Buying agents (sometimes called buyer’s agents or a buyer’s advocate) aren’t traditionally that common in Portugal*, but it’s a service that’s growing in popularity. And, it’s easy to see why.
A lot of people want to buy property in Portugal, whether to live in or to invest in, but quickly realise that buying in Portugal can sometimes be complicado (a word you’ll hear a lot here). It’s not the actual purchasing of the property that’s difficult, but rather making sure that you’re buying a property that’s fairly priced and doesn’t have any legal or planning permission issues.
An example of a common issue might be that the sale only includes part of the property or that the swimming pool doesn’t have planning permission and it’ll need to be taken out. It’s also not uncommon for the property to have multiple owners (especially siblings), to have a long-term tennant, or sometimes to not technically be registered as a house.
That’s where a buyer’s agent comes in.
Unlike an estate agent (or realtor) who works on behalf of the needs of the seller, and typically earns 5% commission for doing so, a buyer’s agent works on behalf of the buyer.
Their job is to find the right property for you, to advise on potential problems (and opportunities), and basically to hold your hand through the buying process.
*While the term “buyer’s agent” isn’t that common in Portugal, and is perhaps more of an American term, the concept isn’t completely new. If you go to a realtor in Portugal and they don’t have something on their books that matches your needs, they’ll often look at properties other estate agents have to try and find something for you (splitting the commission with the seller). So, even though the term isn’t used that much, the practice of having someone act as an agent for the buyer is quite common in Portugal.
But, even though some estate agent’s act work on behalf of the buyer sometimes, there’s a lot to be said for choosing a company that has purposely established itself to work on the buyer’s behalf rather than an estate agent who just does it when he or she doesn’t have a suitable property on the books.
What a Buyer’s Agent Does
Even though some estate agents sometimes act like a buyer’s agent, there is a difference between someone who’s looking to sell you any property – and often the one that brings them the best commission – and someone who’s really looking to help you get the best possible property at the best possible price.
Every service is different, but a good buyer’s agent should do at least some of the following:
- Scout out potential properties based on your needs and wants (sometimes they can even find off-market properties that aren’t advertised on places like OLX and Idealista. They can also decode what certain Portuguese listings mean and whether they’re worth viewing).
- Correspond with estate agents and private sellers to set up a calendar of viewings based on your availability.
- Some agents will even view properties on your behalf and create videos or writeups for you.
- Assess the valuation of a property based on similar properties in the area.
- Advise on Golden Visa requirements if you’re investing in a property as a means to Portuguese citizenship.
- Accompany you to the viewings to make sure you’re asking the right questions.
- Suggest mortgage options or mortgage brokers (but they shouldn’t force you to only work with their partners).
- Advise on potential issues, especially legal and planning permission-related issues.
- Negotiate the price on your behalf.
- Handle all of this in Portuguese.
A really good agent will also help with the after sales service i.e. help you set up your utilities, home insurance, or other needs. They’ll also work with you to not only find a property that fits your needs, but also a part of Portugal that’s right for you.
Many buying agents are also expats themselves, and know what it’s like to buy a property in Portugal as a foreigner.
Can’t you buy a house without one?
Absolutely. Thousands of people purchase properties in Portugal every year, and most don’t use a buyer’s agent (although they may end up with an estate agent who takes on the role of one, as mentioned earlier).
And, judging by the ever-increasing expat population here in Portugal, it’s fair to say that most people are happy with their purchases.
There are two main models that buyer agents use: a commission-based model, which the seller’s agent pays them, and an up-front fee, which you pay them.
The commission model
The commission model is quite simple: the buying agent splits the (typically 5%) commission the selling agent (realtor/estate agent) would earn in return for bringing them a client.
From the perspective of the buyer, this doesn’t raise your costs at all as you would be paying that commission anyway. It also doesn’t cost you anything if you decide not to buy through the agent or have to back out for some reason (although some agents may ask for a refundable deposit to cover themselves against all the work they’ll put in).
The up-front payment model
Other agents or agencies charge a fixed price for their services. This is usually around €5k, so it raises the cost for the buyer, however, agents who use this model argue that they are more likely to get access to the whole of the market as some sellers may not want to split their commission.
While both models have their pros and cons, ultimately your main focus should be finding someone you feel comfortable working with.
You don’t need to use a buying agent to buy property in Portugal, and most people don’t, but it may be worth looking into — especially if you’ve never purchased property here before.