When I first came to Fortaleza in 2001 property was very inexpensive by US standards. The dollar was strong and the investors hadn’t discovered the Northeast of Brazil. Land and property were mostly in the Brazilians’ hands.
Beach homes, villas, and other desirable property belonged to the rich and middle class of Brazil, especially Fortalezans; Europeans had begun to invest but it was still pretty much a Brazilian area. The stampede began around 2004 when EVERYONE began discovering the Brazilian Northeast. Today condominiums, resorts and vacation homes are going up as quickly as a wild fire. And the building never stops. (When I came here in 2001 there were only 125 skyscrapers, today there are close to 700; the population was 1.2 million, today it is 2.4 million.)
Anyone who thinks they can outsmart a Brazilian in Brazil had better do some rethinking; it won’t happen. For one thing, Brazilian bureaucracy is known throughout the world; only a Brazilian can get through it. Secondly, when you sign your name on the dotted line, the Brazilian developers and investors have utilized such excellent lawyers that it is almost impossible to get out of a contract or have your money returned. Third, the laws are so different, the procedures so complex and the practices so unique to Brazil that European or North Americans are like fish out of water. That doesn’t mean it can’t be done; what it does mean is that you need to do a lot of research and investigation before you actually buy, whether for investment, a vacation home or to live full time.
The property you buy might not be deeded to the seller; it might belong to someone completely different. It is very expensive in Brazil to register deeded property from one owner to another so some people decide not to do that. They exchange a Contract of Vendor, a piece of paper which they hold on to until they’re ready to sell, then they use that paper do the same thing; sometimes this paper can change hands four or five times without ever being registered. The real owner may never get involved; however, there may come a time when the deed holder will want to either sell the property or take ownership. Since they own the land, they can legally confiscate or sell the property. If you have just built a $250,000 house on the property, you have given the property owner a nice beach residence free of costs. And, it’s perfectly legal. ALWAYS GET THE DEED TO ANY PROPERTY YOU BUY, even if you have to pay a little more; and no matter how good a deal it might appear, don’t buy ANYTHING unless you do get the deed!!!!
Don’t buy property over the Internet; take the time to fly to Fortaleza and look at the property. I have heard many, many tales of people who have bought over the Internet without ever looking at a piece of property only to find out that (1) the property was overpriced by thousands of dollars, (2) the development was never completed, (3) everything was tied up with legal problems and may never get finished, (4) the developer either didn’t own the property or (5) the Brazilian Government stepped in and declared that no building could be done on that property for one reason or another. (This is particularly prevalent with beachfront properties.) If you’re going to invest $100,000 or more, at least do a little investigating; an airline ticket is a good investment.
Always use a reputable real estate broker. Ten years ago, when aircraft landed at Pinto Martin International Airport, the lobby was filled with prostitutes waiting to meet the flight; today it’s filled with “real estate brokers” willing to sell you whatever you want…at whatever price you’re willing to pay! Everybody has a cousin or a friend of an uncle or someone else who is in the business; they will become your “best friend in Brazil”. Don’t believe it…they’re out to get your money and they don’t care about you. You will become their best friend while they’re trying to make the sale; once you’ve signed on the dotted line, they forget you! There are good, reliable, honest realtors in Fortaleza who will try very hard to present an honest deal. That’s not to say that they will sell you something for nothing; in Fortaleza, everything is a seller’s market. But you can buy smartly.
Always have an honest, reputable lawyer help you with any piece of property you want to buy and make sure the lawyer views all paperwork before signing anything! Let me repeat that: ALWAYS HAVE A REPUTABLE LAWYER LOOK AT EVERYTHING BEFORE SIGNING ANYTHING! I won’t try to go into Brazilian laws; there are so many of them that you have to be a lawyer to understand them. As I said earlier, contracts are ironclad and always written for the benefit of the seller; get a lawyer involved anytime you buy anything. You will find this practice to be extremely beneficial to you in the long run…and it might even save you from making a mistake later.
Take the time to investigate what you are buying; ask other people, check the papers, etc. Most properties are overpriced; in addition, many times there are two prices…the price the Brazilians pay and the price the Gringos pay…and they are different! If you can find a Brazilian to negotiate for you, it is the best way to negotiate; otherwise pay close attention to all the details before buying anything.