On my last trip to Rio, I had the pleasure of accompanying the complex, yet fascinating process of buying an apartment in that wonderful city. Like anything in Brazil, this is not for the weak of heart, but things happen eventually after many complications and some faith.
I wanted to share some of the important things I learned in just a few weeks and around 15 apartments visited, each of which entailed a new discovery, a new piece of the puzzle.
This your complete guide to buying an apartment in Rio.
Where to Find Apartments?
Most apartments are listed on a website called zapimoveis.com.br (it’s the same one you would use to look for rentals, which is an important point, if you are buying as an investor and want to understand returns). In addition, each real estate company has its own website and listings, but very rarely those aren’t available on Zap. There are other small sites, but the most important one is www.nestoria.com.br that aggregates the information from all these websites. Which leads me to pitfall number 1: multiple listings (to be discussed in the next section).
Another option is to walk down the streets you like and ask the doormen (porteiros) if there are any apartments for sale in the building. They normally know anything that’s going on and may even have the keys to show you the place. This way, you might be able to negotiate the price directly with the owner and avoid the middle men of the agency.
Pay Attention to Multiple Listings:
The same apartment easily be listed with 3-4 different real estate agencies, each with a different price, which may depend on the fee each agency negotiated with the owner, and some kind of sales strategy they may have. For example, we found that JTavares, which seems to be marketing itself as a higher-end agency, normally has the same apartments as other agencies, listed at R$100k more.
Moreover, the information on apartment’s size and home owner association (Condomínio) fees may be different at each listing. Knowing this, you should do the following:
- Look up the apartment in Nestoria (or google) with search term like: “apartamento a venda rua <streetname> , <neighborhood name>. Then try to identify all the similar listings by browsing the pictures . See what is the lowest price listed and have this in mind as the lowest initial price. You can still go see it with an agency that lists it for a higher price, but make sure to tell them that you know it’s listed lower with a competitor
- Verify with the realtor the following info: the correct apartment size (it should be in the official documents), Condomínio fees, availability of parking spot and exact terms of using it – more on parking spots later).
After seeing several apartments, you will soon start to realize that there is a great degree of variance in skills and attitude from one realtor to another. It seems that it’s not very difficult to get a real estate license and the agents themselves don’t make too much money therefore, don’t expect much out of them. One of them very accurately termed his colleagues as “abridores de portas” – “door openers.” Most of them don’t know much about the apartment or owner and just simply read from the paper in front of them, the same information you would get from the online listing. Every question receives the standard answer: “I will need to check.” They also send you the listings that they are trying to turn over, instead of the ones that match your profile, often ignoring all the things you told them you’re not interested in and basically waste a lot of your time on dead ends. They will tell you, however, when you meet them that they are “trying to understand your profile and needs.” Don’t be fooled.
The other interesting finding was that if you decide to make an offer, they pass it to “their manager”, who is the person in charge of negotiating with the owner. From what we have seen, these people aren’t necessary more knowledgable or skilled. They have just been there long enough to earn the status to be able to sit in air-conditioned office and not run around under the sun opening doors. Whenever the realtor doesn’t know something or doesn’t want to answer, they will invoke this imaginary “manager”, who they must first consult.
The best way to deal with realtors is to
a) search yourself for apartments that interest you and send them to the realtor to schedule a viewing,
b) be really strict and persistent on your criteria and ask lots of questions about the apartment before seeing it to make sure that they aren’t trying to sell you a lemon.
c) make sure that your realtor is actually registered and not someone who just decided to show up. They all have a registration number called CRECI – which you can look up on this website.
Once Inside the Apartment
Most apartments in Rio’s south zone are old and not very well maintained. There are new buildings but the prices of apartments in them will tend to be much higher so unless you have an unlimited budget, you’re left with the old apartments market. The actual conditions of the apartment may vary a lot and not necessarily have anything to do with the price of the apartment, therefore the best way is to just see the apartments and do your own math about what they may be worth to you. Apartments are sold as-is and owners are not responsible for taking care of any damages before handing you the keys.
The two common types required renovations are electrical – changing the wiring and increasing capacity and hydraulic – changing the pipes in the bathrooms / kitchen because they might be all rusty, full of leaks, and water pressure may be insufficient. Sometimes realtors will tell you everything has been renovated but a quick walkthrough, a look at the electrical box, at the state of the shower and toilets, check of the ceilings and walls for stains can tell you the real story. It seems that wiring is not too expensive to do but hydraulic, depending on number of bathrooms and configurations may add up costs, because it requires breaking walls and redoing the tiling.
