Bulgaria is a country where practically every Russian can afford an apartment. On the one hand it‘s good, on the other hand it’s quite dangerous. How not to be left with no money, and no real estate? What nuances should be kept in mind by everyone who thinks about investing in Bulgaria? How much will the purchase and registration of property cost? Antonia Wirth, managing partner of Crystal Realty, a board member of FIABCI International answers these and other questions.

How to move to Bulgaria and not to be left without money

- Your company operates mainly in the southern Black Sea coast and offers luxury housing, commercial buildings and land, including the seafront. First of all, let’s talk about the risks of buying property in Bulgaria, as there have been some cases of cheating Russian buyers...
- Buying property in Bulgaria on the internet, by advertisements and photos, without "live" visits seems to start going into the past. Previously, these ads often lied about area, and the photos didn’t reveal the real state of things. What is going on now? It happens that at the preliminary contract execution realtors don’t say a word about an outstanding mortgage loan. And how can a buyer find out about the loan by himself? Only when he moves into his apartment, he gets a "pleasant" surprise. The seller may declare bankruptcy during financial disputes, and the bank will seize the property that is already yours, but still mortgaged, so you will be left with no money and no property. It is very difficult to help and very easy to prevent. Agree upon progress payment in the contract, and carry out redemption of interest and all significant transactions only with a notary.
Some developers delay putting houses into operation (Act 16) deliberately, especially when they have many unsold apartments. Buyers can not live at their homes, and they have difficulties in obtaining visas.
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"There is one peculiarity of Bulgaria: in the preliminary contract a notary certifies not the legitimacy of the transaction, but only your signature and the contract date. And if necessary, the purchase can be appealed in court"
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Cases when buyers can not register the property are getting more frequent. You find a perfect apartment in Bulgaria in a house under construction, sign a preliminary agreement, pay and wait until the building is finally completed. Usually at the end of the construction work you make arrangements with the developer, go to the notary and sign the main contract. But sometimes, at this stage it appears that this property (and you can already live there) has an outstanding mortgage or other encumbrances, and therefore property registration is impossible.
Sometimes preliminary agreements are signed with different people for the same property. Remember that this is only a letter of intent, and someone else, but not you, can sign the main contract and buy the property. Sometimes it is better to avoid signing preliminary contracts.
Pay attention to one peculiarity of Bulgaria: in the preliminary contract a notary certifies not the legitimacy of the transaction, but only your signature and the contract date. And if necessary, the purchase can be appealed in court, for example, at the request of the bank that provided the developer with the loan for the building. On the other hand, it is important to know for the future buyers that the preliminary contract is an obligation between a buyer and a seller.
- What is the process of buying property in Bulgaria?
- You sign a preliminary contract, then the main contract, pay the fee from 2% up to 3%, and the notary fee of 1% (but not more than €3,700).
Within two weeks after the purchase you apply for a universal identification code, submit tax information and change accounts for electricity, water and other utilities to your name. It will cost about €100. Also you’ll have to re-sign a management contract, if there is any. In complexes it costs from €6 to €15, in "usual" apartments - about €200.
And all of these costs are very low, compared to amounts that the Russians pay in Russia and in Western Europe. So everyone, including Russian pensioners, can easily buy an apartment in Bulgaria and live in this sunny country on their Russian pension.

What, where, why and for what price do the Russians buy in Bulgaria?

