Why We’re Walking away from Buying our Portugal Dream Home after 10 months, and Starting our House Hunt over from Scratch
Bom Dia!
I know the biggest and most burning question from everyone has been:
Have you found your house yet?
And the answer is ummmmm….idk read on:)
I’m not sure how to give you the short version of this story, but I’ll do my best.
JANUARY 2022
In January of 2022, when we first came to visit Portugal, I found our dream house.
A beautiful 19th Century Villa that had all of the old Portuguese charm and character I craved.
However, it was wildly above our price point and we were still extremely unsure if we could even make the move to Portugal a reality. I saved the property to my favourites, went back to California and started getting our house ready to sell. Throughout the year I checked on it, and all summer, it sat, same price, still for sale. Towards the end of the summer though, it disappeared. I thought it must have sold.
I trusted that if that wasn’t our house, then the right house would come along once we moved.
SEPTEMBER 2023
A few months before the big moving day, I searched again for potential dream homes, and there was “our house”, back on the market, and at a much lower price. I literally screamed with excitement and ran to show Strader! I mean, here we were, about to sell our house, about to move to another country, unsure of where would live, unsure about what our future would look like, and my dream home comes back on the market at a much lower price! I couldn’t believe it. It all felt meant to be. I immediately emailed the realtor and scheduled an appointment for the week of our arrival in Portugal.
DECEMBER 2022
In December 2022, we closed the sale of our home, flew to Portugal, and the week of Christmas, went to see the property. It was the first property we saw, and I knew the minute I stepped onto the property, it was “the one”. The same day, we submitted an offer. The sellers countered, we agreed on a price, and the buying process began. We sent the paperwork and documents from the sellers off to our lawyer, began the loan approval process and were on our way to purchasing our dream home. Or so we thought…
JANUARY 2023
I’m remembering as I’m writing this just what a roller coaster this has been. For starters, the property needed a ton of work. I mean, It’s a 19th Century Farmhouse, so of course we were aware that it would need a lot of love. But we wanted to know exactly how much love it needed, aka dollars. We brought back a contractor a few weeks after our offer was accepted to asses just how much repair the property would actually need. The property consisted of three main houses and several support annexes. All of which needed extensive roof repair, if not full replacement, and then we found out that all of the roofs had asbestos. On top of the issues with the roof, there was water infiltration throughout, damp rise, mold, termites, and that was only what we could see on the surface. The contractor gave us amassive estimate for the repairs. We tried negotiating further with the sellers further, but they wouldn’t budge.
We looked around at other properties, but nothing compared to this one.
So we decided we would do most of the work ourselves and go forward with the purchase.
FEBRUARY 2023
After receiving the documents from the sellers, our attorney immediately raised concerns. The areas didn’t match with the finances, which meant the square meters from the paperwork didn’t match what was on file with the finance office. The property was also missing a current living license. If a home is built before 1951 in Portugal, the sellers can obtain what is called a 1951 Certificate, which makes the property exempt from having to obtain a new living license. The sellers were under the impression that they didn’t need this 1951 Certificate, because it wasn’t required for them when they purchased the property, 15 years ago. However, the laws of real estate have changed since then, and now the requirements to sell a property in Portugal are much stricter.
If there has been any work done on a property without a permit, the work is considered “illegal” by the camera. And when a seller goes to sell this property, if there are any “illegal” parts, they must first legalise the works done, or the bank won’t finance the part of the property that is considered “illegal”. If the entire property is considered illegal, they cannot sell it at all, and cannot record the deed. However, the sellers thought that if they had an all-cash buyer, it wouldn’t matter. But, even if they have an all-cash buyer, the buyers are buying an “illegal property”, and absorb a huge amount of risk. The new owners will be unable to re-sell the property and could be told to tear it down at any time by the camera.
We spent months trying convincing the sellers that they needed this 1951 document, and for the areas to be corrected with the finances in order for our bank to grant the deed and finance our loan.
MARCH 2023
By March, the sellers had finally hired an attorney, and we thought were finally on the same page.
