Bulgaria property news and articles

Before buying a property in Bulgaria it is advisable to have a survey carried out, which will give you information about the physical condition of the property, any major repairs which are needed, obvious structural faults, and perhaps an overview of any repairs that might be needed to bring the property up to modern standards (e.g. installing electricity, water and heating systems).

In the UK most people are familiar with a survey being carried out for mortgage purposes. This involves no more than a visit to confirm that the property is worth the value of the mortgage. The next level up is to have an intermediate survey, which will delve more into the physical condition of the building, finally a full structural survey will involve a fully qualified building surveyor looking into every nook and cranny, and giving you a full written report. A written survey can be provided in Bulgaria and is normally referred to as a structural survey, though they can vary widely. There are no standard surveys for house buyers in Bulgaria. Ask your Bulgarian real estate agent to appoint a qualified engineer or architect to produce some form of written report, which should:

•  confirm the plot size.
•  confirm the house area and room sizes.
•  give the condition of the house foundations.
•  give the condition of the house walls and floors.
•  give the condition of the house ceilings.
•  explain the basic construction method of the house.
•  list details of any cracks or indications of damp or damage in the ground level or roof of the house.
•  find out the condition of basic systems - water and electrics including the heating system.
• find out about any deformations, subsidence or movement.
•  recommend repairs needed for all above elements.

The report should be signed off by the qualified person who has carried out the report, and translated for you. It should cost around €450 for a full structural survey. Most Bulgarian property buyers choose a simple inspection visit with only a verbal report, which can cost around €75.

The above sets out best practice, and there will be many people along the way advising you to cut corners. Very often people buy a property in Bulgaria because they fall in love with a house and its surroundings, giving only an afterthought to its actual condition. This is fine, but it’s worth a few hundred pounds on top of the purchase price to know what you’re getting into. The report will form the basis of any subsequent renovation and reconstruction works, so it is money well spent. The survey is also an excellent negotiating tool when making an offer or negotiating a price. If significant repair works are noted by the surveyor, you can try to get the seller to knock a few hundred or thousand euros off the price.

A local surveyor has the advantage of knowing the style of buildings in your area and what problems to look out for. There are several vernacular styles of traditional buildings - the tall stone houses of the Rhodope mountains differ greatly from the stone and earth buildings of the central Stara Planina mountains. A local surveyor will know what to look out for and how easy it is to remedy any problems.

Local knowledge is also important to understand the ground conditions, which are often the cause of subsidence (or earthquakes).

Which Nationalities Are Buying Property in Bulgaria?

According to recent research, the top five nationalities buying property in Bulgaria are the British, with 55 per cent of purchases, followed by the Irish with 18 per cent. Behind this are the Dutch (5 per cent), Americans (3 per cent), Germans (2.5 per cent) and Italians (2.5 per cent). So the property invasion is definitely a British-led phenomenon, reflecting the importance of property investment to the average Briton. The overall northern European dominance is likely to reflect the value that buyers place on a warm climate.

In our experience, about 20 per cent of property deals in Bulgaria fall through. This can be for various reasons, such as the property sellers changing their mind or there being legal problems or a bad survey. It is always worthwhile when house hunting in Bulgaria to bear this in mind and have a second-option Bulgarian property to buy. It will also help with the negotiations for your preferred house.

If you find a property that  you like, you can put in an offer, as it is a common practice in the UK. Typically in the United Kingdom there seems to be a built-in tradition of making the offer around 5 per cent lower than the asking price. This is not common practice in Bulgaria.

You may find you can get up to 30 per cent off, but in most cases you get very little. In fact what often happens if you accept the asking price is that the seller puts the price up, thinking that you are keen to buy and would pay more. The best option is to offer something just a little under the asking price. Always check what price will go in the notary act, because this can have serious tax implications or might not depending on how did you transfer the funds to Bulgaria, just make sure you discuss this matter with the real estate agent or your solicitor before you proceed with buying the property.

