It All Starts With a Promise

Buying a home in Brazil is a process that’s unlike anything we have in the US. Sure, you'll run a title search, inspect the property, and sign the deed. That’s all familiar territory. But when was the last time you had to provide a copy of your marriage certificate or divorce decree? And have you ever signed a "promise" to purchase before executing the deed?

Most Brazilian real estate transactions start out with a Promise to Buy and Sell (Promessa de Compra e Venda). Under US law, promises often don't rise to the level of enforceable contracts. But in this case, they do. We’re not talking about non-binding term sheets or letters of intent; these are binding agreements.

The name can be deceiving though. A Promise to Buy and Sell is essentially your purchase agreement. It'll usually identify the property, the price and method of payment, and all other key transaction terms. That private contract will then be formalized in a public deed filed in a Brazilian notary office.

Hence the reason why it’s so important to understand what’s in it before signing. If there’s anything you don’t understand, ask for clarification. If there’s anything that’s incorrect or unacceptable, ask that it be changed.

The transfer of property in Brazil is official only after the deed is filed, which can take time. But with a Promise to Buy and Sell, both buyer and seller can get comfortable knowing that the terms of the deal are memorialized in a legally binding agreement.