NataHH

We are (non-resident) selling our holiday home in the Algarve. We are likely to accept the latest offer which is slightly below the price we are hoping for. Two estate agents are marketing the property. My question is: Do we keep it on the market until the promissory agreement has been signed or do we give them a time limit. I have no idea how long it takes from the verbal acceptance to the signing of the promissory contract. We have given power of attorney to our solicitor who helped us buying the house in 2002. Is there anything we ought to be made aware of?

coleio

Better to keep it on the market as, until the promissory is in place, the "buyer" can drop out/prevaricate with no penalty. The promissory can take as long as either party wants it to, obviously the "buyer" can be informed that the place is staying on the market till promissory is completed - just to make sure they understand that "time is of the essence" or whatever the legal phrase is.

chislenko

When we sold ours last year our agent seemed to hastily stop marketing the property on the basis of a verbal offer.

I reminded the lady that a property is not sold until money has changed hands.

As it turned out this verbal offer did come to fruition. Offer was in May, completed by September. There was a delay in the promissory contract as the buyer didn't want to shell out a deposit unless he was 100% sure of getting a mortgage.

If he hadn't got a mortgage we would have been back at square one which is why I was adamant that they should continue to market the property. Luckily the buyer did get a mortgage but it could have gone the other way.

We had to return to the UK so like you we gave POA to our solicitor and I have to say everything went smoothly. We also remotely engaged an accountant / fiscal rep to handle any CGT and file our paperwork. Again this worked very well.

Hope all goes well for you.

NataHH

Thank you Coleio and Chislenko for your much appreciated advice.

PDDSAA

Hello NataHH / All,

currently in a somewhat similar position regarding sale of a couple of apartments. About to instruct estate agent and will ensure kept on market until promissory contract signed, thanks for that advice👍

if you don’t me asking,
did you go Sole or Joint agency and
what sale percentage was agreed?

presume including IVA plus agency costs,
but excluding energy certificate,
Notary and lawyer costs.

TIA

chislenko

We shopped around and they were all pretty much the same %. We eventually went sole with the local to us agent. We paid 4% plus IVA. Obviously the estate agent costs are offset against any CGT.

One other thing to bear in mind is that there is a percentage adjustment mechanism which takes inflation into account between the time of buying and selling. This combined with estate agent fees and other costs saw us pay no CGT.

PDDSAA

Thanks for reply,
I’ve agreed 6 months Sole Agency @ 5%+IVA, to encourage ‘focus’/quick sale and content with that

second part is Interesting news,
Is this something different/additional to the revised taxation regime option for non-residents (basically -50% and then scaled charge based on global annual income?
TIA

NataHH

We decided to appoint 2 estate agents. Both offered 4% for sole and 5% for multiple agencies. Their approach to marketing/selling couldn't have been more different. One wasn't going to do anything until all the paperwork (habitation license, plans and registration of the property, IDs, EPC, etc) was on their desk. The other agent (before we signed their agreement) got 3 couples to view the property and we had 2 offers in the first week. Having 2 agents encourages them to work a bit harder. One of the agents offered us a cut in their commission to come closer to the minium price we are willing to accept.

You will need an EPC document which is not included in the agency fee. We asked the document hungry estate agent to organise it for us. Cost was around EU 300 and you'll end up with pages of pretty graphs.

With regards to CGT we will leave it to our solicitor and fiscal representative to sort out.

chislenko

I don't have a great deal of knowledge re tax on global income. Our solicitor told us about the inflation uplift and the accountant dealt with all the form filling / submission. The bottom line was that as we had owned for quite some time (20 years) the inflation amount plus other expenses (estate agent / EPC / some extraordinary building maintenance expenses all added together meant that we had no CGT to pay.

I paid 400 Euros to the accountant (our friends had used him the year previously when they sold up) and he did everything. For us it was a small price to pay for the peace of mind that everything would be handled properly and I didn't have to navigate my way around the Portuguese Tax Website. Added to that we were not in Portugal at the time of sale so 400 Euros for an "easy life" a no brainer in my book.

chislenko

Our estate agent also wouldn't raise a finger until all the EPC etc was in place. We had left Portugal by this time so had to put our trust in the agent. To be fair it all worked out well.

Having sold my late mother's retirement apartment in the UK this year, which was hard work, and selling our holiday home in Portugal last year I have to say the Portugal process was far smoother.

I would highly recommend the solicitor I used in Portugal who did everything right down to informing the Utility Companies. It was a well spent 1% of the sale price.

PDDSAA

Thank you for additional info, already
decided I will most definitely will be employing
an Accountant for complexities of CGT etc.