When buying a property in Bulgaria, consider all the costs involved in addition to the agency fee. These can come to quite a high amount. Allow at least 4 per cent for all property taxes and the notary fee. Legal fees can add up to around €2,000.

Finding a property in Bulgaria by yourself

You are only in the country for a short time, you are strongly encouraged to use a Bulgarian real estate agent to help you find a property, but if you have more time on your hands then you might consider trying to find a property yourself. In fact many Bulgarians do not use agents but instead rather informal methods of selling their houses. In this way you might come across some real bargains, because agents will generally try to get the highest price possible to optimize their commission. You will need to engage at least a translator to assist you with this matter. Try reading the classified ads in the local papers (often this is how agents find their properties!). Make friends with some locals and ask them for some help. Probably the best way, in villages, is to visit the local mayor.

Interpretation and Translations

If it’s your first time using interpreters, it can be a slightly confusing experience. First be aware that it’s a hell of a tough job to stand between two people and communicate between them. No doubt you’ll have lots of questions, but try and keep them brief and to the point. Avoid colloquial English, which is unlikely to be taught in schools abroad. Remember that English when taught abroad is normally of the BBC English variety so if you happen to be the owner of a strong regional accent (especially Scottish) it is worth bearing in mind that your translator may need a bit of assistance in understanding you. It’s a good idea to have a notebook, and list your questions and maybe get confirmation of anything you have agreed back at the office later.

Bulgarian property prices

The price of a property is normally decided by the owner and given to an estate agent as the price at which to advertise. Some owners have an annoying habit of changing a price (upwards) and not informing the agent until the moment they have a client to view.

Sometimes the price varies according to whether the seller wishes to put the real price or a lower price into the notary act. A lower price reduces the seller’s capital gains tax, and the buyer pays less property purchase tax - but then inherits a potentially higher tax bill later on unless he or she also sells on with a low price.

Bulgarian real estate agents’ fees

Generally speaking, agents charge both the seller and buyer a commission. The typical commission is about 3 per cent of the sale price. Some agents operate on a minimum fee basis rather than a commission. This is reasonable where the purchase price is very low and the 3 per cent commission does not make it viable for an agent to sell the property. Some agents charge extra for arranging the legal work on your behalf, and their fees typically vary from €450 to €2,000. As mentioned earlier, some can also arrange property management, lettings and building works.

Real estate agents advertising ‘no commission’ will be taking a cut from somewhere, so ask about this. Normally they add an amount to the price of the house - and this is usually more than the standard 3 per cent commission, so you end up paying more. Be aware that some agents who quote very low fees may be making their money by increasing the property price for foreign buyers. There is a practice for a property to be offered by a local for €75,000 but the unscrupulous agent advertises it for €120,000. The deal is completed at €75,000, which the seller receives, and the agent pockets the other €45,000 unbeknown to seller or buyer. The only way to ensure this is not happening is to check prices between all the agents, since properties are often held by several different agents, and to make sure that the real price paid is put in the notary act. However, bear in mind that some variations in price can be a result of sellers not telling some agents they have put the price up, or may be due to changes in the exchange rate.

Sometimes there are ‘viewing charges’, which can be based on distance travelled, the number of properties to be viewed or a flat rate for the day. Although this may seem strange, it should be understood that sometimes the properties hat people are visiting can be up to 100km away from the agent’s office. The viewing fee is also used to deter time-wasters.

Some agents will make you sign a contract that, if you view a property through them, then if you wish to proceed with the purchase you are required to do so through that agent. This is reasonable, because there are some people who use agents simply to find property and then go behind the agent’s back to buy the property using their own lawyers which is not genuine.

Meeting agents at property shows and through seminars is a popular way to buy, as developers and agents are gathered under one roof. Be aware that some of the developers at these events are selling their own product direct to the buyers, and not using any agents. They will therefore have a vested interest in presenting their product in the best possible light. This in itself is not a problem, but you would be well advised to judge the selling material with this in mind, and always insist on using your own independent lawyer or and agent to undertake the conveyancing for you.

