10 things to watch out for when buying a home in Brazil
Below I have listed the top 10 things to do or watch out for when you are considering buying a home in Brazil.
1. Be careful with contracts
Reviewing the specific terms within a real estate sales contract is a vital precaution, specially in Brazil. Frequently, sellers attempt to enforce contracts that impose ridiculous fees and rates on the buyer. Also, in these contracts, there may be stipulations that exempt the seller from any liability once the sale is completed.
Because of these risks, I advise most people to have the contract checked by a real estate lawyer (if you want my recommendation for a real estate lawyer contact me here).
2. Be mindful of the specifics about the property
In general, when you buy a property (especially when you buying a house, instead of land to develop yourself) there are not too many specifics concerning the property itself to be careful about.
Having said that there are some special considerations, under some special circumstances, that you should consider in a real estate transaction.
Restrictions may apply if the property is located directly in front of the beach. Other forms of obligations, such as a tax known as “Laudemio” or “Taxa de Marinha,” must then be checked. This is especially the case if you want to build or modify a beachfront property.
Large rural properties:
If the property you intend to buy is a very large rural property, restrictions to foreigners may apply. In each city, the percentage of foreign-owned properties is limited. You may need to seek permission from the Agriculture Ministry, depending on the size of your property.
Building and/or substantially changing the previously built house:
If you want to significantly alter your home, some construction restrictions may apply. These are restrictions to do with electricity transmission lines, specific projects, or neighbouring waterways, number of floors allowed, for example. Even in metropolitan regions, environmental rules might limit the scope of building opportunities.
Luckily if you intend to buy one of the houses listed in Cheap Homes Brazil I would be too much concerned about any of these things since for the great majority of the properties listed here none of these considerations will be relevant.
3. Consider ongoing expenses when buying a house
It’s easy to believe that once you’ve purchased a home, your expenses would be zero because you won’t be paying monthly rent.
Yet, this is not the case and, in fact, some costs must be considered and budgeted for:
Of course, when you’re staying in the house, you’ll need to pay utilities.
On average cost for utilities for one to two persons is just under $500 reais ($100 dollars) per month.
Basic utilities (electricity, water, gas) will cost $300 to $400 reais ($55 to $60 dollars) per month. Moreover, Internet will cost $80 to $100 reais ($ 15 to $20 dollars) per month.
Depending on your contract, you should be able to stop or shut down utilities when you’re gone for an extended period.
This varies greatly depending on the type of property you purchase in Brazil, but as a general rule, ongoing council taxes can be as high as 1% of the property’s worth.
Most houses listed in Cheap Houses Brazil are not located within a condominium complex. Yet, some are. Condominium fees vary depending on the type of building, but average between $200 and $800 ($40 to $150 dollars) per month.
Expect to pay $20 to $60 reais ($2 to $12 dollars) per month if you want insurance.
Maintenance and renovations:
Maintenance costs will very much depend on the individual house. My house was in really good condition, so I’ve only spent about USD 3000 to renovate.
When building property in Brazil, construction costs range from R$500 to R$1,500 per square metre, depending on the quality of materials used, the number of floor levels you intend to build with your development, the location of the site, and whether or not you require project management during the construction phase.
Unless you have a close friend, who lives nearby, you’ll probably need someone to come by when you’re not home to air out the house, cut the grass, check on things, and so on.
If you want to hire a person/company to manage your property when you are abroad you will likely pay anywhere from 100 to 400 reais (20 to 75 dollars) per month depending on the location.
4. Check the legal status of the property and possible debts of the seller
In this article where we talked about the real estate buying process in Brazil, I explain that it is imperative for you to check the property registry (“matricula”).
You can check the property’s registry at the respective notary (“Cartório de Registro de Imóveis”).
The registry (or “matricula”) holds all of the property’s pertinent information. The current and previous owners, as well as the size and registration ID, are all listed there. It may reveal whether the property is the subject of a litigation that could lead to a property seizure. Also, it will show if the property is being used as a guarantee for a business transaction.
If you want to go one step further in terms of precaution you can also check for any debt’s that the seller might have. More specifically you are looking for debt linked to the owners within the past five years. This is because, in some exceptional circumstances, if the owner has some debt the property might have been used as a guarantee of payment. So, in some rare circumstances, the creditors might be able to legally seize the property even after being sold to a third party. Sure enough, eventually, you would get your money back but that would mean headaches along the way.
5. Be mindful of the location of the property
Now all locations were created equal when you are selecting a place to live. Common sense, but nonetheless true.
It’s important to get a ‘feel’ for the house and imagine yourself spending time there before you buy it.
Almost as important is to see the surrounding area in terms of logistical considerations.
What are the public transport options like?
This is important because you need to know how you will get to your house whenever you fly in the country (check the FAQ for more information about that).
