Real Estate Agency

Definition and History

A real estate agency is a company whose main activity is real estate mediation, that is, it deals with the purchase, sale, rental and management of properties.

Real estate agencies can have different sizes, from small local companies to large international real estate franchise networks, as is the case with Keller Williams (the company I work for, represented by KW Portugal), and in this real estate agency the name real estate agency evolves for the Market Center designation.

Origin of Real Estate Agencies

Real estate agencies, as we know them today, are the result of a natural evolution of the property market. Historically, real estate mediation began informally, where land and property owners negotiated directly with potential buyers or tenants.

With increasing urbanization and the increase in the complexity of real estate markets, the need for specialized intermediaries has arisen, capable of facilitating these transactions, commonly known as real estate agents. This growth was driven by a number of factors, including the increase in the urban population, the increase in disposable income and the evolution of laws and regulations related to the real estate market.

The first real estate agencies were founded in Europe in the 17th century and in the United States in the 19th century, especially in expanding urban areas, offering specialized property buying, selling and leasing services.

Evolution in the Portuguese Market

In Portugal, the history of real estate agencies follows European and global trends, although with its own particularities. Real estate activity gained momentum from the second half of the 20th century, especially after April 25, 1974, which brought economic opening and greater social mobility. This period was marked by an increase in housing construction and the development of the real estate market.

Portuguese real estate agencies started out as mostly family and local businesses, gradually expanding into more comprehensive networks. Portugal's entry into the European Union in 1986 brought a new dynamic to the sector, with an increase in foreign investment and the arrival of large international real estate networks.

Tasks of a Real Estate Agency

A real estate agency plays a crucial role in the property market. With a professional and detailed approach, these entities facilitate real estate transactions in an efficient and transparent manner. Let's explore the main functions of a real estate agency.

Buy and selling of properties

Buying and selling properties constitute the essence of a real estate agency's activity. These entities act as intermediaries between sellers and buyers, providing a bridge of trust and professionalism. The agency helps with evaluating the property, preparing all necessary documentation and promoting the property, using advertising, digital and traditional marketing tools as well as specific events such as "Open House" or "Open Day". Real estate agencies negotiate the terms of a real estate transaction, including the price, payment terms and other terms.

For buyers, they offer a selection of properties that suit their needs and budget, as well as assistance throughout the purchasing process.

Property Rental

Another important function of real estate agencies is the leasing of properties. This task involves finding suitable tenants for landlords and helping potential tenants find their ideal home. Agencies handle all legal and contractual aspects, ensuring that both owners and tenants are protected and satisfied. In addition, they often manage the property during the lease period, dealing with issues such as maintenance and rent collection.

Real Estate Consulting and Valuation

A real estate agency also offers real estate consultancy and valuation services. These services are crucial for both sellers and buyers, as they allow them to determine the fair value of a property in the current market. Assessments are carried out by qualified professionals, who consider several factors such as location, the condition of the property, market trends, among others. The consultancy can also cover advice on real estate investments, property planning and market strategies.

Administration Services

Real estate agencies can provide management services to property owners, including rent collection, property maintenance and tenant management.

Organizational structure

A real estate agency in Portugal, just like anywhere else, has an organizational structure that is vital for its efficient functioning. This structure may vary depending on the size and scope of the agency, whether it is a small local company or part of a large international network.

Management and Administration

At the top of the hierarchy, we find management and administration. Here, strategic decisions are made, directing the agency towards meeting its commercial and financial objectives. In Portugal, many real estate agencies are led by managers with extensive experience in the sector, who combine local knowledge with modern management practices. Management is responsible not only for defining the company's overall strategy, but also for overseeing day-to-day operations.

Team of Consultants

The team of real estate consultants is the heart of any real estate agency. These professionals are on the front line, dealing directly with customers and facilitating all phases of the process of buying, selling or renting properties. In Portugal, the training and qualifications of consultants are taken very seriously. Many of these professionals have specific training in areas such as negotiation, real estate valuation and knowledge of the local market.

Support Departments

In addition to management and consultants, there are several support departments that perform crucial functions. These include, for example, the marketing department, responsible for promoting the agency's properties and branding, the legal department, which ensures compliance with real estate laws and regulations, and the finance department, which manages transactions, payments and other financial matters.The presence of these departments ensures that the agency operates effectively and efficiently, providing a quality service to its clients.

Types of real estate agencies

In the dynamic real estate sector, real estate agencies come in various forms, each adapted to specific needs and markets. In Portugal, this diversity is very clear, reflecting the complexity and richness of the national real estate market.

General Real Estate Agencies

General real estate agencies are the most common in Portugal. These agencies deal with a wide range of properties, offering solutions both for those looking for a house to live in, as well as for those who want to invest in commercial properties or buy land. Flexibility is the keyword for these agencies, which adapt to the diverse needs of clients, offering a comprehensive service that ranges from market research to closing the deal. Their ability to handle a variety of properties makes them a popular choice for a wide range of clients.