Several agents will also be available at overseas property events. The events an be a useful way to meet agents and begin the process of pre-travel preparation. Be wary, though, of agents who organise your trip and then try to stop you seeing other agents, or who in any way restrict your ability to shop around. Some of these agents will put you up in a hotel, fill your days with activities, and even tell white lies about other agents to prevent you from going elsewhere. It is important to keep in mind that you are looking to buy a property and get the most for your money, as soon as you find something that you really like and the price sound okay to you then that is your property. If you keep looking there is a good chance to end up going back home with no clear opinion about which property you are willing to buy. It is important to know that there will always be a better option somewhere out there so if you like it buy it!

Although the outline of buying a property in Bulgaria may be the same in principle as buying in the UK or elsewhere in the world, there are certain local differences which may make viewing properties a bit more fun.

Main highways are pretty good, but the rural road network tends to be older, with more potholes and in some rarer cases even without tarmac. This means driving is slow over potholes and bad road surfaces. It is rare that the agents will be in a four-wheel drive. All this makes for a fun and bumpy ride on the smaller roads. Map-reading is very difficult as you jolt around the vehicle.

Advice: sit back and enjoy the view, and locate internal handles if possible!

Driving Techniques

It may be no surprise that, as in most of southern Europe, the Bulgarians adopt a less than cautious approach to driving. High speeds, dangerous overtaking and sharp movements to avoid potholes all make a Bulgarian viewing trip much more exciting than a trip down Putney High Street in a Foxton’s Mini Cooper. Good agents teach their drivers that British clients prefer to stick within the ; speed limits. However, some phrases might come in handy: ‘Pobavno’-'Slower’; : ‘Boje Cospodi’-'Oh, my Cod;

The weather

Hot summers with temperatures up in the high 30s can make viewings physically tiring. Bring a bottle of water and a hat, factor in some breaks, and even consider viewings from early mornings until 2pm. Then stop and leave the afternoons to ponder what you’ve seen.

Remember the young person showing you around has to smile, and translate, and at 38 degrees in the shade this is not much fun. Even estate agents can get sunstroke.

Finding Owners and Keys

Unlike in the UK, it is not common practice for owners to leave the keys with the agents. Unfortunately this means the agent will have to locate the owner - or a key holder - to arrange your viewing. This cannot always be done at short notice so you may need to be patient. Owners are sometimes in other towns, lose keys and turn up late, so be prepared for things not always to go according to plan.

Viewings with an Audience

When the owner of a property arrives to let you and the agent into the house, it is not unknown for other family members to turn up and watch you viewing - It is also helpful always to see agents locally when you arrive - you will need to rely on them for your house purchase, not on the sales staff paid for one - or two-day events in an overseas property show in London or Manchester.

Sometimes even several members. Together with you, your partner, an agent, a driver, one family possibly of several generations and a couple of neighbours thrown in - and you’re viewing with an audience. The best thing is to act politely, smile and say something like. ‘Ooh this is nice.’ Look respectfully at any old photos on the wall and don’t jump up and down on the double bed.

Alcohol

The seller may give you some of the garden produce as a souvenir of your viewing and to show hospitality. It is polite to accept any cherries, tomatoes, cucumbers and other consumables you are given, but try to avoid consuming more than three glasses of rakia at one viewing. While this certainly ensures that subsequent viewings are more fun, it may impair your judgement.

Old Houses

Older houses in villages can provide fascinating glimpses of time gone by. They are often part of a small holding where animals and people lived in a single compound. Old farm implements are nice to keep and restore with the house. The oldest houses are constructed of stone, with an oak timber frame and a wattle and daub-type infill. They make fascinating renovation projects. These houses may be very old, with overgrown gardens, and possibly devoid of human habitation for several years. So leave the posh clothes at home and dress for a country walk.

What’s Included and What’s Not

There is no standard guide about what is included in a house sale in terms of fixtures and fittings. Some sellers are happy to leave all the furniture, others want to leave only some, and this needs to be negotiated. Some take everything - including light fittings, switches and even boilers! So make sure you are aware of exactly what is included in the sale. If there’s anythingyou want them to leave behind, ask if it is possible to negotiate this in the price. One house-buyer was made to promise that a photo of the seller’s grandfather would remain in the house, as he’d lived there all his life!

