Trying to buy the School (part 1)

Nearly 15 months after making the decision that moving to Bulgaria was the best thing we could do, we were finally at a point where a suitable location had been found. This was fortuitous as I had been thinking that if the House Hunting Trip to End All House Hunting Trips had not been successful, we would have had to think again.

Me as a confused person

It is a challenging process, trying to buy a house, even at the best of times and it is far far harder when you don't live in the country you are trying to buy in and can only visit for two days at a time every couple of months. I had made the decision that I was not going to do another house hunting trip (as they cost money which could go into the pot to be spent on any purchase) and would change tack by still going at the same time, but renting so all day every day could be spent just house hunting.

Thank goodness for The School as this plan (while sensible) did not appeal at all.

Upon arriving back in the country and making the decision to go for the school the first thing I had to wait for was the decision on the new minimum price that the Obshtina was setting. At the same time as requesting this I also asked for the plans (Skitza, mainly) so I could prove to myself that I was not being led up the garden path with all this.

There is something a little uncertain about starting a process like this; while everything seems OK you can never be 100% sure that the person you are dealing with is not trying to con you in some way. Asking for documentation is the first of a few things I would suggest that you always do before parting with any money at all as, if you send cash and then they don't have the docs, the likelihood is you will not get the money back.

Hey!!! Give me my money back!

In my case Georgi responded within a day with the documents I asked for, and also sent me a really helpful and clear explanation of the bidding process. In this I can say that at every stage of the process Georgi went above and beyond to explain anything I asked him, replying quickly and with clear answers. He was excellent.

Below (and forgive the length of it) is Georgi's email in full explaining the process.

"I am sorry you did not have time when we viewed the property so I could explain you how it works with government auctions but I will do my best to do that via emails!

It is quite complicated and different procedure than normal open auctions in Europe or EBay and to understand all details you need to know Bulgarian laws.

All municipalities in Bulgaria have a lot of properties as agriculture land, medows, aparthments, shops, schools etc and day set auctions for them on monthly basis or when price expires.

The vote of the new price for that property has been planned before and it has nothing with our viewing last week.

We are just lucky that happened now, otherwise takes about two months to get up to date price.

How they form the price:

Municipality hires independent surveyor who comes up with report and price.

For abandoned buildings usually that is not market price and it is tax evaluation price (The price you pay annual council tax)

This price is valid for six months and according to the law the municipality cannot sell the property under tax evaluated price.

After six months they have right to change it after new survey.

This price is starting price but also is reserve price and the bidder cannot bid below that.

Open auctions are held in front of commission of 8-10 council members and any one interested needs to prepare a list of about 15 documents required to take part in the auction.

Also they have mandatory bid of 10 % hen auction start and every next bid is 10 %.

If the bidder is only one to the starting/reserve price is added this 10 % and that is winning/sale price.

That is just basic explanation of the procedure and I hope you get it.

Up to date information about that property.

City council has already voted new price yesterday and now there is 14 days period for objections.

New price is ****** Pounds.

That includes:

Price of the property (All buildings and the land)
10 % mandatory bid.
All transfer and notary fees.
Our agency commission to represent you and act of your behalf.

That is the final price you will pay if you decide to go ahead.

To entry the auction you need to pay for entry documents (That also built in the price) and prepare all document.

We do that for you.

Deposit required is 20 % or ******* Pounds.

If you don't win this deposit will be returned.

Auction date will be set after 20th of April.

After winning the auction remaining balanced is required within 14 days.

I also attach the plan/sketch of the property.

Municipality doesn't have any floor plans and I thing the best way is to ask your friend to draw a hand made one for you.

There is no problem builders to go there now as the price is already voted.

If you think is a good idea you can send me the measurement and their price for the work so I can show them to my master builder and see if the work it's not overpriced!

I think that is all for the moment mate."

So there it was and the price was substantially less than originally requested and (with the thought that the renovation work, while extensive, was not quite as total as all the other houses that we had viewed ie needing completely pulling down and rebuilding again) it seemed like a no brainer that we had to go ahead with this.

Further emails confirmed that after 14 days the auction date would be set, you have to be a Bulgarian citizen to bid on Government auctions so Georgi would act as my representative (though everything would be in my name) and I would have to have paid the deposit at least 7 days before the auction occurred.

Georgi sent me a contract to check through which covered the purchase of the property (including in it the full amount agreed) and was very flexible with regard to the suggestions I made for changes (including adding a time limit to the repayment clause).

Contracts need signing

Once all this was agreed there was another decision to make; would I give Georgi power of attorney to act fully as my representative (opening a bank account for me to make the payments to, signing all the documentation at the auction and basically meaning that my physical presence was not required at all) or would I go to Bulgaria for an extended visit to do all these things myself? My decision was made by the uncertainty around the speed of the process; I would give Georgi power of attorney but would also do my best to be present at the auction.

I think I will leave this update off here, as this is getting ridiculously long, and will continue in another post.

Thanks for reading.