In Portugal, when you intend to purchase a property, the first thing you do is sign a Promissory Agreement. That is basically your “letter of intent to buy”. But when you submit that letter of intent and sign the Promissory Agreement, you pay the sellers 20% of the purchase price. There isn’t such a thing as a plumbing inspection, electrical inspection or anything like that. The property is sold “as is”. So coming from the US, where there is a pretty good system of checks and balances when it comes to home buying, this already felt very risky.
Once you pay the 20%, then you apply for a mortgage. The mortgage is approved on a house by house basis. It’s not like it is in the States, where you apply for a loan, the bank tells you how much you are approved for, and then you go shopping for houses within your budget. You apply for a mortgage approval for a single property. Once you’re approved for a mortgage, the bank comes out to evaluate the property and assess the value. As we say in the US, appraise the property. And sometimes, the property doesn’t “appraise” for the value of the agreed upon purchase price. In that case you (the buyer) have to come up with the extra cash, or you can try to negotiate to reduce the purchase price with the sellers. If the sellers back out of the deal after the signing the Promissory Agreement, they have to pay you back double of your deposit.
So the sellers kept wanting us to sign this document and give them 20% of the purchase price, which is Portuguese custom. However, they hadn’t started the process of getting the document, and we knew that minimum it would take 3 months with the camera. We told them that we didn’t feel comfortable giving them a 20% deposit without having all of the legal documents in hand.
Every Friday for months, I would check in to see if there was any progress, and every Friday they would tell me, not yet. We looked at other properties as back ups, but still this house still had my heart. We lost out on several of really incredible homes, but passed because we were holding out hope for this one.
I forgot to add that once they accepted our offer we began the approval process with the bank, got pre-approved, but by the time we convinced the sellers to get the 1951 document, our pre-approval had expired.
APRIL 2023
So here we are in April, still waiting on the legal documents, our bank loan approval expired, but still actively checking in with the sellers and letting them know we are still here.
The sellers emailed to say that a German couple had knocked on the door and offered them more money. The sellers then demanded that we sign the promissory agreement and give them 20% to secure the property, or they would go with the higher offer. However, we still had no 1951 Certificate or Living License. Not to mention, the sellers had agreed not to show the property while we waited for them to get their paperwork in order. I was so upset. Here we were waiting since December for a property we were told would be ours, only to find out they were allowing other buyers to view the property.
MAY 2023
Against our better judgement, we came up with a compromise.
Even though we didn’t have the 1951 document, we would sign the Promissory Agreement, but only give them a small percentage of the deposit up front, and the remainder of the deposit would be held with the real estate agency until the 1951 document was produced. Similar to an “escrow account” in the States.
It seemed like a very reasonable way to move forward.
They responded with an email in response, ceasing all communication and further negotiations with us. They wrote that negotiations are done, and they didn’t wish to speak with us any further. I was devastated and so confused. What had we done that was so offensive? We couldn’t figure out how our proposal had been answered with such a response. At that point, we started to feel like they were hiding something. I even did a torot card reading and my reading said they are hiding something and nothing good can come from this, run in the opposite direction. I’m laughing now because every card reading I did in regards to the house, all said basically the same thing, turn around and run in the opposite direction.
We walked away and began looking at other properties.
JULY 2023
After a trip to Spain, I couldn’t get the original property out of my mind. Once we arrived back in Portugal, we decided to re-engage. It had been a couple of months since the deal fell apart and it was still on all of the websites, so it appeared to still be available. We emailed the agent, and sure enough, it was still available, and they wanted to move forward with us. I’m not sure what happened with the other buyers, nor did I care, I just wanted my house, so I ignored all of the warning signs and went forward. So now, we were in July. The sellers said they had already applied for the 1951 document, and were just waiting for the paper to come from the camera which should come in 30 days. Feeling confident everything was being worked out, we started negotiations again on the promissory agreement.
We also had to re-apply for a mortgage loan, so we went through that process again, and got re-approved. The bank came out to do the appraisal, and unfortunately came back at a much lesser value than our agreed upon purchase price. And as I mentioned before, if that happens, the buyers have to come up with the difference in cash. The property already needed so much work, and this extra cash was our renovation budget. We went back to the sellers and asked if they would consider splitting the difference with us, and again said no. So again, going against our better judgement, we decided to make it work, give them the extra cash, and sacrifice our reno budget. We’d have to do the renovations in stages and do most of the work ourselves.
