Real estate commission, real estate contracts and sales contracts

3 February 2022 | 0 comments

On this page you will find relevant information about some essential elements in the process of selling a property. For any question or clarification regarding these topics, please do not hesitate to contact us.


Estate agents fee

With a few rare exceptions, real estate fees in Portugal are almost always paid by the vendor. Payment of this fee is only due if the agency you have a contracted is also the one that contributed towards the conclusion of the deal with the buyer. Therefore, if the agency with which you have entered into a mediation contract has not effectively contributed to the process of finding a buyer for your property, the fee is not due.

Regarding the value of the fee, there are no minimum or maximum values established by law. The value of the real estate fee therefore depends on several factors, such as the market situation (supply vs. demand), the quality and quantity of the services provided by the agency, whether the contract is exclusive or non-exclusive, etc.

There may be estate agents that work at 2% or 3% and others that work with percentages of 6% or 7%. In the specific case of Lusoland, we work with the standard values of the market and which are the average in Portugal. Please note that VAT is added to the value of the fee.


Real estate mediation contract

Contrary to what happens with the value of fees, real estate mediation contracts are regulated by law. The Institute of Public Markets of Real Estate and Construction (IMPIC) is the state entity responsible for the licensing of real estate agents and there are certain clauses and information that must be included in all real estate mediation contracts in Portugal.

For you as a consumer, you can, for example, use the IMPIC site to check if a certain person – individual or collective – is duly qualified to carry out the activity of real estate mediation and if they have a valid AMI number (Álvará de Mediação Imobiliária). You can search by location, AMI number or name of the entity. You will find the link here: LINK

The real estate contract is a guarantee for both parties involved (real estate agent and vendor) and must always be put down in writing. Besides information about the selling party, the real estate agency and the property, it also establishes the amount of fee and the conditions under which it is paid.

In a mediation contract a vendor can always choose between two options: exclusive or non-exclusive contract. Both options have advantages and disadvantages, both for the vendor and the real estate agent.

Exclusive contract: In an exclusive contract, the vendor usually pays a lower fee. The advantage for the vendor is that he will pay a lower fee than if the sale had been made on a non-exclusive basis. The disadvantage is that the vendor cannot advertise the property himself; all the advertising and process of finding a buyer is reserved to the estate agency for the duration of the contract.

For the real estate agency, the advantage of the exclusivity contract consists mainly in the security that for a certain period of time, only it can advertise the property on the market. The agency can therefore invest more time, money and resources in advertising the property, without running the risk of another real estate company finding a buyer first, thus annulling all the investment made. The non-exclusivity contract does not have a legally defined duration but is usually for 6 months.

The disadvantage for the real estate agent in an exclusive contract is the inverse of the advantage for the vendor: the value of the fee is lower. The real estate agent will receive less remuneration in the exclusive regime than in the non-exclusive regime.


Non-exclusive contract:

The disadvantage for the vendor in this option is that he will pay a higher fee than in the exclusive regime. This is on the other hand also the advantage for the real estate agency, as it will receive a higher fee; for instance 5% instead of 4%.

As mentioned in the previous point, a non-exclusive contract usually means that a certain property is listed by more than one agency. Thus, the disadvantage for a real estate agency in a non-exclusive contract is that there is always the possibility that a competing agency will sell the property first; a property in which the real estate agency has invested a lot of resources, such as advertising, fuel, specialized photography services, etc.

Finally, as far as the advantage to the vendor is concerned, it essentially boils down to the fact that working with two or more agencies can result in a wider range of possible buyers. And although most agencies advertise their properties on the same portals as the competition, the real estate agents – through their own databases and daily relationships with potential buyers – can have access to different client portfolios.


Having briefly enumerated the main advantages of both options, the question remains of trying to answer whether one is better than the other. In short, each case is unique and one option may be more suitable in some situations than another.

