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How to buy with a proper discount

Discussion in 'Bulgaria Property' started by e.motion, Jul 26, 2007.

  1. vthills

    vthills New Member

    not me :D not me
     
  2. e.motion

    e.motion Banned

    Please see.

    Please see the beginning of the Forum post. And then say on which side am I.
    And stop being so nasty. I'm just a regular guy, that wants to do buisness with the right people. And yes the investor is going broke he is overstretching trying to invest in lots of new property, but he is forgeting that things don't usually go his way.
     
  3. vthills

    vthills New Member

    "Ohh and in some of the cases in my complex the builder is not making any profit at all. The building cost PSM i around 440 euros."
    That's pure bull****, man, building in bg is so cheap that it may be even less than 100 euros...what are we talkin about...
    -------------------------------------------------------------------------------------
    The Official Veliko Turnovo Hills Website
     
  4. Jain and Chris

    Jain and Chris Senior Member

    I think both vthills and emotion need to calm down. Clearly they are both on here as agents / developers / middle men... to sell properties they have on their books in some way.

    I agree, I am sick of this Apart from coming on forums pretending for the most part to be on the buyer's side, they are doing a disservice to other agents. Not to say that other agents don't do the same.

    It may come as a surprise to agents, particularly including vthills, emotion and sash solutions (aka galina), that the majority of buyers are pretty much aware of what you are doing and your underhand ways, so will usually discount you.

    The worst of all this, though, is that there are some souls out there who will take you at face value, and you know that which is why you operate the way you do.

    This whole modus operandi is only giving Bulgaria a bad name. Why you should seek to destroy your living, which comes from people buying in Bulgaria and wanting honest opinion and advice, goodness only knows.

    Rant over :)
     
  5. e.motion

    e.motion Banned



    Applause... But anyway... I don't care. SEE THE ******* BEGINING OF THE ******* ARTICLE.
     
  6. geordie

    geordie New Member

    As e-motion says see the beginning of the thread and how it started, which was e-motion banging about potential (supposedly real) discounts. In particular they raised the possibility of buying through a company and the fact that investor can reclaim VAT by buying through a company, which I believe is misleading benefit that I have to take issue with because it is not as clear cut as they outline. In the event that the company makes a profit (which I very much doubt is going to be possible in Bulgaria) the investor will be hit twice by tax, which eats up the benefit of doing it this way in the first place. First the company gets taxed on the profits it makes, then when the investor takes the remainder of the profits as a dividend they will be taxed on their dividend. So the VAT benefit is eaten away in tax. At the outset investors will also have to stump up the additional costs related to the set up of the company. Granted you can take certain costs off the taxable gain, but at the end of the day it is not as simple and clear cut as you have made out. But, then again nothing is simple in overseas property because it is an unregulated market that is not policed by a financial regulator so agents can spout these spurious claims without fear of being reprimanded. It is just another example of why investors should not take anything agents say at face value and always take legal and tax advice on their investments.

    Geordie
     
  7. e.motion

    e.motion Banned


    What DO YOU know about Bulgarian taxes and laws. And do you know that you can put your own company into debt to you and not pay taxes at all. HIRE A GOOD LAWYER.
     
  8. Jain and Chris

    Jain and Chris Senior Member

    e.motion

    Less aggression please - and get caps lock off, as it just feels as if you are shouting.

    Geordie makes a good point. It is not suitable for everyone to purchase through a company. It depends upon the individual’s needs and situation of the buyer.

    He also quite rightly points out that there is no regulation in the Bulgarian real estate sector and therefore agents and developers can make spurious claims about anything.

    We are doing everything we can to push for regulation in the market and have been running an active campaign for the last five months which is supported by many agents, banks, lawyers, etc who are all anxious that this market is properly regulated and have agreed to abide by a code of practice. At least it is a start.

    As Geordie said, and I whole heartedly concur, always take independent legal and financial advice from professional sources when buying property.
     
  9. e.motion

    e.motion Banned

    Yeah sorry.

    I want to excuse my self for being so ... You know.
     
  10. Jain and Chris

    Jain and Chris Senior Member

    Hi emotion - no worries :)

    You have invaluable input too, everyone does; especially if we all post on here and share the info in a nice way :D
     
  11. geordie

    geordie New Member

    I happen to know a great deal about both personal and corporate Bulgarian taxes and laws thank you very much and have also worked in overseas property investment for a number of years.

    As well misleading regarding VAT you talk about the possibility that the buyer gets a discount by getting a reduction on the astronomical commissions charged in Bulgaria. But this is a discount on fees and doesn't mean they are getting a discount on the property price because the value of the property stays the same irrelevant of commissions. So it's not actually a proper discount on the property at all. If you put it that way then buyers can get a discount by going to other countries where the commissions aren't as high.

