Buyer's Agents in Portugal
last updated: October 2023
Whilst a common practice in the USA and Canada, using a buyer's agent or property purchase consultant in Portugal (and other countries) can often work against you. Here's why.
- False sense of security
- Property listings are 100% public
- Miss out on many properties
- Weaken your negotiating position
- Hidden costs
False sense of security
There is zero regulation on who can call themselves buyer's agents in Portugal. All it takes is a convincing website (some only have a Facebook page) possibly sprinkled with some fake reviews, and anyone can call themselves an expert property purchase consultant or buyer's agent.
Many of these 'consultants' have themselves only recently arrived in Portugal, however this somehow makes them instant market experts. You will find, in practice, that they know very little about paperwork requirements, myriad rules, government regulations and all the other property purchasing procedures. A majority aren't even registered with the Portuguese real estate governing body, IMPIC.
Property listings are 100% public
Often you will see claims that they have special access to a vast database of properties across the entire country that they will scan for you to find you the right property. These 'databases' are 100% public and anyone with an internet connection has access to them - they're called property portals. On these, real estate agents advertise all their listings (sites like Idealista, Rightmove, and dozens of others) for sale.
A common complaint from buyers is how much time they've had wasted by being shown properties that don't actually match their requirements. Why get a 3rd party to scan listings for you and decide what you might be interested in viewing? Surely you know what you might like when you see it advertised?
Miss out on many properties
So the buyer's agent goes down the list of properties they think you may want to see. They have no knowledge of the properties and are simply contacting the selling agent saying they will pass on details of their client if, and only if, they get a 50% cut of the commission should the client purchase.
Unlike in the US, there is no cooperative compensation rule in Portugal. Many established real estate agents, who have to shoulder the substantial costs of listing a property, do not work with these purchasing consultants. So beware anyone promising you they can get you into any property for sale in Portugal - they're simply lying to you.
What this situation does mean however, is that you may never be shown your ideal property because your agent will certainly not mention it to you if they're not going to get a cut of the potential sale.
Weaken your negotiating position
You are in a position of strength if you make an offer to purchase a property directly with the selling agent, especially if there are competing offers. Which bid do you think the selling agent will present in the best light? The one where they stand to lose half their commission to a buyer's agent or the one where they get to keep their commission?
Established agencies can and do work with each other but there is the underlying principle of reciprocity. While they may give up half their commission today to a fellow agent, next month they may gain 50% by selling that fellow agent's property. With a property purchase consultant there is no reciprocity at all.
Finally, quite a few agents will highlight the full range of services they provide for you (free of charge, naturally). These include taking you to lawyers, mortgage brokers, financial advisors, currency conversion specialists, tax advisors, builders, etc.
All this at zero cost to you, the buyer? Sounds great!
Not so fast...
Many agents recommend services purely on the basis of the kickbacks they get for sending clients to these parties. An example, a certain local law firm pays €500 per client referred. Where do you think those €500 paid to your agent are going to come from? Correct. They're simply going to be factored into your final bill in some form or other. Ask your agent outright whether they are getting any kickbacks for their recommendations. Their answer will probably surprise you.
For the record, we only provide our clients with a list of professionals that we have heard from other satisfied clients provide a good service. We do not accept kickbacks from anyone, in any shape or form.
Professional agencies and agents prefer to work with prospective buyers directly. Less links in the chain mean clearer communications between parties, less time wasted and generally leads to negotiated deals where both parties emerge satisfied.
Contact and work with the selling agent directly. They know the property details first-hand and in the vast majority of cases you will be saving considerable time, money and aggravation.