Few of the foreign property investors know that one can buy really cheap distressed property in Bulgaria. Moreover there’s a search option, by using different criteria (location, limit by price, property type etc.). The distressed property catalog can be found on the website of the Bulgarian Chamber of the Private Law enforcement Agents. The particular catalog is only in Bulgarian, since it’s generated by all private enforcement agents in Bulgaria most of which doesn’t speak English. However you can use Google Translate service to do a basic translation.
How you can buy distressed property
The purchase process is done by participating in an auction, organized by the enforcement agent. First, you will notice that there is an initial bid price – its 75% of the value of the property. In order to-participate in the auction you need to pay a deposit of 10% of the initial bid price. This deposit is refundable in case you don’t win the bid. The bid offer has to be submitted on paper in a closed, non-transparent envelope by the end of the bidding period.
Winning the auction and transfering the property to the buyer
If no bid has been submitted within one month after the auction was opened, the law enforcement agent appoints new auction date and the initial bid price is dropped to 80% of the first auction initial bid price. Some entities (mainly banks) take advantage of this legal proceedings and hire solicitors to do their best and prevent from other people taking part in the first auction. This allows the banks and mainly high level bank employees to buy really cheap distressed properties. This got harder because of the public distressed property catalog.
On the auction, each offer is opened and the law enforcement agent announces the highest bid. The bidder is announced as winner of the initial bidding. If some of the attending bidders decides, they can bid verbally on the top of the winning initial bid. Further verbal bidding can be done until there is only one winner.
In the end the law enforcement agent announces the winner and reminds them to pay the rest of the bid price in one week term.
Normally, solicitors are hired by property buyers in order to bid on the auction on their behalf. The solicitor is familiar with the procedure so the bidding process will be smooth and favourable.