Home Buying in Portugal

Posted 6 months ago by Mike

Emi and I recently moved in to our new apartment in the city center of Braga. This was our first time buying real estate in a foreign country and I would like to share our experience.

 

The house hunting process has some key differences with what we were accustomed to in the United States. First of all, there is no MLS. The website Idealista is the closest thing to MLS but it is not well moderated and can have outright scam listings or properties that are no longer available. Therefore it is very important to have a realtor and attorney on your team. However, all realtors will push you towards listings within their company and even some will outright refuse to show you listings outside their company. So also important to work with a realtor that does not have a problem showing you listings outside of his/her company, but the struggle can also come from the listing agent not wanting to show to a realtor not working for the listing company.

 

We ended up viewing 10-12 apartments before finding one we wanted to immediately jump on. Yes, apartment and not a house because 1) we want to live in the city center and 2) houses in the city center are rare or out of our budget. After accepting our offer, we entered into contract, known as a CPCV (contrato promessa de compra e venda). This includes a down payment usually in the 5-10% range which is paid directly to the seller. Unlike the US where the earnest money is alot less and held in escrow by a title company. In Portugal if the buyer backs out, they lose the down payment money. If the seller backs out, they must reimburse the buyer double that amount.

 

We had to wait 16 weeks before closing on our property because of a contingency that needed to be satisfied before the seller could transfer ownership to us. Our apartment had been sitting vacant for nearly 10 years while the siblings that inherited it tried to resolve their stake. So the contingency was the completion of the sale to one of the siblings who then would sell to us.

 

When the time finally arrived for closing, all parties including a neutral lawyer/notary are present in-person. Unlike the US, where it is uncommon to meet the seller’s directly. The lawyer reads the entire contract, in Portuguese of course, but our agent translated for us. The deed contract is signed. A bank check (like a cashier’s check) is handed by us directly to the seller. We initiate additional bank transfers for lawyer fees, taxes, and deed registration. And finally, we receive the keys and officially take ownership.

 

Before we moved in to the new apartment, we wanted to have some renovations done. Nothing major, mostly comestic and some functional upgrades. Finding reliable contractors can be a struggle here in Portugal. Some people say it is because the highly skilled, more professional ones all work in other EU countries where they can earn a higher salary. Or they are tied up with commercial or developer projects. Despite this, we were very fortunate to receive a referral from a friend for a contractor. They are a team of two, both from the Ukraine. The challenge is they do not speak English and very limited Portuguese. So we had to communicate almost entirely using Google Translate. It worked out and they completed a list of nearly 50 work items within a few weeks. Incredible.

 

Housing prices in Braga varies drastically by location, new vs old construction, remodeled vs not, etc. But the cost of real estate here is relative to what you are accustomed to. For us, this new place is much larger than our Portland condo and even a bit closer to the city center which increases the value/price, yet we paid about 30% less. However, if you were coming from a rural area of Missouri or Mississippi, you may feel that Braga real estate costs about the same or perhaps is even a bit higher.

 

While this apartment is not new construction, it is a well-maintained building and we had enough room in our budget to do alot of updates to the place. The location, the large garage, and the size of the apartment were the most important things for us. We are a 10 minute walk to the city center and 15 minute walk to the heart of the historic district also known as bar/restaurant row 🙂  We wanted this location because 1) we are close enough to walk everywhere yet 2) not in the middle of the tourist/festival zone.  We are happy with our decision and really enjoy living in Braga and Portugal.