Public Auctions – another option to buy cheaper property

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Public Auctions – another option to buy cheaper property

Postby Admin » Fri Feb 15, 2013 2:20 pm

When you’re looking to purchase a real estate in Bulgaria, one of the options available is to do a research online and to contact a local real estate agent, who can offer you properties matching your search criteria. Huge number of the offers for properties on sale, listed on local websites are advertised by real estate agencies, so contacting these and viewing properties with them usually results in signing an agency agreement between you and that estate agent regarding their commission fees and non-refundable deposits for the purchase of the concrete real estate.
With the present article we would like to point to your interest to one new applicable legal option to buy cheap and attractive Bulgarian real estates in various regions. This option is called “Purchasing a property on public auction, performed by bailiffs”. In the last couple of years the number of properties for sale, offered by local bailiffs, has risen incredibly. Within the financial crisis many people (developers, private individuals, speculants on the market) were not able to cover their debts, so their creditors currently are attempting to reduce the losses by selling properties of the debtors on public auctions - for lower prices, only to collect some helpful fresh cash. This is mainly the reason why auctioned properties are on lower prices; other reason is that the most locals can’t afford to bid and purchase in cash; and considering the fact that overseas buyers are not informed about this option, it turns that there are not many competitors for buying such properties – a fact which guarantees the low prices on the auction.
Briefly, the procedure of selling properties of the debtor is performed by the local bailiff on behalf of a request by the judgment creditor, where the bailiff checks and confirms the clear legal status of the concrete real estate (i.e. that there are no burdens, mortgages, etc.) and organizes the public auction for it after an independent property expert has evaluated it and determines the fair market price. In 95% of all cases the start prices for properties offered on public auction are lower than the prices of similar properties on sale at the free market – simply because these got FAIR valuation and because NO commission fees are hidden in the price. Each public auction of one real estate lasts a month, within which period all interested buyers can inspect/view the property and bid for this property, where the bid can’t be lower than its published starting price. Like everywhere in the worlds, each participant in the public auction deposits standard and fully refundable 10% of the purchase price directly to the bank account of the bailiff. If there are no bids for the concrete property, then a new auction is managed with LOWER price for the concrete property. The specific procedure for public auctions determines the advertisements for public auctions of properties to be performed on the website of the Chamber of the Private Enforcement Agents /Bailiffs/ - and also on the websites of each individual bailiff (also on the boards at the local district courts). This explains why you can’t find these attractive real estates on the regular local real estate websites – estate agents can’t get a commission fee for advertising auctioned properties so they are not interested in these at all.
We believe that attention of property investors should be brought for auctioned real estates, because of the following advantages to help you make a good deal:
1) PRICE: In 95% of the cases the price of real estates is lot lower than the market price of similar properties in the area, because got FAIR proper evaluation by real estate expert, hired by the bailiff. The fact that overseas buyers are not aware for these buying options ensures that there are no competitors for such properties and guarantees low purchasing prices via the bids.
2) LESS COMPLICATIONS: All auctioned real estates are with CLEAR legal status, i.e. offered for sale free of any legal burdens, mortgages, claims by 3rd parties, etc. The buyer ALWAYS get a legal confirmation on the above. Here there is NO NEED for signing of any reservation forms, preliminary contracts, payment of deposit/commission fees to real estate agents, etc. You pay only 10% refundable deposit for participation in the auction and this is all.
3) The law determines that there is no commission fee payable to bailiffs, so the price you bid is the price you will pay for the property, if you win the auction. Of course you cover all local taxes, but considering the fact that you are not paying estate agent’s commissions, neither for preparation of Title Deed, it appears at the end that this could be one good deal.
4) The 10 % deposit is really REFUNDABLE, there is no way to lose this deposit and this is legally guaranteed by bailiffs. If you win the public auction by placing the only one, or the highest bid for the auctioned property, these 10% are deducted from the total price. If you lose the auction, i.e. someone else put higher bid than yours, then the 10% are refunded to you immediately.
*Please be aware that if you pay 10% deposit and win the auction, but then fail to pay the rest of the auction price, you will lose the 10% deposit.
5) TIME: The public auctions lasts one month, so it is guaranteed that if your bid is the highest, you will get Title of the concrete property in one month time, without delays by sellers/agents, and without badly surprises.
6) EXPENSES: Agency commission fees do not apply here (these are usually 2-3%, but may reach in particular cases 7-10% from the agreed sale price because in Bulgaria there is no legal regulation of the real estate agency fees). Considering the fact that buyers of properties in Bulgaria are required to cover also all expenses related to the transfer of the ownership /i.e. notary fees, local stamp duty taxes etc./, it may bring at the end of the day 10%-15% on top of the price. It is understandable – as more parties are involved in the process, more expenses are applicable. Together with the lack of commission fee, you will save from legal checks for the status of the property, and for preparation of Title Deed, because the bailiff prepares and gives you the Title Deed document directly. The title deed document is called Decree and is also entered at the local Land Registry just like all title deeds.
7) The local bailiffs are educated in law and regulated by BAR; they have business insurance for damages towards clients, despite of other parties which may offer real estates for sale to you. This ensures that their liability can be easily claimed if needed.
8) All the above entitles you on a later stage to re-sell the real estate in a straight deal without any legal issues or complications.
The participation in the public auction could be personal or via local lawyer. This is why, if you are interested in purchasing properties in Bulgaria via this option, but prefer not to travel to the country for the 1-month auction, better to contact local attorney-at-law, who can perform all needed actions during the procedure on your behalf and make you a legal owner of the chosen property. If you find difficulties in finding a lawyer, or need any assistance of guidance, do not hesitate to contact us on
More information about properties placed on public auctions, you can find in the following section of our forum that is regularly being updated:

Bulgariandeals Team

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Joined: Sun Jul 14, 2013 4:44 pm

Re: Public Auctions – another option to buy cheaper property

Postby Edislaw » Fri Sep 27, 2013 8:26 am

Do I understand correctly that the bailiff prepares a good title and registers it obviating the need for notary, translator and the concomitant fees?

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