When you have found your Portugal property and you are ready to make an offer, it is normal procedure that the buyer will make a realistic offer via the agent who showed him the property. As your agent PortugalProperty.com™ will proceed to negotiate a deal that you are happy with and to the satisfaction of the vendor. It is very important at this stage that both parties, you the buyer and the vendor understand what is included in the purchase, and what is not. It is then expected that the buyer lodges typically a €6000 Reservation deposit with his own lawyer as a proof of his intention to complete the purchase, and the Vendor will take the property out of the market.
Promissory Contract of Sale and Purchase (Contrato Promessa de Compra e Venda)
Usually within 14 of signing the “Reservation Form” both buyer and vendor enter in a promissory agreement identifying clearly the following:
The agreed price
Exactly who is the buyer and vendor
The date of exchange and of the completion of contract
What is included in the purchase, e.g. furniture, golf membership, etc, in the form of an attached inventory list
Any other terms and conditions
This type of contract is used in almost all transactions made in Portugal and is legally binding both parties. This contract will establish in detail all procedures by which the transaction will be effected and the conditions of sale, such as stage payments and the maximum term allowed for completion, and exactly who the buyers and vendors are. A deposit must be paid when signing this promissory contract of sale and purchase to the vendor, normally 30% of the total purchase price agreed less the reservation deposit. This contract can be signed personally by the parties or by the lawyers acting for them based on a power of attorney.
Public Deed (Escritura)
Upon completion, the Public Deed will be signed in front of a Portuguese Notary who will intern check all the documents in the purchase and ensures that the purchaser has paid the Purchase Tax (IMT). The Notary office will issue certified copies of the corresponding entry and this serves as official proof the transaction has been made lawful and at this stage the balance of the agreed purchase price is paid in full.
With the Public Deed and all the transaction completed, the buyer’s lawyer will then proceed to register the new owner of the property into the Land Registry (Registo Predial) and will give copy of registration to the new owner.
At this stage you are the owner of your Portuguese Property and it’s time to start living the Dream!