Distance

If you select four or five properties to view, you could be covering many kilometres in the course of a day. Distance is a function of time, and 30km of rural road is quite different from 30km of highway. Make the most of the time by assessing the location, and stopping off for a tea break now and then with the agents. A full day’s viewings might get you round five or six properties at the most, including travel time and viewing time, plus a lunch stop.

The agents that do the nitty-gritty work are those based in Bulgaria. They source and process the deals. Most estate agents in Bulgaria will be Bulgarian-registered companies owned and managed by either local or foreign nationals.

There are some British-owned and -managed companies in the UK offering properties in Bulgaria, but these are normally working in partnership with a Bulgarian agent who does the day-to-day work. Some of the British agents might have direct links with developers and not use local agents.

You will also find that one or two of the bigger Bulgarian agents have branch offices in the UK. There are no set rules about which form of agency delivers the best service. Estate agents are not licensed or controlled by any regulatory bodies. What you should check, however, is their qualifications and how long they have worked in the market. You can find many so-called ‘fly-by-night’ operations that have established themselves on the market to take advantage of unenlightened foreign buyers. In a rapidly emerging market you will always get some people giving a less-than-professional service. It seems in the past few years that some British people consider themselves experts and will try to set up an estate agency based on the knowledge they have gained from one or two purchases.

You can buy through the Internet. People do this especially when buying cheap properties, because by the time they have taken their leave from work and paid for a trip it works out cheaper to purchase over the Internet. But buying blind is not a good option. You don’t know whoyou are dealing with, and it is impossible to judge the sense of a location and its surroundings even if dozens of photos are supplied. Good agencies will follow clients’ instructions should you wish to pursue this route, but those same agencies should also inform you of the risks inherent in such an approach.

There are a number of ways you can select an agent. You can look at their track record (although most will have been operating no earlier than 2001). Are you receiving prompt and accurate replies to your e-mails? Are they sending you examples of good offers? Have all the Bulgarian requirements been explained? Have they attempted to understandyour requirements? Using the knowledge you gain from this book, see how expert and open they are about the process of buying a property in Bulgaria. Ask them about their views on putting the real price in the contract (see p.122). Ask to speak to previous clients, visit their offices, and avoid agents that hold all their meetings in hotel lobbies.

Avoid the hard-sell brigade; avoid paying upfront costs and make sure all is fully explained before parting with any money. At the end of the day, shop around and follow your instincts.

Advice About Viewing From an Estate Agent

Irena Punova is office manager for a British estate agency in Rousse and has taken countless British visitors on viewings, many of whom have stepped straight off the plane on their first visit to Bulgaria.

‘When preparing to come and view properties in Bulgaria, think carefully about what to bring. My opinion is that you need a notebook, some cash and a camera. British people often ask about how much spending money to bring. Take only as much cash as you need for everyday needs like food and drink, the I hotel, some shopping - and make sure you have access to cash abroad through an ATM. You are not allowed to bring more than €4,000 into the country in cash - and in any case, you don’t need so much money.

If you decide to buy a property you can open a personal bank account and transfer the funds once you’ve returned home. The camera is important because it will help you remember what you have seen later in the hotel or back home. It will refresh your mind and help you make the right decision. Sometimes when you see many houses it is really difficult to remember which room belongs to which house, where I exactly you saw the unpleasant neighbour’s house and the electricity pole I Take notes during each viewing and ideally have a checklist to make notes on I each criterion that is of importance to you - numbers of rooms, size of garden, I distance to town and so on. Ask the agent for information about your responsibilities as an owner of a Bulgarian property, for example where you pay your utility bills, collect your post and pay your taxes. Ask the agent for the temperatures in the region all the year round, because it can be very different from the I time you are viewing. We have had buyers very surprised that their lovely summer garden became covered in snow for one month.