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Licensed or unlicensed?

Posted by admin on September 10, 2017
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There are quite a few websites which offer properties on the Azores and often buyers take in as much information as they can to find their dream home. I often get emails asking about properties that turn out to be not for sale at all.

A number of these websites and people that operate them are working either completely illegal or try to create a grey zone for them to operate.  Let me explain. In order to operate a real estate mediation business in Portugal you need to have a company (in our case: OceanDragon Medição Imobiliária Uni. Lda) and an office. You need corporate liability insurance which is costly, you need to pay taxes and social security, a complaints book for buyers and sellers which is used in Portugal to make and official case for review by the authorities. Having all that you need to apply for a license to operate and have no prior criminal convictions. The licensing authorities do audits and tell us the latest regulation updates.

A licensed mediator only advertises properties of which the company has a contractual agreement with the seller. They represent the seller and are your fastest partner to come to an agreement.  We operate without conflict of interests and inform you on behalf of the seller.

Unlicensed brokers are not restricted when it comes to regulations that safeguard conflicts of interest for buyer and seller. As a result we see buyers getting into trouble by signing a Power of Attorney with such operators to buy a house on their behalf. Do not do it! There are too many cases were buyers ended up losing money to such charlatans.

Some simple checks. Let them show their ID card issued by IMPIC, if they do not have one that is your first red flag. Check their website: is it on some free hosting site and does it use hotmail or gmail accounts? Red flag. Where is the office? Is it real or just some residential address? Red flag. They do not show a registration number on their website. Red flag. Proposed agreements such as power of Attorney or some service contract in English whereas these should be in Portuguese? Walk away!

Often such websites are offering properties against very attractive prices. Often it is just a clickbait. These houses are not for sale or have been sold long ago. They want a contract with you and will come back that the house or land was sold and offer you another one which turns out to be expensive whereas the seller is selling for a low price…they pocket the difference which can be thousands and in some recent cases tens of  thousands of Euros per transaction.

Some offer to construct you a house or renovate. Again these activities are licensed. You need insurance, a structural or mechanical engineer on staff etc. to offer these services. They have none of that. We can assist with proper engineers and contractors…do not use unlicensed charlatans as their construction might be cheaper but will cost you a fortune once those walls start cracking or your foundation turns out to be not upto specifications.

Another interesting business model I saw advertised is the man who goes to the owner of a property you like, irrespective if it is under contract with a real estate mediation company. He will then negotiate a discount and charge you a percentage of it. This kind of haggling is illegal and does not save you money at all. You can bid on properties through the mediator that represents the seller. There is no need for an unlicensed haggler in this process.

A licensed mediator does not buy for you. He sells to you and is happy to search and find that property you are looking for but he will represent the seller in the process.

On very rare occasions we work for buyers but will do so under a contractual agreement. This could be for auditing construction, arranging measurement of land, Due diligence, Project management or other tasks that need to be done before or after the purchase of a property.

If you are a seller keep in mind that by using a licensed agent you will receive an official invoice and tax receipt for our services. You can use this as a tax deduction as it is a cost of sale. This means that in case you make a profit on the sale you will shave off 28% of our invoiced amount in taxes.

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