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Buy, Hold or Sell?

With the global credit crisis, some Bulgarian property owners are questioning whether it would be better to keep their current property or whether it is better to sell. Buyers are also wondering whether now is the time to bag a bargain property in Bulgaria. In a perfect world owners would sell when the prices are at their highest and buyers would purchase when prices have slumped.

Unfortunately, some owners bought with high mortgages and are now finding it difficult to repay them at home, thus are selling.


In the main there is nobody to blame but human nature; the greed to take now and pay later through greater and greater credit has in the most part caused this situation.

Today, we do not have the perfect world, so what are the benefits and drawbacks to buying, holding or selling in this market?

Looking at whether to hold on to what you have or whether to sell, a careful approach needs to be taken and finances weighed. The impact of the credit crunch is far reaching on those who need or want to sell their property, however crazy rumours that the value of your property is about to drop like a stone are exaggerated. There is no shortage of buyers but they may not want to buy at the price you expect or want to achieve.

Can you wait until prices go up again? This is probably the first question to ask yourself. If the answer is yes, improve what you have and weigh up the costs and hassle against the value this will bring to your home.

What if you can't wait? Fortunately in Bulgaria, the slowdown is far less abrupt but nonetheless there are homeowners who are struggling to find buyers. This is particularly true where there has been an over-supply of new build property as the developers can afford to slash their prices to make their properties much more competitive compared with resales. Quality and true frontline properties, those next to the gondola and rural homes are still selling. Talk to agents and tell them if you are prepared to have a "priced to sell" approach. Even though finances are tough in many countries, there are still buyers out there who are looking for a holiday home or a permanent move to Bulgaria, particularly as this country maintains cheap property prices and cost of living.

Who is likely to buy your property? A house in an isolated rural spot with difficult access is hardly going to appeal to young professionals who want nights out. Similarly, an apartment in the busy resort of Sunny Beach is not going to pull in the retired set. Consider the location and condition of your property and ask yourself what kind of people are going to be potential purchasers. Be prepared that buyers will negotiate hard, feeling they have the upper hand right now. There are plenty of buyers looking to purchase who don't need a mortgage and they have the power.

Get the best estate agent you can find with longevity and knowledge of the Bulgarian market. Private property sales are often preyed on by investors who are looking for cheap property to flip. A good agent will usually get you a better sale price and so worth any commission you have to pay in the end.

If you decide to do some major or minor works to your home before putting it on the market, then the question becomes one of whether you will get the money you invest back on the sale. Kitchens and bathrooms make the biggest impact. If the work requires planning permission, this can be a lengthy process - can you wait that long? There is always a "ceiling" (highest price) that a similar property sold for you your area. This price is hard to beat when times are good, so in today's market it would be pretty impossible to beat this now. If the works you are considering would take your property price over this limit, it would be unwise to go ahead.

Capital gains tax also needs to be given some thought. If you are resident in Bulgaria and this is your one sale during the financial year, then there is no gains tax to pay. However, for those still resident in the UK, then the CGT situation needs to be calculated to determine how much, if any, of the profit you may potentially make, you will lose.

Creativity! Why not consider throwing in some "perks". In effect these are a discount but can be disguised in other ways and can be very enticing. So much better than the property languishing on the market for months, which will only make you cut the price anyway. You might offfer a car you have and no longer need or sell the property fully furnished. The list is only as limited as your imagination. Don't appear too over-eager as the purchaser might start to question your motives. If you can do it, as finance is such a difficulty for some buyers, you could even offer to cover their first three months mortgage payments?