Do you have basic shops (e.g. supermarket, pharmacy, etc.) around you?
Nobody wants to take a 30-minute bus to buy groceries on a weekly basis (unless of course you intentionally buy a house in the countryside and want to be away from society)
What is the “vibe” of the area?
You must like the feeling of the neighbourhood since you will be living there. The best way to check for that is to go visit the property before buying it (even though you could buy the property from overseas without even going to Brazil in the first place). Remember that Brazil is a developing country and different areas within a city show drastically different levels of development.
6. Check for the safety of the neighbourhood
This goes hand-in-hand with the previous point I made about location. Yet, it is so important in its own right that I decided to separate.
We all know that Brazil is an amazing country. Yet, perhaps not the safest all around. To put things very crudely you can think about Brazil in the following terms. Some areas are a no-no since these are simply too risky to walk around or live in. On the other hand, other areas within cities are very safe. Same levels of safety of some European countries. So, it is all a matter of where you choose to buy the house.
It is a little bit difficult to gauge how dangerous an area is if you are a foreigner. Perhaps the best way to do so is to ask a local person if the area in which you intend to buy the house is safe or not.
Another alternative way to gauge how dangerous is an area is by looking at the houses around it. Does it look like a very poor area? Sadly we all know that crimes are higher in these areas, and if you are a foreigner you will likely be a target.
Now comes the good bit.
I have tried to do part of this research for you.
So, whenever you find a property in Cheap Homes Brazil rest assured that the place will probably be fine in terms of safety.
7. Do not only focus exclusively on beachfront properties
I get it. We all have that image of moving to a beachfront property in an isolated area of Brazil. It is simply the tropical dream to escape the rat race.
No pointing of fingers here… I have also been there.
Although you can find amazing beachfront properties in Brazil, if I were you, I would not focus entirely on those.
The reason for that is simply because Brazil has a lot more to offer.
What I am talking about here are rural houses or even urban houses in cool cities around the country.
Also, sometimes you might find a house in a coastal city that is 10 minutes away from the beach that cost a fraction of the price from the house just in front of the beach.
8. Subscribe to the Cheap Homes Brazil newsletter
I wish I had a resource like Cheap Homes Brazil back in the time when I was looking for my Brazilian house. This would have saved me thousands of hours of research…
Well, I guess you know now why I decided to create the website.
So how about joining the Cheap Homes Brazil Newsletter?
I’d love to send you 10 of the best Brazil real estate deals listings every week.
The properties I include in the newsletter represent excellent value in coastal towns or rural areas (urban areas are included if they are of excellent value).
The best of all is that all deals are under $100k dollars.
If you want information about my newsletter, click here.
9. Consider hiring an intermediary
Sure, you can totally do the whole process of buying a home in Brazil by yourself. I know people that have done that.
Having said that, in many instances, it makes sense for you to ask someone to help you out in the process of purchasing or managing the house. If you have a friend there that speaks Portuguese then great, that might be enough in some instances.
But sometimes you will want to be a little bit more careful.
The three main intermediaries that you might consider hiring are the following:
A real estate lawyer:
This person will review the contract and check if the seller and its property all look good to go.
An intermediary for the negotiation (real estate agent or a local friend):
This person will help you negotiate , check the house, pay, among other things.
A person/company for the maintenance (real estate agent, specialized company, or a local friend):
This person would pay the bills and check on the property once in a while when you are not in Brazil.
I will go out of my way to say that, unless you speak Portuguese yourself or have a very good friend that does — hiring an English-speaking intermediary will actually save you money, despite the extra fees.
If you want help to get my recommendation in terms of any of these intermediaries contact me here.
10. Be mindful about who you are buying from
Usually buying directly from the owner himself is the most simple and straightforward way to acquire a home in Brazil (assuming of course you made your due diligence and check for the owner’s debt).
However, in some instances buying from the owner directly is not possible. In such scenarios special considerations might be required:
If you are buying from a Brazilian company:
If the seller is a Brazilian corporation, make sure the individual who signs the final contract has the legal authority to transfer the property to you. To do so, you’ll need a copy of the company charter as well as the most recent addition/amendment. Then look over the administrative provision to establish who has signing authority. To be sure, go to the local chamber of commerce (junta comercial) and get a “simple certificate” (certidao simplificada).
If you are buying from someone who has a power of attorney to represent the seller:
If the seller appoints someone to act as their legal representative in the transaction, the power of attorney must be public (registered at a notary office), valid, and expressly grant the seller the authority to sell that specific property. To check the legitimacy of the power of attorney go to the notary office that issued it. Request a “certidao do procuracao,” which would set you back roughly $40 reais ($8 dollars).
If you follow these precautions, you will avoid a lot of possible headaches and legal problems in the future.