Algarve Property : Negotiating for 2014

Buying a property in the Algarve this year? 

Well, presumably you wont be happy to pay the asking price for a property s

o you’ll be looking to get the best deal possible, which means negotiation.  How can you get the best deal possible, without offending the sellers so much they tell you to take a run and jump? Well quite easily really, two key elements you must have in place / know before hand.


1) How much capital you have now and available for a deposit upon immediate acceptance of the offer

2) Time frame for completion (this means if you need a mortgage then you already have it pre approved)


Also it’s worth mentioning that if you want to put an offer in on a property then do so with the intention of buying it if the offer is accepted, or the negotiating is suitable for you.  Putting in offers left right and center doesn’t really help you and in fact can actually make you look less serious than you really are. By all means have a number of properties you wish to, attempt, to buy. But make offer’s on them in turn based on your preference if you’re in hurry then put a time limit on the validity of the proposal so the vendors much revert back with an answer within a time frame, maybe 24 or 48 hours, or you’ll move onto your next option.

Items such a furniture, air conditioning, rental’s already booked for the property are all items that can be negotiated as well but unless they are of a high monetary value the key focus is the price. It’s better to have €20,000 off the price, than a house full of second hand furniture that you’ll be replacing anyway!

2014 will see a slight turn in favour of some seller’s, especially those in prime locations that have less comparable properties so be prepared for a counter offer or make a single and final offer if you don’t want to be drawn into back and forth negotiations.

Also, a tip that can sometimes be hard to avoid. If the seller is there and / or their agent try not to look too keen!

It’s a given that we’ll always work our hardest to negotiate the best price for you as our client, the above information is simple preparation and a quick discussion with your realtor should help ascertain the likely hood of an offer being accepted so use them to the fullest.


Portugal Property – Whats your Objective (Part2)


Capital gain – There are few “free lunches” still available. The days of the desperate seller are now gone. The desperate ones jumped ship 2 to 3 years ago. The bankrupt ones had their properties repossessed  at the same time. Yes at the top end, you can still find 3.3 million€ villas for 1.5 million€, but at the sensible end, anyone with a property under 350,000 € does not have to sell as rental incomes will cover Bank interest payments and keep them at bay until times get better, so silly offers are rarely accepted.

Distressed sales usually are now linked to new developments where builders are suddenly dumping properties to avoid paying council tax (they have exemption from this tax for a fixed period after build). These are usually apartments or townhouses in sizable condominiums. These make great rental and capital gain purchases…..less than 250,000€ in a good location with proven equity gains and you are on to a winner.

Bank repossessions are not always good news! Many developments were vastly overpriced 5 years ago. The Banks may have lent the builder up to 80% of that value and as prices have dropped 30 or more, so the Bank are asking 10% more than the current market value!!!

Usage – Is it a big family…..are the older teenagers really going to come to Portugal with Mum and Dad or go to Ibiza with all their mates instead? It’s important because many buyers specify 3 bedrooms when 2 would be better. 2 beds rent more often, are much cheaper and the buyer has much more choice. Most owners have sofa-bed in the lounge anyway, so a 1 bed sleep 4, a 2 beds sleep 6 and so on! 2 bed rent and sell better as they appeal to the largest audience,… so consider the usage carefully.

Finally expectations – If you want a 5 Star resort, expect to pay a 5 Star price, not only in the purchase but also running costs. Many people want a distress sale in an exclusive resort then are appalled that the condominium fees are 5,000€ per year! The reality is that if people were paying up to a Million for their property they could probably afford the upkeep for the stunning gardens, spa, 24 hour security, tennis courts etc. If someone spies a bargain in one of these resorts for 300,000€, they have to be able to cover its running costs!!

