The increase in house prices, the lack of properties on the market, precarious employment conditions, and low wages are some of the reasons that make it difficult for some Portuguese people to realize their dream of buying their own home.

The sale of a private property can be promoted by the owner themselves or through a real estate agency, which will advertise the sale on various websites known to all Portuguese people.

In terms of an auction, there are positive points about houses seized by the state: their value is usually below market value. However, there are some considerations that we must take into account before proceeding with the purchase of houses at auction in a judicial sale.


1.   Use License

The sale of judicial properties is exempt from the presentation of a use license. In practice, we will be able to buy any property, whether it is licensed by the City Council or not. However, when we want to make a profit from this investment, either through sale or rental, we will need a use license.

Therefore, before purchasing a property in a judicial sale, confirm that it is licensed with the City Council.

The same applies to the housing technical file, which is required for buildings that have been constructed. It also applies to those that have undergone reconstruction, expansion, or alteration after March 30, 2004.


2. Encumbrances or Charges

As a general rule, judicial sales are conducted free of encumbrances or charges. Thus, all mortgages, liens, and even declarations of insolvency are canceled, leaving the buyer with a “clean” property.

However, not all encumbrances disappear—for example, the encumbrance of non-division (prohibition of separation) or right of way will remain in force.

Another “major encumbrance” that does not appear in the Land Registry is the occupation of the house. If it is occupied, ask the person responsible for the sale: "By whom? In what capacity? And when will it be vacated?"

For these situations, we suggest that you seek the assistance of a solicitor.


3. Bank Financing

The reality is that everything will depend on the type of legal proceedings and your manager. Yes, it is possible to apply for bank credit. And yes, it is possible that you will have to pay the full amount within 15 days.

If you need to ask the bank for a loan to pay for the property, talk to the seller beforehand for a private negotiation. Make sure that bank credit is possible before making the offer.

If you need any information or assistance, please do not hesitate to contact UrbiSeg Imobiliária.

We will be happy to help!





Source: https://www.caravelaseguros.pt/
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