In recent years, the real estate market has been developing constantly and, according to most data from the industry, dynamically upwards. Every day in Plovdiv there are dozens of ads for new homes or the construction of new plots, and buying a home is one of the most important financial decisions a person can make. Whether it's choosing your first home to own, one to rent out, or to resell in the future, the process can undoubtedly be fraught with challenges and hidden pitfalls that can lead to costly mistakes.
Today's article was created in partnership with one of the leading real estate agencies in the industry under the hills - Seven Hills. They are a team of young and ambitious people whose goal is to help each of their clients find the desired home. Among their values are deep professionalism, work ethic and reliability, so you can always trust them to work for you and make your dreams come true. Together with one of its managers - Samuil Spasov, we were able to distinguish 5 potential risks that you should pay attention to when you decide to buy a property that’s being built:
1. The obligations of the builder, related to putting the building into operation and their commitment to specific deadlines for the so-called Act 16
A significant part of real estate transactions is carried out during the rough construction phase, due to the lower value. In these cases, you have a greater choice in terms of floor, facing direction, distribution, and also to carry out some internal changes agreed with the building designer. Subsequently, however, in the construction process, there is often a clash with the investor due to the delay in the issuance of Act 16 and the use permit - one of the most important documents.
Here, the conditions for concluding the preliminary contract of sale must be approached with great care. You should look out for these things: when ownership of the property is transferred; any additional stipulations for associated penalties in the event of schedule delays, which are more often symbolic; to specify the payment scheme.
If necessary, always consult with a lawyer and/or your realtor so that you can go through the process with understanding and without negative emotions.
2. Construction and installation activities related to the building
During the investor sales process, you may often come across discrepancies between the project, architectural designs and advertising renderings that are presented to clients and the actual implementation by the builders.
Compliance with the sanitary minimum of the Bulgarian Institute for Standardization must be tied to an appropriate price of the property, and any other additional "extras" must be based on a contract with the contractor to be presented to the client. It is a good idea to specify and write down in advance all the upgrades you have planned for the home, as well as the final price at which they will be carried out. Any more luxurious finish described on the website or presented to the client with a visualization should be consulted with a broker, lawyer or independently to really confirm that the work done corresponds 100% to the project. When in doubt, always ask for supporting documents to avoid misunderstandings later.
An example could be promises such as the construction of connectivity to the thermal power plant and the actual possibility and availability of capacities, installation of a higher class of windows or sound-insulating/heat-insulating material.
3. The moment when ownership of the land is transferred to the home
In theory, this is not necessarily required in a preliminary contract, but it is good to transfer the ideal parts of the land in a timely manner, or if there is no way - to actually check the reason for not doing this. In this case, you can again get help from a trusted lawyer or broker.
Here, the danger is of the land being used for a new construction project at a later date, and the inability of the buyer to oppose this, since a permit has already been approved and the developer at that time still has his rights over the land.
4. The binding of the buyers with a house manager company, a subsidiary of the builder in the notarial deed itself
The purchase price of the property is only one part of the financial puzzle, and hidden costs can surprise buyers. Something that is not discussed as heavily are the fees associated with the maintenance of the property and its adjoining common areas. Very often, under the pretext of having control over good faith performance, the investor makes it a condition when purchasing the home that a maintenance contract be signed, whereby they assume full control over the determination of the fees related to the common areas. Pay attention to what period it is for, whether the company can subsequently be changed by decision of the general meeting and for what period the fixed fee is and how it would be determined in the future.
5. Corporate indebtedness of the builder and financial ability to complete the site
Do research on the property to make sure there are no outstanding liens, disputes or legal issues related to the property. A good way to check the financial stability of the builder is to verify the company through lending banks and see whether the company appears on their approved lending lists.
Another more standard way is by checking the Commercial Register, where information on the presence of investment credit, old company reports and other accounting documents can be freely found and can serve as proof that the company is stable.
Although it may seem like a long, stressful and pitiful process, buying a home can go smoothly if you choose a good agency to work with and settle on a stable construction company with many completed projects over time. Do not hesitate to ask questions and request documents, and always approach the information provided with care, and when possible, consult with experienced professionals.