Specialized Real Estate Agencies

Specialized real estate agencies focus on a specific niche in the market. In Portugal, this type of agency has gained popularity, especially in segments such as luxury residences, vacation properties, or commercial properties. These agencies offer in-depth knowledge and specialized experience, which is particularly valuable for clients with very specific needs. For example, an agency specializing in luxury residences knows intimately the particularities and requirements of this market segment, from the most prestigious location to the design and construction details that define a high-end property.

Online Real Estate Agencies

Digitalization has transformed many industries, and real estate is no exception. Online real estate agencies represent this evolution, operating mainly via the Internet. These agencies offer the convenience of being able to explore and compare properties online, streamlining the property search and acquisition process.In Portugal, the demand for online agencies has increased, especially among a younger and more technologically skilled audience. These agencies stand out for their efficiency, ease of access to information and their ability to reach a wider audience, overcoming geographical barriers.

Local Agencies

Local agencies are often characterized by their proximity and in-depth knowledge of the local real estate market. In Portugal, these agencies stand out for the personalization of their service, offering a unique experience adapted to the particularities of each region. Its team, usually made up of local professionals, provides a more personalized service, valuing close and trusting relationships with customers.

National Networks

National real estate agency networks represent a significant segment of the Portuguese market. With offices spread across the country, these agencies offer a wide range of services, benefiting from greater marketing capacity and a wide network of contacts. Their approach is often more standardized, but effective in covering a wider market, allowing clients to access a wider range of real estate options.

International Franchises

International franchises brought a global dimension to Portugal, connecting the Portuguese real estate market to the rest of the world. These agencies are recognized for their strong brand and international resources, offering specialized services such as consultancy for foreign investors and luxury properties. Its presence in Portugal reflects the growing internationalization of the real estate market, attracting investors from different parts of the world.

Legislation and Regulation

The real estate market is regulated by a series of laws and regulations. These laws and regulations aim to protect consumers and ensure transparency and fairness in the real estate market.

Licensing and Registration

In Portugal, all real estate agencies need a valid license to carry out their activity. This licensing is issued by the Construction and Real Estate Institute (InCI), currently integrated into the Insurance and Pension Funds Supervision Authority (ASF). To obtain licensing, the agency must meet a series of requirements, such as proving the suitability of its managers and taking out professional civil liability insurance. After obtaining licensing, the agency is registered with the Real Estate Mediation and Construction Services System, subject to periodic supervision and inspection.

Professional Standards and Ethics

The exercise of real estate mediation activities is also subject to standards of ethics and professional conduct. These standards are established by sector associations, such as the Association of Real Estate Professionals and Companies of Portugal (APEMIP).APEMIP, in addition to representing the interests of professionals, ensures the promotion of good practices, continuous training and compliance with the rules of professional conduct. These rules include the obligation to provide true and complete information to customers, the prohibition of discriminatory practices and the guarantee of confidentiality and protection of personal data.

Recent Legislative Challenges and Adaptations

The real estate sector in Portugal has faced several challenges, especially with the growth of the online market and the globalization of real estate services. This has led to adaptations to existing legislation, aiming to accommodate new forms of mediation and ensure consumer protection in an increasingly digitalized market. New regulations on online advertising, digital intermediation and personal data protection have been implemented, reflecting the constant evolution of the sector.

Future Trends and Challenges

In the dynamic Portuguese real estate market, real estate agencies are constantly facing new challenges and trends. These developments are driven by several factors, such as technology, changes in living standards and the demands of the global market.

Digitization of the Sector

Digitalization has been a driving force in the transformation of real estate agencies in Portugal. With the increasing use of online platforms, digital presence has become not just a complement, but a necessity for survival and growth in this sector. This includes everything from listing properties on websites to using virtual reality for remote viewings, allowing potential clients to explore properties without leaving home. Additionally, social media and digital marketing campaigns have become essential tools for reaching a wider audience.

Sustainability and Social Responsibility

Sustainability is another topic that has gained prominence.Increasingly, Portuguese real estate agencies are aware of their role in promoting sustainable practices, both in construction and property management. This involves choosing ecological materials, energy efficiency and projects that respect the environment. At the same time, corporate social responsibility is gaining ground, with agencies getting involved in community projects and social support initiatives, strengthening their image and relationship with the community.

International Market and Mobility

The Portuguese real estate market has attracted growing international interest, driven by programs such as the Golden Visa and the tax regime for non-habitual residents, which, although they have been the target of political decisions with a view to their end, have not yet completely disappeared.

This phenomenon presents real estate agencies with the challenge of adapting their services to a diverse, multilingual clientele with different cultural expectations. Mobility, both internal and external, is also redefining the market, with trends such as teleworking influencing demand for housing in areas that were previously less sought after.