However, many of our clients choose to combine the two: initially they choose to work with us on an exclusive basis, so that they pay a lower fee in the event of a sale. If however during the term of the exclusive contract it has not been possible to find a buyer, they usually choose to continue the contract, but this time on a non-exclusive basis, entering into further non-exclusive contracts with one or two additional agencies to increase the pool of potential buyers.

Whenever possible, we advise our clients to work with a maximum of 3 agencies simultaneously on a non-exclusive basis. On the one hand, this reduces the total number of people involved and allows for more efficient management in communicating with all the estate agents, organising viewings, etc. On the other hand, a property that is being advertised by 3 different agencies will probably not sell if the number of agencies is increased to 5 or 6; the impediment to the sale in these cases will certainly be related to the property itself and eventually also to the price at which it is being put on the market.

For all questions related to property prices, we suggest reading our article on this subject.


Promissory contract and final deed

Promissory contract of purchase and sale

The promissory contract of purchase and sale (abbreviation in portuguese: CPCV) formalises the buyer’s intention to buy a property and has legal force. The property is still legally owned by the vendor and only at the deed will the property be registered in the name of the buyer. CPCV’s are signed for various reasons and are not compulsory. In most cases, the buyer is still waiting for the release of funds from his bank, for example, in cases where the buyer needs a bank loan. In other cases, part of the documentation relating to the property may still need to be updated before the deed can take place. The period of time between the CPCV and the deed is flexible and is always previously agreed upon between buyer and vendor but is on average 3 months.


At the moment of signing the CPCV, a deposit is made. Here too there is flexibility and no mandatory amounts. But the buyer usually pays a deposit of 10% of the agreed sales price. The remainder is due at the time of the deed. The deposit is normally paid directly to the vendor and is usually done by bank transfer while at the time of the deed the remaining amount is paid by bank cheque.


Is there a risk of losing the deposit? Yes. It rarely happens, but in cases of default through the fault of the buyer, the vendor is allowed to keep the deposit. The vendor can then choose to put the property back on the market. Conversely, in cases of default through the fault of the vendor, the buyer is entitled to get their deposit back plus the same amount, i.e. twice the value of the deposit. These terms are always included in the CPCV clauses and guarantee both parties compensation in the event that the deal does not materialise.

A brief note on a question that frequently arises regarding one of the clauses in mediation contracts and which is connected to the CPCV and the deposit. In real estate mediation contracts it is mentioned that: “The payment of the remuneration will only be made under the following conditions: 50% after the conclusion of the promissory contract and the remaining 50% at the conclusion of the deed . If no promissory contract is concluded, 100% of the remuneration is due when the deed is signed.

This clause is justified for two reasons. Firstly: the work of a real estate agent consists essentially of a single task: finding a buyer for a property. And when a CPCV is signed, the real estate agency has already achieved its objectives and should be entitled to its remuneration. In the vast majority of sales processes, the deed is signed on time and the deal is closed.

However, and this is the second reason, there are some cases in which one of the parties decides not to go ahead with the deal. If for instance the buyer decides not to go forward with the deal, the vendor can keep the deposit and will continue at the same time in full possession of his property. It is thus the work of the estate agent that has resulted in a financial gain for the vendor and it is our opinion that the estate agent should be rewarded for this work.

In those cases where the deal does not go through due to the fault of the vendor, the vendor’s action has meant that all the work invested by the estate agency in finding a buyer has been in vain. Also in this case, the real estate agent should be rewarded, hence the clause mentioned in the mediation contracts.

Finally, a question about the preparation of the CPCV. Who is responsible for the preparation of the promissory contract? As a rule, it is the buyer’s lawyer. Some agencies may offer draft CPCV contracts, but estate agents are not legally qualified to draw up promissory contracts. We therefore advise all vendors, whether Portuguese or foreign, to engage a lawyer or solicitor once the decision to sell a property has been made. Your lawyer will represent your interests by checking the property documents, the form and content of the promissory contract and all other legal matters relating to the purchase.

Should you have any questions regarding these and related topics, please do not hesitate to contact us.


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