Buying an unfinished home in Portugal

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Because of its lower cost, many expats are opting to buy pre-sale properties in Portugal. That is, to pay for a property that is not yet built. (Usually construction will take up to two years.) Buying pre-sale can be financially rewarding. In Portugal, the buyer is required to pay a small percentage initially - usually around 20%. Between the start of construction and completion, the price of the property may increase. At the same time, buying on pre-sale can carry its own risks. It is very important that you do all the necessary research before doing so. In this article, we will look at the benefits and risks, as well as some things,''defects.

Risks

But pre-sale buying also involves great risks. It is very important to take all sorts of steps to minimize these risks:Do thorough research on the developer or agent. Make sure that building permits and approvals are in place, as well as appropriate certifications. Both you and the developer should have insurance to mitigate the risk of delay or failure to complete construction. Make sure that you do. Try to get a bank guarantee to cover your payments if the property is not delivered on time. Be sure to get legal advice on this as some banks may refuse to honor''guarantee if its wording is incorrect. Make sure the developer has actually registered the land with the Portuguese real estate registry. (This should go without saying, but it's best to be safe here.) If you plan to buy to rent out or to sell at a profit, do your research to make sure there is demand for this type of property in the right location.

Payments on presale

In terms of paying the property on a pre-sale, you will need to''Make a down payment and then pay a deposit of about 20% at the signing of the contract. The final payment will be made after the construction is completed.

Things to consider before making a decision

Research the builder

It's best to spend time researching the builder. Research their reputation - make sure they are trustworthy and familiarize yourself with their previous projects. It's also worth checking online reviews of the company to get the opinions of previous buyers. Social media can also be a good resource. However, remember that this is an open source of information. Projects can have certain problems in the beginning. Look for reviews from expats who have been through the process to get''the most accurate representation of a property developer's reputation.

What about bargaining?

In contrast to conventional properties, pre-sale properties are usually more open to negotiation, especially at the beginning of a project. Pre-sale developers are always in need of capital, so the more money you have, the better chance you have of getting a better price. For example, the developer may remove some fittings or cover your taxes for printing - yes, printing, which is also required in the UK, is also compulsory in Portugal. You're also more likely to get a deal if you're buying multiple properties from a developer. You could say that buying in large numbers will be cheaper. But if this is not your case and you are planning to use''Helping Brits save time and money when moving to Portugal. Contact us today to find out how we can help you build a successful currency exchange strategy.