When my husband and I decided we wanted to move to the Algarve… and then further decided that we wanted to buy a home of our own in the Algarve… we worried we wouldn’t be able to find something we liked that we could afford.
This coast of Portugal has become so popular that we assumed modest-priced properties must no longer exist.
We decided to aim our focus on affordable Portuguese real estate slightly east of the usual hot spots and look for familiar and trusted names in real estate in those areas. I remember how excited I was the day I called RE/MAX in Tavira.
Looking back, I’m so glad that was my first call because it made the rest of our journey much simpler. In fact, we were tickled pink to discover Tavira offers a great range of properties, including many economical listings.
If you have more than 300,000 euros to spend, skip to the next paragraph. If not, be aware that, in this part of the world, you will not find many low-priced condos, cottages, resort apartments, or country homes with spacious rooms.
What do I mean by spacious? Let’s just say your overstuffed three-seater couch/comfortable reclining chair combo will probably end up in different rooms. Or in a garage sale. King-size beds, the extra leaves in your dining room table, HGTV-approved kitchen islands with extra prep space… nope… none of that will fit!
Finding city dwellings larger than 1,000 square feet proved challenging, and, in my research, I learned that sometimes the listing’s square meter measurement included balconies or other types of outdoor space, even spaces too small for anything but two or three flower pots.
Also worth noting is that listings boasting terraces are often referring to rooftop terraces. To access these outdoor spaces, you must leave your apartment, carry belongings on the elevator or stairs to the roof, and then limit your activities to a small, divided area that may offer little privacy. Depending on where your designated spot is, it may be beautiful… or not so much.
When visiting properties, take paper, pen, and a laser-guided measuring tape for quick, easy, accurate dimensions. Many listings don’t specify room sizes or might list them in meters, which we Americans can find harder to visualize. My device (US$39.95 at Lowe’s) was so popular that I left it as a gift for my agent.
Another tip: Start watching HGTV’s “Tiny House” and “House Hunters International” to retrain your brain into thinking small. It helps.
Other items I asked my Tavira real estate agent about included:
- Proximity to local/regional/national bus and train routes, stations, and stops (check)…
- A nearby airport (check… it’s 35 minutes away from the house we eventually settled on, in Faro)…
- Commonly used medical specialists, vision and dental health facilities (check)…
- Pharmacies (check)…
- Recreational facilities such as swimming pools, golf courses, parks, and senior centers (check)…
- Public and private schools (check)…
- Local administrative assistance with some of Portugal’s legendary red tape (check)…
- Lawyers and banks (check—at least three of each).
To make a real estate purchase in Portugal, you need to obtain a Número de Identificação Fiscal (commonly referred to as an NIF).
You will also need a lawyer, a power of attorney, a certified fiscal representative (our lawyer was able to provide all three of these services), and a Portuguese bank account.
We were lucky. The very efficient law firm we worked with produced our NIFs in one day. We needed two because a married couple requires individual numbers. They also confirmed their team would be our fiscal representatives, in writing, that same day.
As for the bank account, it took two visits and more than three hours to open. Patience and polite conversation are customary at formal business appointments in traditional Tavira. Do not expect to rush. Rushing is rude.
Banks may require notarized documents, so call before you leave home to get the list of items they want. If you’re not sure which bank is best, your attorney probably has a preference, so you can start there. You can always change banks after you settle in.
I did not find an account without a monthly fee attached. It’s about 12 euros per month for the use of a credit card, debit card, checking account, and savings account at Novo Banco. Frequent use may result in lower fees. I’m told most European purchases are made with a debit card, but I’ve had no problem using my Mastercard.
Obtaining a bridge loan from Novo Banco was perhaps the most painful part of the process. The best thing we did in this entire home purchasing experience was to request a 90-day closing period. Had we gone with the traditional 30 or 60 days, we would have run out of time before our Portuguese loan was approved.
To obtain our loan, we dealt with three levels of banking personnel (local bank manager, regional mortgage specialist, and head office in Lisbon). Each had an interest in different documents and reports required to approve their portion of the package.
It was well worth the wait, though. We saved on closing costs and got a great interest rate.
To facilitate the 90-day closing period, we offered a higher deposit to the vendor in our promissory contract. That reassured him of our sincere intention to close. In Portugal, the vendor gets to keep the deposit, even if the purchase falls through.
Bottom line, we were able to accomplish every necessary prerequisite and managed to find and launch the purchasing process for an affordable apartment after just two weeks in Tavira.
And that was just the beginning of our amazing overseas retirement adventure.