Buying Property in Portugal? Pitfalls Foreigners (Like Me) Often Fall Into

Being a foreigner in Portugal has been quite the transition. But while I had a rocky (and very anxiety inducing) start - nowadays, I'm so happy with the decision my husband and I made to buy property and move to Portugal that I can't imagine us living anywhere else in the foreseeable future.

We got lucky with regards to quite a lot of aspects of buying a property - and were terribly unlucky in others. Before we moved here, we hadn't realized there were so many quirks to buying property in Portugal that are massive pitfalls foreigners often fall into. And we did fall into a couple ourselves.

Things have worked out, however, and I'm here to share some of these pitfalls with you so you (ideally) don't have to fall into them yourself - sparing yourself a lot of stress, anxiety, and even hits to your finances that don't need to take place if you know better what to look out for. I'll start with the absolute worst offenders...

Pitfalls Foreigners Fall Into When Buying Property In Portugal

1. Scams Are Rampant.

This is a pretty heartbreaking one and luckily not one that I've personally seen happen to friends or family of ours - and not one that has happened to me thankfully.

But I have had a number of conversations with a load of different real estate agents and lawyers who all point out how bad property scams can be - the vast majority of them revolving around buying property in Lisbon.

The most common of these is taking advantage of potential investors who don't have time to physically go see and inspect a property firsthand, and trust that their real estate agents and lawyers will handle everything for them - a very fair assumption since that's what they're being paid to do.

Unfortunately, the way this scam goes, a large sum of money is put down on a property that was supposed to be an incredible, gorgeous, spacious apartment in the center of Lisbon, but it turns out to actually be some small parking lot that's nowhere near worth the money.

Again - I haven't personally had experience with this scam firsthand or through friends and family who have ended up falling into this trap. That being said, I've heard the story from so many countless real estate agents that I now believe it's a far more common scam than I would have anticipated it being. So buyer beware.

2. Assuming What You See Is What You Get

Even if you take the time to go to a property and have a peek around with your own two eyes - that doesn't mean what you see is necessarily what you get - not in Portugal.

You would assume, for instance, that everything on the property - including stunning renovations and construction where the size of rooms or even an entire second story - is completely and utterly "kosher" so to speak. After all, who would take the time to do such costly renovations that are so well done unless they were a-okay to do.

You'd be sadly mistaken, however, as I quite literally cannot guess the sheer number of illegal construction that has been done - to houses, apartments, and everything in between - unapproved by the council and without any permission even asked, let alone granted by officials.

You again might guess that if this is commonly done here - it should be no problem to have done. However, again, you'd be mistaken because a lot of foreigners sadly don't realize that many times these illegal constructions are actually forced to be taken down.

What you see, therefore, is not always what you get - especially in cases where what you get is not only less than what you paid for, but a legal headache and tonnes of work to completely undo the construction that had you fall in love with the property to begin with. What a nightmare situation and sadly not uncommon.

There are plenty of other issues where assuming what you see is what you get is a massive issue - like buying a property in a rural area where your literal driveway to get on your own personal property is owned by the neighbour and not you. So if they want to build a fence, or a wall, on their property, you're quite literally not able to have access to your own property anymore.

These massive issues cannot possibly be something a foreigner would think to look out for, or know how to discover without previously having known they could be an issue, or having the right guidance from a good real estate agent to help them out.

But yes, illegal construction and not having ownership of the access route to your own personal property are both such common issues with buying property in Portugal that I've had friends and family experience both already, and these problems are very likely to crop up again and again over time.

3. Overpaying for Properties

Negotiating prices down is something that foreigners don't often do when they buy Portuguese properties. And yes, most believe that listing prices are often incredibly inflated, even for homes in the most tip-top ready-to-move in shape.

There's even more of an issue of overpaying for properties in cases where what you see is not what you get.

If there's a property that you fall in love with that needs serious repairs and renovations, or even falls under the category of having illegal construction done to the property as I discussed before - but that doesn't deter you from wanting to buy the property - you should absolutely be negotiating down the price of the property.

And yes, Portuguese sellers both understand and accept these as reasonable explanations for why the price should be lower than it is.

I've explained in my article on why you shouldn't go with just any real estate agent in Portugal, but basically when you are buying a property with illegal construction you're likely to encounter massive problems if you ever try to sell that property.

Because while there would be no issue if you were buying a property with cash, if someone needs to apply for a mortgage to buy your property, they will not be given a single dime for the parts of the property that are illegally constructed. Second floor not legal? Your potential buyer down the line will only be given enough to offer you for the first floor of the house.

Again, even if you fall in love with the property and don't mind the risk that you'll have to take down an entire floor of a house - this should be factored in when you're negotiating buying the property in the first place. Don't overpay for an investment that could be worth half of what you paid for it.

