5 things that might surprise you about Portuguese real estate

On a recent trip to Portugal I had the wonderful privilege of having lunch with two highly experienced local real estate agents. They treated me to some wonderful tastes of  fish and fresh cheese and wine, and the conversation was equally delicious!  I couldn’t help but ask them about how things are done in their country, and what I learned was more surprising than I could have imagined!

1. No one knows how much anything sells for! That’s right. There is NO historical record of selling prices available to buyers, sellers or even the agents! Imagine this… 3 units in one building can sell within a few months, and now you want to sell your unit in the building.  There’s no such thing as an agent providing a comparative market analysis to propose a suggested list price to the seller based on recent sales, so unless your neighbours have told you what the selling price was (and that is highly unlikely in this culture from what I understand), you will simply tell your listing agent the price that you want for your condo and you’ll wait to see if any buyers come forward at that price. If there’s no interest, then after a number of months you might lower the price a bit. Eventually a buyer hears about it, and they make an offer and the negotiation begins, with that buyer maybe not even knowing that these other sales had happened, let alone how much they sold for.  It’s possible that all 4 units in that building could sell for widely varying prices, even if they are of similar size and with similar amenities.
2. Prices are high! There was an apartment building across the street from the restaurant where we were having lunch in Lisgon, so I inquired about the value of those units. My host Rafael suggested that a 2 bedroom property in that building about 700 square feet would be worth in the range of $600,000 Euros!  That’s about $960,000 in Canadian dollars.  How can he know that, you might wonder, given that there is no shared information about selling prices? It’s all based on one word … experience.  Agents who are busy get to see what buyers and sellers finally agree on as a sales price, so they build up their own data base of values in order to be able to provide their clients with a rough idea of what the market will likely bear.
3. It’s considered normal to not have a heat source in the house. That apartment I just mentioned? Rafael said at that price it almost certainly wouldn’t have heat.  A low of +10 on a winter day might not sound very cold if you’re from Canada, but when your home is made of stone and that’ your indoor temperature, it can be extremely uncomfortable!  Woold and down are your friends in the winter months, both indoors and out!
4. Buyers don’t do inspections before purchasing. You would think, given the age of many of the buildings, that inspections would be the norm, but it seems that buyers simply accept that they’re buying an old home and it will need work. If it’s a condominium, they will look at the condo documents to understand their monthy costs. Buildings are either self-managed or professionally managed by a management company, which is similar to here. The difference seems to be that self-managed buildings may be harder to gain agreement on completely costly repairs as issues arise, protecting the building for the long term. One story he told was of a building where an owner had a water leak coming from an exterior crack in the building. The self-managed board said it would be repaired in a year or so when the whole building would be painted. In the meantime, the owner is left to try and hold the trickle of water at bay using caulking on a regular basis.  Hard to imagine, but true!
5. Permits can take… forever. Perhaps you dream of buying a home in need of some TLC but your plan is to renovate it and make it your European get-away, plus an Air BnB in between visits. On paper, the numbers might look attractive, especially if you can get a better price by buying in a smaller center. But beware, while many home owners do work without permits, you might decide you want to do it by the book (ie the Canadian way).  This sounds smart of course, but getting a permit could literally take years. This leaves you with no vacation/retirement dream home and no Air BnB revenue either. And when you do get a permit, keep in mind that the work force is low and there is a different approach to rushing here… as in they just don’t believe in it.

Having said all this, you might be asking yourself who would even attempt to purchase in Portugal? I know someone who has done it, and while they are dealing with a very slow pace for their renovation, and with frustrating permit situations, they’re keeping the big picture in mind and trusting that the sweet life in Portugal will one day be a reality for their family.  If part of your reason for choosing Portugal is the kindness of the people and the slower, more gentler pace of life, you’ll be well served to remember that that slower pace will apply to every aspect of your purchase and renovation as well.  The beautiful thing about Portugal is everything is about relationships. So, while it might take much longer to be settled in your new home, by the time you are you’ll have a Realtor, a Contractor and someone at city hall who will feel like close friends already. 😉