Quick guide with 5 steps to buy a house

Here is a practical guide, divided into five crucial steps, to help you make informed decisions and finalize the purchase of your new home with greater security.

First Step: A Solid Financial Foundation

Before starting the active search, it is essential to carry out a rigorous financial assessment. This is the foundation for the entire process.

• Personal Financial Diagnosis: Analyze your monthly income and fixed expenses in detail. This analysis will allow you to determine the effort rate you can afford for a housing loan installment, without compromising your financial stability.
• Equity and Additional Expenses: Consider that credit institutions generally finance up to 90% of the purchase value or appraisal of the property (the lower of the two). Therefore, you will need equity for the down payment (at least 10%), plus amounts to cover taxes (IMT and Stamp Duty), notarial and registration fees.
• Pre-Approval of Credit: Contact different banks to obtain simulations and a pre-approval letter of credit. This document will indicate the maximum amount that the bank is willing to finance, offering a clear guidance on the price range of properties to look for and strengthening your negotiating position with sellers. If this consultation is not favorable, try another bank.

Second Step: Define Criteria and Explore the Market

With a clear perspective of your financial capacity, it is time to define your needs and start the search for properties.

• Definition of Priorities: Make a list of the essential characteristics of the property you are looking for: new or used, typology (number of bedrooms), preference for apartment or house, location (proximity to work, schools, services, transportation), and other important amenities (garage, elevator, outdoor space, etc.).
• Market Research: Use online real estate portals, consult real estate agencies, and explore the geographical areas of your interest. Visiting different types of properties will help you form a concrete idea of the options available within your budget.
• Professional Support (Optional): Considering the use of a real estate consultant can be advantageous. An experienced professional can assist you in selecting properties that match your criteria, scheduling visits, and providing market advice. Prefer a consultant with proven track record and experience in your preferred area.

Third Step: Visit and Evaluate Carefully

This phase is dedicated to getting to know the pre-selected properties and identifying the one that best meets your expectations and needs.

• Thorough Analysis during Visits: During visits, carefully observe the overall conservation status of the property, the quality of materials and finishes, the solar orientation, and the functionality of the spaces. Inquire about any remodeling works carried out or necessary, the financial situation of the condominium, etc. If possible, visit the property at different times of the day.
• Document Verification: Before making any decision, request and analyze the fundamental documentation of the property, namely the Urban Property Register (CPU), the Permanent Certificate of Property Registration, and the Energy Certificate. These documents contain crucial information about the legal, fiscal, and energy situation of the property.
• Considered Decision: The acquisition of a property is a significant investment. Visit several options and carefully compare them before making a final decision.

Fourth Step: The Proposal, Negotiation, and the Promissory Contract

After identifying the ideal property, the formalization of your interest and the negotiation of the conditions follow.

• Presentation of the Acquisition Proposal: Based on your evaluation of the property, market conditions, and financial capacity, present a written purchase proposal to the seller (letter or email). This proposal should include the offered amount and may include other relevant conditions.
• Negotiation Process: Be prepared for a possible negotiation process of the price and other terms of the transaction with the seller or their legal representative. Trying a proposal 5% below the asking price is a first step to start the negotiation process.
• Celebration of the Promissory Contract of Purchase and Sale (CPCV): Once an agreement is reached, it is common practice to celebrate a CPCV, although you can go directly to the deed if you have your own capital. This document legally binds the buyer and seller, establishing the agreed terms for the transaction, the final price, the amount of the deposit (usually between 10% and 20% of the purchase price), and the deadline for the formalization of the public deed. I highly recommend that this contract be drafted or reviewed by a legal professional (notary, solicitor, or lawyer).

Fifth Step: Final Financing, Deed, and Registration

The completion of the purchase approaches with the final procedures.

• Final Approval of the Housing Credit: With the CPCV signed, the bank will proceed to the formal evaluation of the property and the final analysis of your credit process for final approval.
• Organization of Documentation: Make sure that all necessary documentation, both yours and the seller's, is organized for the signing of the deed (ensure you have valid and original documents, copies are not usually accepted).
• Granting of the Public Deed: The public deed of purchase and sale is the formal act that transfers the property of the property to your name. It is done before a Notary, at a Casa Pronta counter, or by a Lawyer/Solicitor with the necessary competencies. At this moment, the remaining value of the property is paid and the due taxes are settled (IMT and Stamp Duty on the transaction and, if applicable, on the loan).
• Registration of the Acquisition: After the deed, it is essential to proceed with the registration of the acquisition at the competent Land Registry Office. This act gives public visibility to your property rights, making it enforceable against third parties. If you used financing, the bank will also proceed with the registration of the mortgage.

The process of buying a house, although requiring dedication and planning, becomes simpler when you know its fundamental stages. I hope this guide helps you navigate this journey with more confidence and achieve your goal of acquiring your new home.

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