Hi all, I have just now sent an email to a company who I believe may be able to assist as they have excellent communications with banks offering BG mortgages, asking them if they can. I'll get back to you when I get an answer from them.

However, I must say that I am not surprised a bank would not include furnishings and VAT, I don't think they would anywhere in the world. All they are interested in is the bricks and mortar so to speak as this is their only fall-back if anyone were to default on payments.

Get back to you later,

__________________
Jain Goodall, Director, Quest Bulgaria Magazine

For owning and buying property in Bulgaria
http://www.questbulgaria.com

Just got a reply.

The person I contacted is Chris Downham of Bulgarian Home Loans. He said this:
"Hi Jain

There would be nothing that can be done with actually getting better valuations etc.

We have this situation with many clients and we always have managed to find some sort of UK based solution.

Usually a further advance, secured loan or personal loan, we look at clients situation and decide the best thing for them (taking into consideration all factors).

The banks seem to be worse than ever and are now happily back tracking on decisions that they previously made.

I'm sure we can help these clients. Cheers, Chris"

If anyone would like to contact him his email is chris@simpligroup.com

His company is UK registered and based. Chris is a great guy and the company has been operating in the Bulgarian marketplace for many years. They are fully compliant with all UK requirements for companies working in the financial sector. I know they have excellent connections with over a dozen banks lending in the BG marketplace.

Please do say that I passed you his details.

Hope this helps and you all find a resolution to the problem.

Best wishes

__________________
Jain Goodall, Director, Quest Bulgaria Magazine

For owning and buying property in Bulgaria
http://www.questbulgaria.com

Hi Jain,
thanks for this but I am concerned that none of this was explained to me when I purchased the property. If it had, I would have thought twice about it. 20% of the property price is a large amount to suddenly finance, and I was not given any breakdown price of the furniture cost (they could have charged anything). It was sold as seen with all the trimmings and i do feel deceived by the agent. How can people make informed decisions when they are not being given all the facts? This whole process has turned into a nightmare and it seems that I just fell into a big fat honey trap, obviously I take some responsibility for this but I thought that I was dealing with a professional company who were trying to help me realise a dream.

Well, yes, maybe you did fall into a trap, maybe not.

I don't know why things aren't explained at the beginning... but then I suspect a property agent in England wouldn't spend time explaining things to foreign purchasers either.

Get in touch with Chris Downham, I'm sure he'll try and help - and probably will be able to.

By the way, does your prelim contract state whether VAT is included or excluded? That will tell you the total price.

Meanwhile, let this be a note to everyone - VAT on the purchase price does not count in bank valuations (it wouldn't in the UK either), nor do furnishings (again they wouldn't count for mortgage purposes either in the UK). The banks are acting in exactly the same way as they would in the UK - bricks and mortar valuation only. So, Bulgaria is no different to the way the UK considers mortgage applications.

I'm sorry you feel you've been deceived but I think the banks are acting in exactly the same way as they would in the UK - bricks and mortar valuation only. So, Bulgaria is no different to the way the UK considers mortgage applications. Maybe the lender should have made this clear? Maybe the agent? I don't know.

But I really hope you get it resolved soonest.

All best wishes

__________________
Jain Goodall, Director, Quest Bulgaria Magazine

For owning and buying property in Bulgaria
http://www.questbulgaria.com

HI Jain

Is there any way that people can obtain figures for what agents' fees are on each property as I've also been told that this figure is also taken away from the purchase price? I'm not blaming the banks or how they operate but |I do think that it is irresponsible of the agent not to mention these extra costs. basically I'm paying in cash for the agents fee without knowing what it is or having agreed to it. This is not the same as in the UK.

Well, you need to ask the agents, just as you would in the UK, as to what their charges are.

What extra costs do you feel are involved here from the agent?

Why are you paying in cash? Do you mean travelling to Bulgaria and paying in cash or do you mean you are paying by bank transfer? If you are paying by bank transfer, do you say on your transfer payment what this is for? If so, this is traceable....

Of course agents fees are taken off valuation by a bank... they are only interested in bricks and mortar valuation - exactly as in the UK

Would you buy a property in the UK without clarifying these things?

Naturally you can obtain figures concerning the price you pay for the property, price yo pay for the f&f, price for estate agency fees........ you only have to ask, simple as that

Good luck

__________________
Jain Goodall, Director, Quest Bulgaria Magazine

For owning and buying property in Bulgaria
http://www.questbulgaria.com

Too late now, I have learnt a lot and would certainly not encourage any of my associates to buy in Bulgaria. There's too many added-on costs that are not made clear at the beginning and certainly not imparted to a buyer when they are paying the reservation fee.

You seem to support this 'lambs to slaughter' hard sell. I am a professional person and I certainly didn't expect to be 'lied' to to get a signature, I was naive and taken in and will have to pay the price but I will try to help others from making the same one. It all comes down to making an 'informed' decision and I made the mistake of relying on an agent to be moderately honest with the facts instead of preparing myself beforehand.

I definitely don't support lambs to the slaughter selling techniques in any profession.

However, I am confused here with what you are saying as surely you have a preliminary contract which details the price paid and shows whether this includes the 20% VAT or excludes it. Also, based on the price in this contract, compared with the "all in" price which the agent gave you, you should be able to deduct the price of the property from the total price and this will tell you what the agent's commission is. It's worth bearing in mind that a lot of off-plan property is sold without the buyer being charged commission by the agent as the developer pays the agent a commission - so maybe you aren't even paying a commission to the agent? Why not ask the agent these questions and also look at your prelim contract again for the details of the price and VAT.

I'm not sure the agent "lied" to you and I don't think from what you say he has "added on" any costs: he probably expected that you knew the info from the prelim contract where the price and VAT would have been shown. Although, even having this contract, I do agree that a really good agent would have clarified the details with you, particularly if they knew you were taking a mortgage to buy the property.

I'm really sorry that you find yourself in this position but hope that the contact I found for you (and the others) can help find a resolution for you.

__________________
Jain Goodall, Director, Quest Bulgaria Magazine

For owning and buying property in Bulgaria
http://www.questbulgaria.com

Hi Jain

Thanks for your replies and advice on this matter. I may be being naieve, but if I have interpreted this right, the valuation will be exclusive of VAT, F+F etc, which is what the bank works off. However, if we were to sell the property say a year down the line, then the price we sell for woudl be inclusive of these items? If so, surley it would be possible to re-finance further down the line to redress the balance. Am I over simplyfying this, or are we making a mountain out of a molehill?

Ya it is unfair but really there isn't a way you can find out. The Deposit and the 30% go to the developer. The developer at a later dates gives commission to the property company. You could alway ask them but usually they may make a joke about it or tell you a lie. Its rare a rep will tel you the truth about this aspect. Sometimes the reps don't know either.

Well you can expect for a off plan development the agent is getting between 15% and 20 % in the emerging markets.
The big companies that host the most exhibitions around UK and Ireland have a lot of leverage because they get people to go on inspection trips, 100's per month. The Developer that give them the highest commission will get preferential treatment as the agent on the ground will also receive a higher cut when they sell.
Big companies get 15% - 20% of the sale price, the rep that you meet at an exhibition will usually get 6% of this and the Sales Rep you meet out in Bulgaria or else where usually gets 12% as well.
In Brazil the commission to big companies is up to 30%.
In France and Spain is between 10% and 15%.
There is always a lower commission on resale properties (built properties). This is why you may be finding it difficult to sell a property after complication, because the property companies would prefer investors to always buy off plan as they get more out of it and it easier to sell 200 units under than one roof than onces completed in different developments.
The development you bought in was 15%- 20% to the property company.