the lawyer together with your suggestions and any changes that need to be made.
As soon as both parties agree on the promissory contract, the buyer will have to pay, as a deposit, a percentage of the sale price, which can vary between 10% and 60%. At this stage, the contract is legally registered and it is then extremely difficult for the seller to back out of the sale. In fact, Portuguese law guarantees that if the seller withdraws from the sale after the promissory contract, he will have to pay double the deposit already paid by the buyer. In this way, the buyer will always be assured since the consequences of non-compliance with the promissory contract are quite strict.
STEP 4 "SCRIPTURE"
This step is quite simple and straightforward since much of the execution of the sale process takes place when the promissory contract of purchase and sale (CPCV) is executed. If your property was purchased while still under construction, the lawyers will need to make sure that it has the permits and all legal aspects in order, while also ensuring that the property is free from taxes or charges. Once this process is completed, your purchase will be finalized with the payment of the missing amount. It is then up to the lawyers to register the property in the name of the new owner, and the sale process is considered finalized.
In case the intended property is ready, along with the documents and permits in order, and the money needed for the purchase is available, then one can skip Step 2 and proceed directly to the deed. However, many buyers do not have the money available in 15-30 days, which is why in 90% of property acquisitions the promissory contract of purchase and sale is signed.
Buying property in Portugal is a transparent process and you, as the buyer, are completely protected throughout the process.
New Residence is here to make this process even easier for you by supporting you every step of the way of buying property in Portugal.