We thought by the end of July we would have a signed agreement, all of the legal documents, and we’d be moved in by Christmas.
AUGUST 2023
Now, it was August, and in August, the entire country of Portugal goes on holiday. So all of August, we waited and waited. Finally, on August 30th, I got a call from our agent.
The 1951 Certificate had been denied by the camera.
The entire property was now considered “illegal”.
Here we were days before we were supposed to sign our agreement, finally put down our deposit and the entire deal completely fell apart.
I felt like someone kicked me in the stomach. I was in utter shock and disbelief.
We still didn’t understand how this could even happen. Apparently there had been additions done throughout the property after 1951, and the camera will not issue a 1951 Certificate if any additions or “works” have been made to a property since that date. There was an illegal pool added, annexes, floors added onto houses…. I mean so much additional work had been done, and we thought all of this was legal the entire time.
So now the entire property needs to be legalised before they can sell the property.
The sellers have to hire an architect to come out and draw plans of the current buildings and structures and submit them to the camera for approval as a “new” project. However, this process has been known to take 1-3 years, and even then, the camera can deny parts of the project and make them fill in the pool, take down parts, etc.
Its honestly the most unfortunate and unexpected outcome.
I never even thought that getting denied was even an option. I thought once you submit the request, they grant it. Done deal. So needless to say, I was completely blindsided. And almost a year later, only to find out now, that the property wasn’t ever considered legal.
SEPTEMBER 2023
In September, after discovering everything, the seller suggested that we rent the property while they get the paperwork. This sounded pretty risky considering how much work the property. needed and the uncertainty of the camera’s decision. But, after talking with friends and finding out that this is somewhat normal here, it sounded like it could work. We are currently renting and not sure how long we can stay in our rental. So we spoke with our lawyer, and decided it would only make sense if we could rent-to-own. So we created a rental proposal and sent it to the sellers.
OCTOBER 2023
The sellers finally got back to us a month later and told us that they have no intention of renting the property. They will legalise the property and once all the works are carried out, they will put the property back on the market.
Another gut punch.
So here we are now in October 2023, almost a year later, and back to square one.
This was a really tough pill for me to swallow. Feeling like this house was meant to be all along, but also seeing sign after sign along the way that it wasn’t. And looking back, the writing was literally on the wall. Almost everyone I’ve spoken to in Portugal, who has bought a home, has a similar story. So I kept rationalising everything that was happening, thinking that it wasn’t just us or this house, that we would have to struggle and fight to get the house we wanted. But now looking back, it was all just one big test. We shouldn’t have to scrape and fight and force the property that’s meant for us. The property we’re meant to buy will come with ease and flow.
I wish I would have been able to walk away sooner, but I think sadly, in order for me to let go of this property, I had to go through all of this, and know that I had tried literally everything and there was nothing left to do.
The day we said goodbye to The Blanco Bungalow California
I knew the hardest part for me, moving here, would be the interim between letting go of my first love, our California Bungalow and finding our new home here in Portugal.
It took so much for me to let go of our home in California, even though I was the one who pushed for the move. I knew I needed a home to look forward to, in order to for me to let go of the home we were leaving behind.
I’m also dying to start a new restoration and project. I’ve been fighting the feelings of feeling stuck, in limbo, stalled, frozen. Without that creative outlet for me to pour my energy into, I’ve felt a bit lost. We have so many incredible ideas for what we want to start here, but they’re all based around a property.
I know that the type of property we’re looking for is also incredibly specific and they are few and far between. So it’s hard not to give up and start viewing properties that don’t feel aligned, because we’re afraid we won’t find the dream property, but I know we can’t settle.
I know now that we can’t force it or rush it. I have to get comfortable with the uncomfortable and the in-between. We’ve learned so much in this process, and not just about buying a home here, but about ourselves, about our relationship, about patience and trust. To focus less and less on what’s out of our control, and more on being grateful and present in the current moment. Trusting that everything will work out just as it’s supposed to. To look around and appreciate that we’re able to move to Portugal, wake up healthy and together, in such a beautiful place, and how incredibly lucky and fortunate we are.
So as much as I want home now, I know I can’t rush or force it.
Life is good.
So now we start our search over again…. from scratch.