The Algarve is 150km wide, has 7 million visitors each year, and has strict planning laws As a result the demand for holiday homes out-strips supply. Yes of course, in these difficult times, there is a lot of property for sale, but most of it is average or poor. The nice, or well-priced properties in good locations sell quickly….. and the over-priced, average and badly situated properties don’t sell at all. The Algarve is like Brighton with sun and prices reflect that. Compare this to Spain with its 1,500 miles of coast and massive uncontrolled over build, poor and uncontrolled planning and increasing lack of demand and you see why prices plummeted there.

Portugal Property – Whats your objective?

Buying a Property in Portugal


As Portugal’s version of Phil and Kirsty, life can be sometimes very difficult for the seasoned Realtor. Not only does the job entail suffering the constant sunshine, 30 degree plus temperatures, stunning beaches,  beautifully built property and unusually healthy lunches, but also the enthusiasm of the over eager client can cause consternation and concern. Enthusiasm is great and is generally encouraged in the client, but  miss-guided over-enthusiasm can result in them making a disastrous purchase.

The objective of the purchase is vital information for the Realtor…..sounds obvious, but as keen watchers of Location, Location, Location will know, clients often don’t know the objective of their purchase  themselves, which intern has the Realtor going round in circles!!

With the holiday home there are many contributing factors that affect the objective:-

Budget – how much do they want to spend.  Again this sounds obvious……we all want a detached sea front 4 bedroom villa with its own pool, shops bars and restaurants within walking distance, next to the Marina and overlooking The Royal Courses 7th fairway for 190,000€. Most of us realise this is impossible unless it’s in Egypt or Bulgaria and the Course and Marina haven’t been built yet!

Have they cash or do they need a mortgage? If yes to the mortgage how much a month can they afford to pay each month? What cash deposit do they have (in the current climate this needs to be near 40%)? How old are they, what is their income, existing out-goings and financial commitments? Then do they need to cover this monthly cost by renting out, this in turn affects the location and type of property. Running costs, buying fees, condominium or maintenance fees, council tax (IMI),…all need to be taken into account when setting the budget,

Next is location, if rental is important that affects the type and location of the property dramatically. If the property is solely for them, do they want to be in the thick of it, or want peace and quiet. Is the distance from the airport, golf, local facilities and its views important?

Investment – Is the property an investment? Is it for capital gain or rental yield….or both?

Rental yields rely on low purchase cost and high tenancy, this in turn affects the location, and the owners personal usage. People with young children find renting out difficult as they wish to use their holiday home themselves in peak rental periods!!

Often the best rental properties are not the nicest as it is better to buy the cheapest property on the best resort. This property is usually the worst position, but the rental income is the same as the most expensive property on the same resort. Often clients emotion pushes them to spend an extra 40 to 50,000€ for the pool or golf view when the maths and commercial reality suggests saving and going for the less attractive option looking over the car park!!

Portugal Property – Ideal Listing Appointment, they exist?!


Selling your Algarve Property


As well as dealing with buyer’s for property in the Algarve, our intrepid Realtor has to also make sure we have the best of the best properties available and thereby must deal with the seller’s also. When we arrange listing appointment’s it’s always hard to second guess what the owner will be like. And by that I mean will they be sensible or will they be living in cloud cuckoo land.

Well luckily this appointment turned out to be one of the good kinds. As our Realtor turned up at the development of town houses  a place he knew well and had listed and sold one just 6 months ago, he knew the price that would be achievable and also had a comparable property to this one, a great advantage. The couple were lovely and were looking to move into a new, larger and detached property as the market has come down in price they thought the timing was right. The property, immaculately kept, was furnished wonderfully far more modern than the previous house so hopes were high this would be a good listing and would make a  great new home to a very happy customer.

Beautiful bedroom in Vale de Parra townhouse
Beautiful Bedroom in Algarve

“How much do you expect to get for it?” he asks, and braces for the response, normally it goes one of two ways, fortunately they ask what he thinks it will sell for, the other way being a ridiculously over priced amount, followed by comments about not moving a penny. “It’s not going to fetch as much as it could at this time as the market is harder and buyers are demanding so much more for the money, so the “value” of the house isn’t necessarily the same as the sales’ price nowadays, it’s about being realistic and marketing it at a price that people will be interested.” They agree and take on the advice, and agree a listing figure, the same as the previously sold property which was/is identical bar the furniture so a good price.

