How to Save Money When Buying Property in Brazil

It’s becoming well known that property in Brazil is affordable and attractive and that depending on where you buy you can bag yourself a property in a place where the sun is nearly always shining, where you can access your real estate from overseas quite easily and where you can target a growing tourism base if you want to buy to let in Brazil.

So, if you’re quietly contemplating an investment into property abroad in a location where you can comfortably afford to buy and where your rights as an investor are well protected and Brazil is therefore of appeal to you, you’ll be interested in our top tips relating to how to save money when buying property in Brazil…

The first thing to know is that you can negotiate on an asking price for property – in fact you can negotiate on any price in Brazil but when it comes to property in Brazil no one apart from the naïve foreign buyer pays the asking price.  It’s been said of Belize that the second home you buy is half the price and twice as nice because you quickly learn the ways of the country after having lived there a while – well, in Brazil it needn’t be like that, you can save from the outset.

Set yourself a budget, look around your chosen destination for typical property prices and get a feel for what you’d be comfortable paying for a given piece of property and then start negotiations from between 30 and 50% down on the asking price depending on how bold you’re feeling, and don’t give in until you’re satisfied you’re getting a decent price for a decent property.

The next thing you can do to save yourself money is either drop estate agents out of the loop or haggle their commission.  If you’re confident you can find sufficient property stock to view by yourself – and in the most popular locations with foreign buyers in Brazil it is not difficult - you can drop an agent right out of the equation and just use your lawyer to help you make your final decisions. 

If on the other hand you’re not 100% confident with your property finding techniques or you’re not actually in Brazil, or not in the country long enough to do much more than fit in a few intensive days of viewing you’ll need to haggle with an agent.

If you can prove to an agent that you’re a serious buyer and that if they help you find specifically what you want and only charge you either a fixed fee on a low percentage (under 3%) then you will commit to them and they will make a commission from you, you will most likely secure the services of a committed agent because they have less to lose from assisting you (in the form of a lower commission) and more to gain (in the form of an almost guaranteed sale)…target both their logic and their pocket!

Next you can do a lot of the initial legal leg work yourself and save yourself some solicitor’s fees – note, we do not ever advocate that you enter into a property transaction without engaging the services of an independent solicitor – however, if you do at least some of the basic legal leg work you will be saving yourself time, you will be saving your solicitor time and you can point this out when it comes to negotiating their fees!

In terms of what you can do, assuming you’ve found a property in Brazil that suits your requirements you can apply to the local Real Property Registry or Cartório de Registro de Imóveis for a copy of the property’s Matrícula - this is like your property’s passport, it details everything to do with that property since it was constructed and it shows who’s the legal owner, any construction changes that have taken place on the property, ownership transfer information etc.  The cost of obtaining this document is very cheap and yet the document in question is priceless. 

With the Matrícula you can ensure the vendor is the legal owner and that any changes you can see to the property have been properly registered and signed off and you can also check what the local tax rate is for the property.  What’s more, you can take the IPTU or Imposto Predial e Territorial Urbano registration number from the document and further check that the property is debt free.

IPTU is the real estate property tax payable and with the property’s registration number you can go to the local tax administration office or Prefeitura and ensure that there are no obvious debts or liens against the property and that all Condomínio fees have been paid – these are fees payable by apartment dwellers for the upkeep of common areas for example.  If you come across anything suspicious in your hunt for information flag it up with the vendor for clarification and use it as a negotiating point on price.  If in serious doubt about a point raise it with your lawyer or walk away from the property in question.

Finally, you can try haggling with your solicitor!  This can be easier said than done because solicitors are never really short of customers and so feel they have no need to negotiate – but rather than approaching the situation from a confrontational point of view, explain that you are an investor, that you know other investors, that you will promote their services to others whenever you can, that you have done a lot of the basic legal legwork for them and that if they offer you a good price you will put any subsequent business though their practice as well – just remember, if you don’t ask, you don’t get!

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