A few facts upfront
- I chose to go by the 500k € real estate purchase route, i.e. directly purchase from a person instead of going through one of those developments targeting GV.
- I chose not to use an intermediary agency, i.e. one of the full-service firms that take you from A to Z.
I want to share some of the learnings and tools that I used. I hope other people on the forum might find them helpful.
On Getting NIF
This is the first thing I did and this requiresd no attorneys whatsoever. I used NIF Online – Número de Identificação Fiscal em Portugal – NIF Online. It was super straightforward and I got it in a week. There is an alternative https://bordr.io/ which I think many others in this group have used. Both are legitimate.
On Selecting Attorneys
In parallel with the NIF process, I was casting a net for attorneys. I set up outreach emails and conference calls to vet each that replied to me. Through this process, I’ve not only gotten an idea of the range of calibers of the attorneys, but also some “free” information from them regarding the GV process. This information reinforced and corroborated my learnings from various websites and forums.
Then I entered into fee negotiation stage with quite a few firms. My only principle on professional fees (other than getting a competitive overall quote) is: I pay for services rendered and milestones achieved. This will necessitate a payment schedule over the lifetime of this GV project. Some firms won’t work under this paradigm so they drop off the list. These are usually larger firms that are not flexible on their billing model.
Next, I entered into the contract negotiation stage with the select few left, mostly small to medium-sized firms. Two things are important to me:
- Fixed overall fee with a payment schedule — Installment size is proportional to the effort needed to achieve a milestone, e.g. opening a bank account is less effort than property conveyance and therefore dictates a smaller payment.
- Fixed overall fee with no surprise fees — I am amenable to additional costs due to unforeseen circumstances. However, they need to be quoted at a fixed cost that are approved by me before they are incurred.
In the end, I signed with a medium-sized firm with a reasonable overall fee that checks both of the boxes above. In addition, such a firm gives me direct access to partners. In contrast, had I gone with a large firm, I might have been assigned an associate.
On Finding Real Estates to Buy
All the while, I have been getting an idea of the Lisbon market on https://www.idealista.pt/ and https://casa.sapo.pt/. I’ve never been there so it was a bit of a learning curve in the beginning to get to know the neighborhoods. Youtube was quite helpful at this stage to help me visualize the neighborhood.
Once I had some bearing on what’s available out there and their locations, I began to form my own criteria for a shortlist:
- Only completed apartments — No “under construction” or “soon to come” properties. I am buying in a foreign country sight unseen so I’d like this to be a clear money-for-house-now deal.
- Used and/or Renovated > New — This is a personal preference. I’d like an apartment with a bit of a heritage. I like high ceilings, large windows with lots of light, and hardwood floor. I haven’t found new developments that check those boxes.
- Quiet and accessible neighborhood.
Then came the unavoidable part which was actually spending hours and hours on the sites to form a shortlist and reaching out to the seller/listing agent for drawings and information. There is no shortcut here so prepare to spend some 1 to 2 months on this.
During this process, I was quite delighted to find out a few things specific to the PT market that can work in the buyer’s favor:
- Properties stay on the market for months — that means you don’t need to rush to make a decision
- Asking prices are always higher than transacted prices — that means you can haggle
- Buy-side agent is unnecessary — there’s usually a listing agent, but sometimes, if you are lucky, you can stumble upon listings that are directly listed by the seller. Those are the best deals from a value perspective. You can save some 30k € for a no middleman transaction (b/c the commission comes out of the proceeds the seller gets which is your money ultimately).
In comparison, where I am in the US, the property market is red hot. Houses go off the market in days sold with 10% to 20% above asking price all paid in cash. Decision made under that circumstance might not be rational.
On Analysing Shortlisted Properties
Unlike in the US where you can get transacted price on each property easily through redfin or other data providers, you can’t do that on idealista or casa sapo. Without comparables, it’s almost impossible to justify and negotiate an offer price.
Through some research, I realized that you could actually buy data of varying degrees of aggregation from certain companies. They are:
- www.idealista.com/data/ — they sell you an inexpensive auto-generated report for a particular listing. For data that’s not present there, you will have to ask them for a quote on a customized research report. They quoted me 250 € per customized report.
- casa sapo has a similar product call “Property Valuation Tool” — it’s also auto-generated but I found no ways to order customized datasets.
- www.confidencialimobiliario.com — I found them through a GV news article that quoted their research and data. The service is a subscription where you buy certain data sets of a particular city, in my case, time series transaction data set in Lisbon. I ended up using them with an annual sub cost of 1,500 €. When I approached them, I hadn’t narrowed down on a single property yet so I figured this would give me the flexibility I needed going into the negotiation phase on multiple properties.
- www.casafari.com — I found out about this service during one of my offer negotiations b/c the listing agent countered my offer with data from them. At this point, I already had confidencialimobiliario so I didn’t bother to approach them. From the look of the report they countered with, the quality of the research and data looked really decent.
On Funding the Purchase
It’s a long post and I will pause here for now as I am currently in the conveyance process. It will be completed by next Friday at which point, I will write about due diligence on properties.
Thanks for reading and please share your experience with everyone.