Selling property in Portugal “often confusing” says US broker

Portugal is one of the top 8 counties in Europe for foreigners to move to for all the various reasons that are well known: good climate, excellent food and wine, a safe environment with a low crime rate, a stable political system and value for money.

In fact, the amount of US visitors for business or holidays in Portugal increased 10-fold in a decade by 2019 to a staggering 624,000 according to figures from the immigration and borders agency SEF, while the US Embassy in Lisbon estimates there are around 20,000 US citizens living and working in the country.
On arrival, US citizens initially rent, but the time comes when they start looking around for a property to buy. There are many questions: where to buy, what are the current trends, the prices, the recommendations, tax benefits, location (in the city, town or country), what international schools and health care offer exists, is there a golf course nearby? The questions are myriad.
A group of real estate experts used to dealing with overseas clients addressed many of these questions at the webinar ‘The Residential Housing Market in Portugal in a Post-Covid-19 World – trends and demand’ which was organised lat week by the American Club of Lisbon (ACL) and Essential Business, with the aim of addressing some of the questions, needs and concerns that US citizens in particular have when they have either moved to Portugal and are deciding to buy, or are thinking of moving to Portugal to live.
In the first in a short series of articles based on the webinar, Essential Business discusses the Portuguese Property Market from the points of view of these different real estate experts. Today we start with Anne Atalla of the Brightman Group.
The US luxury real estate consultant who divides her time between Texas and Greater Lisbon highlights the main difference between Portugal and the US regarding the overseas client real estate market.

An immature market

Anne Atalla says that the US the market is mature, with 60 years of experience, whereas Portugal only got started 15 years ago and is still young.
For Anne, the Nº1 difference is that there is no MLS (Multiple Listing Service) system in Portugal. MLS is a giant data base that provides data about properties for sale and records on the selling price of all properties and gives estate agents an idea of what the property is likely to sell for in a given location, based on the prices gained for similar properties in that area, and the selling history of the property in the past.
An MLS allows brokers to see one another’s listings, with the goal of connecting homebuyers to sellers. The listings are all exclusive and the contracts are standard. However, Anne notes that the listings in Portugal are “rarely exclusive” creating “a lot of confusion and a lack of service” on the agent’s side because the likelihood of closing is much more remote and the competition for these listings is fierce.
“There is very little transparency on selling prices that non-exclusive contracts create, instead there are multiple listings of the same property, and very often huge gaps between asking and selling prices,” she says.
Anne Atalla explains that in Portugal there is generally a 5% fee on residential sales, with the commission split at 2.5% on the buyer side, and 2.5% on the seller’s side. Often, however, there is a third party involved (the doorman or gardener or friend) who is given a chunk of the commission for having done nothing but passed on a name.
“In Portugal, technically, you are not really supposed to represent the buyer and the seller, but this frequently happens. The emphasis will always be on finding the buyer, and closing the deals. Therefore, the seller needs to make sure he is being properly represented when the situation occurs,” says the US realtor.
Then, there are property taxes in Portugal charged on sale. Whereas in the United States there is no sale tax in most states. In Portugal the IMT tax can vary between 3-8% IMT on sale that the buyer has to pay, plus a stamp duty tax.
Another factor which Anne Atalla believes skewers the market, is that an agent needs no license other than the umbrella license from the brokerage house to sell real estate. The agent also often doesn’t have formal training and works part-time.
Some upmarket estate agents in Portugal, however, such as Fine & Country, an international franchise which operates in Lisbon, Cascais and Estoril, as well as in the Algarve, insist that their agents are all qualified and puts them through a plethora of training courses. Its team comprises professionally qualified, multi-lingual specialists in the promotion, marketing and sale of luxury properties.

Lack of transparency

But many more don’t, Anne says, noting, “This frequently leads to wrong pricing, mis-representation of product making the sale process very confusing,” said the Texas-Portugal based broker.
“These were the differences I saw as an American moving into this market and I found it extremely confusing at first,” she continues.
Culturally, Anne Atalla finds that often the Portuguese don’t want to reveal they are selling their properties, so this makes things difficult on the real estate broker’s side to market the property.
On the positive side, being an American helped Anne Atalla gain the confidence of clients and professionals, because right or wrong, “I’ve found that Americans have a really good reputation for knowing what they are doing in real estate” and this has catapulted her company, leading to tremendously fast growth, opening up opportunities that she says the Brightman Group might not have had in other markets.

ABOUT ANNE ATALLA

Anne says that one of the greatest things about being a real estate broker is the satisfaction she gets from seeing her client, be they an investor or first time home owner, walk away from a closing with a glow that tells her “I did a great job”.
A Texan living in Portugal, with experience in the Real Estate markets of Europe, Brasil, and USA, client Relationships are the core of her business at the Brightman Group and she abides by the premise that long term goals and success are achieved through client satisfaction. “I’m an experienced negotiator and firmly believe that every sale should be a win-win for all parties”.
One of Anne’s core beliefs is that strength lies in strategic partnerships. “Our partners are key to our success”. You will find more about them in our Partners at https://www.brightmangroup.com
Anne is an active member of The American Club of Lisbon and The Rotary Club. She started the Real Estate MeetUp group in Cascais that is open to anyone interested in Real Estate, be it investing, buying or just curious about what’s happening in the market.

Interesting facts about Anne

Active investor in Portugal, USA and Brasil Markets
Chosen as HGTV’s Home Hunter Realtor programme for Portugal
Owned and operated Pano Ltd. – a design store in the heart of Sao Paulo’s designer district
Studied Fashion Design at the University of Texas and worked as an Image Consultant.