Other Side of the Property Crisis
Distressed sales. Whilst nobody wishes others bad fortune, this is the time to make the most of distressed property sales and foreclosures (repossessions) to bag a Bulgarian bargain. There is no doubt that the overseas property market, including Bulgaria, has taken a real hammering in the current crisis. Developers are finding it difficult to complete projects and many units remain unsold, those who bought property at the height of the market are finding it hard to service their mortgage and many properties have come onto the market as these owners seek to sell. This all adds up to create a great opportunity for potential buyers.
Already recently Bulgaria saw an Irish syndicate enter the marketplace searching for completed properties owned by investors on the Black Sea coast. The syndicate, Appreciating Assets, launched this buy-back scheme to capitalise on the number of owners needing to sell their Bulgarian property. It came as good news to those who were anxious to sell as it gave these owners a quick way out, albeit they may not have liked the price they were offered. New investors started arriving in the Bulgarian property market during the recession due to the falling prices and the scheme helps fulfill their interest. The company said that they are confident in the long term outlook for the region and are buying properties with the intention of holding them for five to ten years. This is an ideal syndicate for investors and they are only buying completed front line property as these tend to be in higher quality developments and the best location.
If you are seeking a bargain property in Bulgaria, the choice of home is now huge. Many expats who find they can no longer pay their mortgage from rental income are selling up. Prices being asked are 20% less than last year, with studios selling for 30,000 euros and even two bedroom apartments going for 55,000 euros.
Until recently, information about foreclosures and repossessions was hard to come by in Bulgaria. These details were only available at court offices and municipalities and the information usually only came to light a month before the property was due to be auctioned, leaving buyers little time to make decisions. Now, with one click, potential purchasers can find a list of cheap foreclosures on the internet at www.sales.bcpea.org
There are only a couple of hundred announcements at present but information is being updated and more added all the time. All properties on the list are auctioned and the initial price is generally 75% or less of the market value. Most of the listings are in the capital of Sofia with apartments starting from only 30,000 euros in the centre and less on the edges. In the Black Sea city of Varna a two bedroom can be had for 40,000 euros and there is even a villa at an incredible 50,000 euros!
If, during the auction, the property is not sold, then it goes into a second auction, where the price is reduced a further 20%. Be aware that if you are successful in your bid you must pay the total price of the property within seven days.
The auctions are particularly popular with young Bulgarian families who may not otherwise be able to afford a property. Many British and other foreign property buyers have also wised up to the foreclosed homes which are available and are getting in on the action for some great deals.
Those who are in the fortunate position of knowing the manager of their Bulgarian bank, can approach the bank. Most banks hold lists of property which they have repossessed. One of the main advantages of talking with your bank is that you will have time to visit the property before making any decision, something which may be difficult with auctioned property as often the timeframe is very tight. Additionally, if you make a decision to buy a property listed with your bank you can enter into further negotiations with them on the price as they are usually keen to offload properties. They are also likely to be more keen to provide a mortgage for the property purchase. Banks don't want to be landlords, they want cash in their coffers.
A few estate agents are openly listing foreclosed properties. Prime Location and The Move Channel both have half price apartments for sale in Eagle Rock, Beli Iskar, where owners have been unable to meet repayments. A two bedroom apartment is on the market for 20,000 euros and the development is only ten minutes from Borovets ski resort.
NTC International is also listing below market value properties, with prices discounted 20 to 50%. Completed apartments of 73 sq.m. with sea views at Kavarna are up for grabs for just 28,550 euros, making this a price of only 390 euros sq.m.
There are plenty of motivated sellers, both individuals and developers, who need to sell quickly and now is a good time to find Bulgarian property at up to 50% less than last year. It is sad but true that every market downturn creates great opportunities for those who fly in the face of adversity. This could be the chance to pick up the property you are dreaming of at an incredibly cheap price.
Use a distressed sale to get the property you wanted anyway at a lower price
Location is hugely important
Get your own independent lawyer
Get a survey done