- You have been involved in real estate for a long time, and you often come to exhibitions in Russia. What misconceptions is it necessary to dispel when dealing with Russian buyers?
- In general, the Russians think that you can buy a cheap and quality property in Bulgaria only for €15,000-20,000. Of course, you can save money by buying from a developer, but not significantly. Also there are other myths. Some people believe that it is not prestigious to live in Bulgaria or that our country is only for retirees. People still believe that buying property in Bulgaria is necessary and possible only on the Black Sea coast. Yet we hear that in Bulgaria there is no luxury real estate market.
- Why do you think the Russians buy property in Bulgaria?
- First of all, here it is pleasant, convenient and cozy. You can communicate in Russian almost everywhere. For Russian pensioners Bulgaria is generally a favorite place, there is a program of issuing a residence permit for elderly people.
Property in Bulgaria is a good combination of price and quality. Luxury properties in Bulgaria are also available at low prices. We see that the market has reached bottom, and now the upward trend is about to start. Offers at the best places on the Black Sea coast, and especially at seafront are almost over, new construction has some difficulties, therefore, prices for apartments in Bulgaria will continue to grow, however, we’ve been watching this trend since 2013.
- What housing are the Russians mainly interested in?
- Requests range from small rural houses with a plot to luxury houses of 600 sq.m. As for commercial real estate, they also buy everything: from hotels to wineries. The Russians are everywhere and in all segments. They highly appreciate luxury and pleasure, and more and more of them discover the value of "Bulgarian lifestyle", for example, such places as golf course Thracian Cliffs in Kavarna, one of the top-three in Europe; yacht complex Marina Dinevi in Sveti Vlas, one of the European top ten; complexes Sozopolis, Anel, Santa Marina. We receive more and more requests for spa of Bulgaria, such as Sandanski , Velingrad, Hissar, Sapareva Banya where there is the hottest hot spring in Europe and also construction of a Russian center is starting there.
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"The Russians highly appreciate luxury and pleasure, and more and more of them discover the value of "Bulgarian lifestyle"
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Naturally, the most active demand is in the price range from approximately €45,000 to €60,000. The demand for one-bedroom apartments is increasing. More and more often our customers, who have already purchased a home, buy another one for their parents or buy larger houses, with a better location and better quality. Russian buyers are gradually beginning to focus on the domestic market, buying urban property, rather than apartments in complexes where you can live only in summer.
- What nationalities besides the Russians are active in the real estate market of Bulgaria?
- Clients who buy houses and apartments in Bulgaria are mainly residents of the UK, Ireland, Poland, Denmark, and Ukraine. A good demand is from Norway and Germany, as well as Lithuania and Latvia.
- What unusual requests or demands from customers have you received?
- The funniest thing I've heard is when a client said that he would not pay for the elevator, because the Russians freed us from the Turkish yoke. Or they ask to find one-bedroom apartment at seafront for €10,000.

Bulgaria: feeling good!

- In Bulgaria there is a law that provides so-called "golden visa" for buying a home that costs €300,000 or more. Is it difficult to get a residence permit in Bulgaria?
- You get a residence permit and during the first five years you update it annually. You should note that 50 out of 60 months (these five years), you have to spend on the territory of Bulgaria. After this five-year period a foreigner is allowed to get a long-term residency. You should submit an application, documents of payment of fee, passport, documents for property, income statement (not less than the minimum wage or pension) and a statement of the absence of convictions. Then you wait from 3 to 6 months and get a permanent residence in Bulgaria. And five years later you can apply for citizenship.
- And finally, about forecasts and results. What interesting has happened on the real estate market in Bulgaria for the last year? What trends will be in 2014?
- On the one hand, there are positive trends on the property market: prices as properties are getting cheaper more slowly, more buyers return to the market, the number of transactions is increasing. According to the Bulgarian National Bank, in the first half of 2013 the number of real estate transactions has grown at an annual rate of almost 30,000. There have been 110,000 compared to 80,000 for the same period in 2012. On the other hand, there have been some convulsion in the political life of the country, and it inevitably affects people’s economic activity.
We also note a new trend in demand from the Russians: purchase not for recreation, but for moving abroad. The Russians show great interest to buying commercial real estate in Bulgaria. At the moment, the best investment destinations are wineries, food industry properties, retail properties, shops with Russian goods, restaurants, hotels and land plots on the seafront. Purchase of children's holiday camps, investment in health and IT industry can also be called attractive.