The first step to be taken by those who want to acquire real estate in Brazil is to hire a realtor for consulting services. This will prevent any problems such as frauds, purchases of real estate that is either nonexistent or unavailable for purchasing. You should try to hire a realtor in the same region where you wish to acquire or rent a real estate. The internet can also help. There are many real estate business portals in Brazil today, one of which is Marisia Real Estate (www.marisia.com.br).
After defining the objective and location of the real estate, visit the units selected by the realtor. Negotiate price and payment conditions previously. Usually, discounts are given when all the money is paid up front. The price of real estate is determined by the cost of the square meter x the size of the property. The real estate sections in the Sunday classifieds of all major Brazilian newspapers have valuable information that can be used as reference for comparative analyses. There is difference between terrain value and built square meter value.
If there is not enough money available to cover the total value of the real estate, look for alternatives in financial institutions or negotiate directly with the building company. The main real estate financing agency in Brazil is Caixa Econômica Federal (www.caixa.gov.br). This is a government-owned bank. Private institutions, such as Bradesco, Santander, ABN-Amro Real, Itaú, HSBC, Bank Boston, among others, also provide real estate credit lines. Not all offering financing to those who live abroad. It is a good idea to conduct some comparative research because there is much variation in loan conditions. Real estate consortiums are also a good alternative.
After you have made your choice, check the legal situation of the real estate in question. At this stage, the services of realtors and real estate agencies, experts in the area, are of invaluable importance in making sure that all legal aspects of the transaction are in order. It must be checked whether the real estate has been built legally and whether the specifications were approved by the city hall, if there is no imminent land dispossession in the area where the real estate is located, if the owner-seller has been appropriately registered etc. The contract also requires attention. You must be certain about the owner´s qualifications, as well as have a detailed description of the real estate, a declaration stating that there are no third-party or government debts (taxes, fees, tariffs, etc.), and the intermediate installments regime, among others.
If there are no legal restrictions, the purchase and sale agreement must be guaranteed through the payment of a portion of the total price. This is called the “sinal” (earnest money). At this stage, usually the owner-seller requires an advance payment of between 10% and 25% of the total price. The receipt you get from this initial payment is a type of pre-contract, which sets forth the conditions necessary for the transaction to become effective, through a definitive purchase and sale contract, the remainder of the payment and the foreseen situations where the earnest money should be returned, in case the deal is not ultimately closed. The purchasing party may also check for a fine clause to be included, in case the seller backs out of the sale. It is customary to pay for real estate in Brazilian currency, in cash or by wire transfer.
If the real estate is sold based on its specifications alone, before construction is even started, it is important to investigate the legal status of the building company, as well as approval papers issued by the appropriate agencies or institutions (city hall, regional engineering and architecture council, environmental secretariat). The realtor can supply this information to the client.
After these measures have been taken, the next step is signing a “purchase and sale commitment contract” setting forth the price and sales and construction conditions, as well as a deadline for delivering the real estate unit, whenever that may be the case. Usually, this contract is signed in up to two weeks after the offer has been accepted and information about the real estate has been checked (i.e., no debts or legal problems exist). At this point, this definitive purchase contract overrides the receipt that was given when the earnest money was paid. The contract itself is now proof of all the payments made so far.
The deal will become official when all tariffs and taxes have been paid, the purchase and sale indentures with the name of the new owner signed and submitted to the Real Estate Registry Notary´s Office. Even if payment is only to be fully made in the future, the sale indenture can and should be registered at the end of negotiations. It is important to point out that just signing the indenture does not conclude business; it must be submitted to registration at the Real Estate Registration Notary´s office that has jurisdiction over that area. All matters pertaining to registration are usually conducted by the notary´s office itself, by writing out the indenture with the name of the owner, upon payment of all applicable expenses and fees.
All this information –gathering and the investigative work is very important for a deal to be closed successfully, but the work of the realtor or the real estate agency does not end when the contract is signed. The realtor must also, whenever possible or requested by the buyer, follow-up on the delivery of the real estate, to assist in verifying that everything outlined in the purchase and sales contract has been dully followed.
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