Some apartments may be completely destroyed and the realtors will tell you can renovate everything quickly for like R$30k, which is of course a lie. Renovation can take months and it’s not cheap.
Cost of renovation will depend on apartment conditions and your personal tastes, but if it requires more than the basics, the total bill can easily add up to more than R$100k for a 2-bedroom, 80 sqm apartment. This is an important factor to consider when evaluating the sales price.
Look for Sources of Noise
Noise can come from different sources and realtors will always have an optimistic explanation why the apartment is such a great deal. One apartment we saw, was on the 6th floor of a building adjacent to a school. We could hear the noise of the kids playing in every single room, even when all windows and doors were shut. The realtor was trying to convince us that it’s not a big deal if we just installed sound-proof windows and kept them shut during the day. Another apartment, had its ground floor windows facing a very busy street, which according to the realtor, was not a problem as long as we spent time in the interior-facing bedrooms.
Elevators in some buildings can be really loud and if one’s apartment is located near such elevator, be prepared to constantly hearing the relevant sounds at all times of day and night, especially if it’s a building with many apartments.
Some apartments may be close to a favela, which in itself is not a big deal, if it’s pacified. The problem is that almost every favela will have Baile-Funks, which are big block parties. EVERY SINGLE WEEKEND, until the early morning hours. Unless you’re a big party goer, this becomes a huge nuisance and will certainly affect the resale value.
Understand How Much You Really Care About Having a View
A typical “selling-point” we have seen in some of the listings is that the apartment is very silent and facing the “fundo” / back of the building. This can be a great benefit but more often than not, we saw apartments that have a view of the wall of the building nearby, or even worse, the view of the windows and the insides of the apartment in the next apartment block. Others have views of the internal ventilation area of the building, which aside from being depressing is a another noise hazard, because you will hear the echo of all the conversations of all the other neighbors whose apartments are facing this area.
We saw one apartment that was well located and “in a really great building”, that had a gym, pool, exercise areas, playground, restaurant, hair salon, etc etc. It only had a small problem: a little favela of 10 or so houses that formed near it. Well, when you opened the apartment window, you would be looking at the toilet area and other houses of this favela, that was located about 20 meters away. It could be a great opportunity to make friends but forget about any kind of privacy. The realtor suggested that if we put curtains, we will be able to “hide” the part of the favela from the view.
To help mitigate: from the pictures in the apartment listing, sometimes it’s already possible to identify such apartments and verify with the realtor.
Empty versus Occupied Apartments
Normally, it’s much better to see an empty apartment because you can better evaluate its conditions and identify potential problems. However, it’s not always possible and we found occupied apartments kind of a pain. First, because people had A LOT of stuff, and it was hard to understand the size and potential of the apartment. And second, because they seemed paranoid about us stealing something so they would follow us everywhere and won’t stop talking about their lives instead of properly showing the apartment.
The silver-lining in having the owner around is that by asking the right questions, you can get some information about their chances of being a crook and also understand their current financial situation and flexibility to negotiate. They might also be able to clarify information about the apartment, which the realtor may not know.
Pay Attention to Illegal Constructions
Some owners may decide to close of part of a the building’s courtyard that is adjacent to their apartment, thereby extending the livable space. This is normally marketed by the realtors as a great opportunity/benefit. This however, may turn into a problem because you may be forced to “legalize” the extension and won’t be able to close the transaction on time or have to deal with extra costs and bureaucracy in te future. So pay attention to those charming courtyards and balconies.
Parking Spots are a Commodity
Having a parking spot is kind of a big deal because many of the older buildings come without garages and street parking is scarce. Even if you don’t drive, it can be advantageous to have a spot because you can always rent it out for a few hundred reais. However, it’s important to understand the terms and conditions. Generally, if the apartment has one, it will be in the official documents (“escritura”) and specifically assigned to the apartment. Sometimes, there is an unassigned but guaranteed spot in the building’s garage. A third situation we saw was a waiting list for which one could sign up and EVENTUALLY get a spot. This option is clearly worth a lot less.
- It’s important to understand the exact terms of the parking spot and not just trust the realtor’s word of the apartment having a spot.
- Realtors try to make out of a parking spot a bigger deal that it really is in order to keep the high price of the apartment. So do your one math of how much extra it’s worth paying for an apartment if one could rent a spot for R$200-300 a month.
There are many great details yet to follow but I will save them for part II which will cover the charming legal and bureaucratic aspects and the price negotiations process. Thanks for reading so far!