With this all agreed, all he needs is the property documents, a task far more time consuming than the actual listing appointment. Copies of deeds, floor plans, passports, fiscal numbers and the rest, can often takes weeks for seller’s to get together, 2 days later everything is prepared and nothing is missing, he think’s it’s a miracle. On top of this he’s also got a CD of professional photographs to use in the listing, guess which is his new favourite property?

To read a little more about selling your home please read our small guide page here.


Moral of the story – If you want to sell your house, take advice on the price, and have all the documents ready. It makes a big difference, believe me.


Hunt for a Villa – Central Algarve

A day in the life of a realtor – Hunting for a villa, a quick tale of a recent outing for one of the team.

This is a typical tale of a Portuguese realtor, having received the brief before the client’s arrive in Portugal. He spends many a day searching through countless properties looking for the best & most suitable properties for sale that fit their buyers requirements.  After viewing the properties with the listing agent to make sure that the photo’s aren’t shot with a fancy camera and distorting the garden and pool area from a pokey little corner plot to a sprawling infinity pool, he’s ready.

Now this is normal practice and after awhile anyone who’s done this long enough will know there’s a good chance most people’s requirements will be very similar and the process can be simplified by using properties seen before and quickly adding them to the viewers list.

So they begin the day and all is well, a few of the properties meet with the usual complaints, “not sure of the location”, “don’t like the kitchen”, “rooms are too small”, “too close to the road”, but more often then not there is at least one that is suitable and more importantly in budget (or so it would seem), and eventually they find it. A stunning villa on the hilltop over looking the countryside and the coast line, could we of found their perfect Algarve property?

Of course these days it’s certainly not expected that everyone who finds their ideal property, will they buy it.  So when buyer’s turn to him and say “we love it BUT, we’re just not sure if we can afford it” its half expected, and honesty is always appreciated, no reason to have the seller’s expectation built up on false hope after all is there?

However these client’s are smitten on this property and they turn around, against all better judgement and advice of the realtor, and say to the owner they will be putting in an offer the next day!  This is not a great thing to do, and certainly makes the realtors job of negotiating a better price 10 times more difficult, but it’s done so he has no choice but to go with it, he’s a professional after all and has been in this position many times before.

Bargain vilamoura villa for sale
Algarve Villa for Sale

After numerous phone call’s, email’s and 2 more visits to the property the buyer’s excitedly go home to prepare their offer. Then when the next day come’s, no offer arrives, a slight delay in the financing they say, will let you know tomorrow for sure. Again tomorrow come’s and nothing, the seller is now constantly calling to find out what’s happening as they were so keen, what can he tell them?  At last,  another quick message sorry for the delay will let you know tomorrow (4 days later) what we’ll offer.  Incredibly the next day nothing, now clearly something isn’t as it seemed the previous week, and it’s not a huge surprise to an experienced realtor here, it happens quite often in fact. The following day nothing, then a text message, not a phone call, saying they are no longer interested in putting in an offer and will wait and look for something else in a few months. Uh oh! He does try to call but of course there’s no answer. What has happened, no offer, no explanation, and not even a phone call to explain?

This is generally what happen’s when buyers come out looking at thing’s they can’t afford, and stresses the importance of arranging some kind of finance before wasting your’s and everyone else’s time, and repeatedly saying you’ll be putting in offer’s on various properties is not a great idea when you haven’t the money to pay for it.

So after a week of wasted time and effort the realtor head’s off to his next client and begins the process again, will they find the property of their dreams, and more importantly can they afford it?! We’ll find out in a few days time.

Moral of the story : Don’t say you’ll put offer’s on properties to the owner EVER, & if you don’t have the money just tell your realtor this as they may even be able to help.