Essential viewing for anyone looking to sell their Bulgarian property, this insightful interview exposes the reality of the current resale market and the key points that vendors must consider when thinking to sell their property in Bulgaria. Offering an inside description of the demand coming from Russia and the ex-soviet states, the key differences between what they want to buy and what the British and Irish did buy and now have for sale, through to comprehensive reasons not to pay any agency upfront fees before the actually sell your property.
Solid advice offered by a professional company seeking to allay myths and rumours from the marketplace and provide genuine guidance on the true state of the market. See below a synopsis:
So Christophe, is it actually possible to sell property in Bulgaria right now?
Yes, depends where – definitely in Sofia and Sunny Beach region and with sufficient time and marketing Varna and Golden Sands too. Bansko to a less extent, but occasional sales are still happening there. Sadly no movement in the ski resorts of Pamporovo or Borovets at all and likewise the rural inland areas too are almost static, the best advice for owners in these locations is to find a local agency, not an international firm like us.
We hear a lot of myths in the marketplace about Russians spending a lot and buying up everything available, is it true?
We hear these myths too, our favourite is that somehow Russians are all oligarchs and have millions to spend, that they will gladly overpay for property and are not so concerned with the price. The truth is quite different, the truth is that they are just like the British and Irish demand of previous years; they are middle class buyers with strict budgets all want the best property for the best price.
Occasionally we do get extremely wealthy clients with vast budgets, but they are buying vast properties with it and only pay the market rate. It is not true that Russians willingly overpay, this is a convenient rumour sponsored by agents who charge for advertising.
How are Russian buyers different to any others?
The biggest difference is that the Russians make lifestyle purchases, not investments. On the whole they are not interested in appreciation in value or rental income, they buy holiday home properties to use personally, they furnish and decorate them to their personal tastes and they use them for much of the summer. This is a really very different approach and will ultimately result in a much more sustainable market so its good for everyone. However, it means that a buyer must personally like your property to buy it, the rental yield and the future prospect of the area are largely irrelevant.
You mentioned companies who charge for advertising, is that particularly common?
First and foremost, NewEstate has no upfront fees at all, just like any regular agency we only get paid once we have done our job and found a buyer who actually pays. If we fail to sell a property there is nothing at all to pay. Secondly, our commissions are crystal clear, fixed and agreed in advance so there are no surprises.
Unfortunately there are many companies in this marketplace who are structured to only attract English speaking vendors and not Russian speaking buyers. They promise exaggerated values, which they use to bait owners, then the so called ‘agents’ claim to have access to secret pockets of mythical Russian buyers who will pay more for their properties, but then ask for a 500 Euros listing fee. Sadly this is their only business, they do not actually have any staff or offices in Bulgaria, they have no actual marketing in Russian, they simply pray on English speaking vendors who are in shock and disbelief at the true current values, then take advantage by charging an upfront fee. This is their only business and does not result in the sale of your property, it is a nasty scam really.
What advice have you got for owners who are wondering which agency to use?
If you thinking to sell your property and are wondering who to contact and give your business to, you should put yourself in the shoes of a buyer and assess your chances to sell with any given agency from that perspective. The Russians and those speaking Russian from the ex soviet block will typically search google.ru or Yandex which is Russian’s most popular search engine . Just like you and I they will perhaps type in ‘buy property in sunny beach’ for example, naturally this will be in Russian. NewEstate appears in the first page of results for such searches, we spend at least 10,000 euros / month ensuring that, but those who charge for advertising do not even have websites in Russian, they have no native Russian staff, no active marketing campaigns that buyers can find your property available on, as such listing with them will only expose your offer to fellow English speaking vendors who are seeking agents online in English, not buyers speaking Russian in Russia.
NewEstate has sold hundreds of properties in the past few years, some might say these have been sold for low prices, what is your reaction to that?
We get asked this a lot, especially by owners who bought in the boom years and have not considered the market since, they think about selling so contact us and hear the values of today, which can unfortunately be quite a shock. Like any business, we can only trade at the values the market decides; all our vendors can list their properties with us at any price they decide, we do of course guide them but ultimately it is up to them.
Fundamentally, our role as an agency is only to find offers from buyers in the marketplace and relay them to owners for their consideration, if the offer for cash in exchange for ownership is insufficient then they simply decline and we carry on marketing. Ultimately, the proof is in the pudding; if you have advertised for 1 year and had no offers, but see clear evidence that your agent is selling your neighbouring apartments, then the asking price is clearly the issue, not the marketing or the property. However, it is always the owner’s choice to stay steadfast and hold out for more, which is no problem at all for us, or to lower and entice offers.
Don’t some agents pressurise vendors to lower their asking prices?
The reality is that owners educate themselves on the true values, they do their own research on both us and the market, they decide what is professional advice and what is a sales pitch. I would like to profess that we are so big and so influential that we can somehow influence prices down and thus create excessive cheap stock that is easy for us to sell, but the reality is we’re not in that position and if we were we would have no stock left to sell, which as you can see from our website is not the case. We simply operate on the market level and go up and down in accordance with it, its macro scale economics and far bigger than us or any one agency. Perhaps we come across 2 or 3 vendors each year who contact us and say they desperately need to sell and must have the money in hand within a few weeks, in such situations they are not looking for the maximum market value and we can help connect them with serial investors who do buy such up under price property, but it is extremely rare and maybe true for just 1-2% of all annual sales.
How did you see the market changing looking to the future?
At the moment it is still very much a buyer’s market, there is no shortage of supply as the stream of vendors continues at a considerable pace. The sheer volume of new stock that continues to replenish the market does not encourage market prices to rise, there remains simply too much choice for the fewer number of active buyers.
So if I was looking to resell my property, how should I go about that?
My best advice is to first do lots of research before you contact an agency, try to avoid the hype and misleading information that is luring you to pay for advertising, read through all the news publications and independent sources to see what is really going on in the market. Ignore asking prices, these are often set by owners who have paid for an advert and have no connection to the actual market, you can advertise ?10 note for ?15 with all the marketing in the world, but no one is going to buy it, as such you must look for sale prices only, check the real data. If the agency you are consulting cannot provide you with clear definitive sales data then it’s the first sign they either don’t sell anything at all or very little, either way they are best avoided.
Speak with the agency, make a judgement of their knowledge and competence, if they are uncomfortable with a lot of questions then keep looking for those who are not, there are many professional companies in this market and 30 minutes of Google will present them all to you. Feel free to list with several agencies, but be aware that you will never be their priority if you do; if your agent is good and they know that your property is only listed with them, they will invest extra into getting it sold. Sometimes it costs us 5 Euros / click on Google, so we can spend half our commission before find you a buyer, if we know it will be returned to us then we will naturally be more willing to invest more of our money into getting it sold for you