4. Buying a Property in the Wrong Location

While it's easy for someone who lives in Portugal to see which properties are in ideal locations, this is not such an easy thing for someone with no experience of life in Portugal to do.

The Algarve, for example, is a wonderful area that not only foreigners, but masses of Portuguese residents will flock to during summer months.

The problem with buying property here? It's not ideal as a primary residence - which all of the Portuguese know. It's the perfect holiday and summer vacation home location, but there are not enough amenities - hospitals, schools, grocery stores - to make living here year-round ideal.

And during off-peak seasons, the Algarve becomes almost a ghost town for this reason.

It's one of those situations where you don't realize what you've got until it's gone. And believe you me, those who buy primary residences in the Algarve thinking they are going to be happy to live there year round often regret their decision, not realizing how difficult life can be without everything you need being close enough to you.

5. Using a Law Firm Instead of a Real Estate Agent to Buy a Property

Using a law firm instead of a real estate agent to buy your property was a massive pitfall my husband and I fell into when we made our move to Portugal.

I won't get into the nitty gritty of the situation, but to cut things short let me emphasize - it was a living nightmare and a mistake I will never, ever be repeating. One that I will encourage everyone I know to avoid, especially since it's such an easy thing to avoid doing - if you know to avoid it in the first place.

You need not only a real estate agent, but a good one at that, and it absolutely is a mistake to not even use a real estate agent in the first place. But let me get into some of the ways having a bad real estate agent is also a massive pitfall you can fall into...

6. Not Even Being Able to See Ideal Properties Because of Real Estate Agents

Complacency is a massive problem amongst real estate agents - both agents of sellers and agents of buyers - in Portugal.

I cannot emphasize this enough. It's so incredibly hard to even get a showing booked so you can see a property because of how hard it is to get listing agents to pick up the phone.

Some real estate agencies outright will not even work with other real estate agencies as well - which is a huge problem for you as a buyer because (obviously) you have the right to see literally every property you can that may be your ideal fit.

Many bad real estate agents won't bother to show you properties if the commission they get on the property isn't high enough as well - it's a massive problem and you may not even realize it's happening to you because bad real estate agents will likely just say that that property is no longer available when it is.

7. Assuming Any Real Estate Agent Is Fine

All this to say, assuming any real estate agent is fine is a massive pitfall that foreigners will fall into when trying to buy property in Portugal. And some do not even realize when it's happened to them.

Unfortunately, you can't even walk into a very good real estate agency and use one of their real estate agents and expect to have a good experience.

RE/MAX, for example, exists in Portugal, and I have nothing against RE/MAX, but realistically, not every real estate agent who works there is good and not every one is bad. It quite literally depends on the agent, rather than the agency.

You could end up with an agent who is complacent and not proactive, missing out on a slew of great properties. One who will not look into the issues of illegal additions and construction, or will not tell you if they do notice they exist, or will even try to convince you that it's fine and that's just how things are done in Portugal, without making you aware that some of these illegal constructions quite literally will be forced to be taken down. It's a nightmare.

But sadly, the only way to avoid ending up with a bad real estate agent is by knowing someone who has worked with a real estate agent before and found them to be quite good. And if you're a foreigner - well you're usually out of luck because how likely is it that you already know someone in Portugal you can get a reference from? Fairly unlikely.

Personally, I have a love-hate relationship with this about Portugal because it's not just true about real estate agents - it's true about nearly everything, from banking to law firms, to construction workers and renovators - the list goes on.

Basically those who are excellent at their job don't need to advertise, they get their clients through word of mouth, and so unless you have a network of friends and family you can ask for recommendations from, you will never find these wonderful people.

But these wonderful people are also a godsend and incredible at what they do in comparison to the baseline, so when you finally work with them it's a breath of fresh air.

Having my own personal horror stories makes me want to help other expats - prevent them from dealing with the hellish nightmare scenarios we encountered when we moved here.

My husband and I helped so many friends and family members move to Portugal after us, and we're just so happy when they have positive experiences because we know how bad things can be from firsthand experience of our own.

In any case, if you fall into the camp of not having any - or many - resources in Portugal. Of not having many friends or family members that you can go to for help finding the right people, or just have questions - anything that pops into mind, please don't hesitate to contact me to ask, which you can do here - because I'm very willing and happy to do my part in making sure that these terrible pitfalls are avoided as often as possible.

I love Portugal so much more now than I ever imagined I would, and those early months taught me so much about how to make the transition infinitely easier for my friends and family who have moved here. So glad to have these individuals around me, and to have spared them the bad experiences my husband and I personally had along the way.