    The only way it is possible to buy a property at a discount is if the owner of the property doesn't realise the true market value; if the owner is willing to give a discount because they need a quick sale; if you are stepping into a deal where the someone has pulled out of a purchase but has already paid a deposit/installments; or if you get a discount for buying in bulk.

    Geordie.
     
  12. vthills

    vthills New Member

    yeah, we know :)

    --------------------------------------------------------------------------
    The Official Veliko Turnovo Hills Website
     
  13. najnaj

    najnaj New Member

    Absolutely right, I agree with Geordie. But... you all are talking about cosmic commissions of agencies- 15- 20% ???????? It sounds as a real crime!
    Usual commission is 2-3 % from the overal market price of the property, which means that if the owner drops the price a little bit after negotiations, the commission will be less too. There is agreement between the members of National Real property Association about that. An exception can be made only if you buy something for several millions euros and the commission could drop down to 1 or even half %.
    But if you find some greedy and incorrect company....And again, the biggest resorts are not pleasant place to live or to spend vacation anymore: concrete, concrete, concrete, building sites, noise, rubbish, dust and... very high prices and cheeky treatment!
     
  14. e.motion

    e.motion Banned

    :|

    Still a funny guy ....
     
  15. Dia Soleado Invest

    Dia Soleado Invest New Member

    if it sounds too good to be true...guess what...
     
  16. Jain and Chris

    Jain and Chris Senior Member

    Rather lengthy reply, but here is my two stotinki worth -

    “lets say 125K euros for a nice one bedroom, with views”

    I presume for your argument to work VAT is included in this at 20%?

    “How to get the same apartment for 93K. Well first you'll have to find a local freelance agent, (like me) and you would have to ask him to find the property you are looking for. He probably has a list of all the developers, builders and etc. Then you have to negotiate his commission he will take gladly 5% of the property price without VAT”

    so, 5% eh of price ex VAT? Most agents are taking no commission on off plan sales and even if they are, they are only taking a max of 6 anyway.

    “Which you'll would have to pay him cash”

    cash??? So, no receipt for this service, nothing to put against company books if needed and no proof you were ever involved in the deal should anything go wrong as there is no paper trail. And when would this 5% be paid to you please?

    “Then you have to ask around which "Lawyers" are the best, "the best" means that they will ask for the building permits, like permission to build, notary deeds and etc. This is only to insure that the agent is not trying just to take your money on a Phantom company”

    an independent lawyer is a MUST on any purchase anywhere in the world. I suppose you’ll be recommending who the buyer should use? Are you taking a cut from them for bringing buyers to them, as frequently happens in Bulgaria?

    “Then you will have to instruct the lawyer to open a limited company so you can re-clame the 20% VAT back”

    This means of course that you are now a VAT registered company and that when buying the property the developer has declared the VAT and it is also marked on the final deeds. As a VAT registered company you have obligations and would certainly need an accountant to do your books. You’ll also have to charge VAT when you resell.

    “Also you can get another 5-8% if you pay for the property with a Payment scheme of 70-30 or 90-10 or even 100. And if they offer you furniture, deny it. It will lower the price anywhere from 5k to 8k”

    This is providing that you can get a payment scheme (besides, how do you get money back by doing this?) and / or convince the developer that you don’t want the furniture package. Talking of furniture packages, you will then have to source this yourself and get it fitted too. How are you going to manage all that from overseas? Oh, I forgot the freelance agent is going to do this? Is this extra to the 5% and what kind of cut are you taking from the furniture supplier you send all these buyers to; again this is normal business practice in Bulgaria?


    All developers expect buyers to negotiate and you must; I just don’t think the above deal really stacks up as something special and I think if you negotiate hard with the developer (yourself or through any agent) you’ll save just as much as this idea purports. I don’t want to knock anyone who is in business but it’s just expressed in a way that leads you to believe you are saving money.

    Setting up a fully registered VAT company, more work and more hassle. Then, not taking the furniture package - again, do you want to go through this grief - and also what impact will that have on any guarantees the developer gives about the property. We all know what happens when you have a furniture supplier saying one thing and the developer saying another, blaming each other for any faults, then you get caught up in the middle. Etc, etc..

    To make 50% plus “saving” work, setting up a company is required and you have to be a fully VAT registered company, plus agency fees are being stated at 10, 15 or 20%. If you want to set up a company and be VAT registered this is and always has been your choice. Agents on off plan are not charging those kind of commissions. He’ll save you 2 or 3,000 euros on furniture? Payment schemes - well you can get a special mortgage with off plan anyway. What’s happening here appears like a clever marketing trick; saying they are “saving” you money, when at the end of the day, these are not true savings at all.


    I’ve lived in Bulgaria for several years now, seen this kind of thing before, plus have heard from thousands of people about their Bulgarian buying experience. OK, call me cynical!

    All the best, Jain
     
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