How to Buy Real Estate in Brazil in 12 Easy Steps
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Loading... - Carlos Costa
- 27 Jun 2022
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Buying real estate in Brazil may be one of the best business opportunities nowadays for foreign buyers. Here we describe the 12 steps you need to follow to safely buy a property in Brazil.
- Do It Yourself or Hire a Lawyer
It usually comes down to how familiar you are with Brazil and how much you are paying for your property. People with solid connections with locals may rely on trustworthy realtors to help with some of the acquisition steps. This may be enough for smaller acquisitions such as lots in the coastal areas of Brazil. Investors who don't have such networking and/or are buying higher-amount properties such as a condo in Sao Paulo should retain a lawyer.
- Check Property Records
Once you have chosen your target property, you should obtain a copy of the property deed ("escritura"). The deed should have an exact description of the property, ownership, and if any major problems (e.g.: liens, usufruto, encumbrances, or disputes) are attached to the property. A clean deed should show no major issues, be registered in the name of the seller, and issued recently. You should avoid purchasing properties under probates, divorcing couples, or any other complex situation.
Although some sellers will offer to give you a copy of the deed, we recommend that you obtain a copy of the deed directly from the registration office in charge of the target real estate.
- Draft Purchase & Sale Agreement
The Purchase & Sale Agreement document addresses not only the terms of sale but also the timeline for the transactions and allocation of obligations and rights to the parties. Among other concerns, stipulate at least 60 days between the signature of the agreement and the closing to allow enough time for all the closing-related tasks to be completed. Never allow a realtor to rush you. Realtors in Brazil will invariably pest you until you either sign a contract or tell them not to rush you. Realtors may lie about the existence of other interested parties to push you to make a deal.
- Provide a Downpayment
In Brazil, it is customary to provide a downpayment as soon as the Draft Purchase & Sale Agreement is signed. The amount to be provided varies greatly. Amounts going from 5% to 15% are most common, although other amounts may be negotiated by the parts. We recommend that you pay no more than 10% as a downpayment. You should hold most of the payment until the closing as this is the most effective way to reduce the many purchase risks involved. Important: there is practically no title insurance or escrow accounts in Brazil.
- Send the Money to Brazil
For a Brazilian seller to receive a bank transfer from abroad, the Brazil Central Bank must authorize the transaction. The amount being sent must match exactly the amount shown in the signed contract. It is also necessary for the seller to "open an exchange account" with their bank. This may be a turnoff for some sellers, although many individual sellers will learn about that only after they already signed the Purchase and Sale Agreement with you. Read More...
