How to buy a home during a crisis

Crises often involve revolutions. The real estate crisis in Bulgaria has also led to some shifts – developers and real estate agents have admitted that buyers are dictating the rules now. But do buyers know that?
Whether there is or there isn’t a crisis, demand for homes cannot vanish in Bulgaria. Official data shows that 96% of Bulgarians own the properties they live in.
As usual, the question is: should I buy now?Housing prices have tripled since 2002 –the average price has now reachedBGN 1,360 per sq m, while it used to be just BGN 331 seven years ago. Rising prices resulted in a construction boom in larger cities, so now more than ever customers see plenty of options to choose from. Last year, over 21,000 residences have been completed – houses and flats. This is more than twice the amount of properties built in 2004 so now many developers are willing to offer discounts in order to get rid of the plethora of units they have.
Yet, buyers and real estate market participants apart from facing some opportunities have come up against some challenges as well.
Never before (at least in the past three years) was buying a property related to so many questions. Shall I obtain a loan? Of what amount should it be? Should I take the risk of buying a larger property? What if I lose my job? What if banks don’t approve my income? Do deferred payment schemes really work? Are they safe enough? Is off-plan buying cheaper? (I still remember those ‘pyramids’). What if the developer goes bankrupt? Prices are falling now. What if tomorrow they fall even faster?And so on and so forth ….
The downturn has turned the real estate market into a market of rumors and guesses, thus destroying the mutual trust that market participants shared. As a consequence, it is not only the projects with problematic locations, infrastructure and designs that suffer, but also the developers, who should have known better.  
The issues regarding access to properties have deteriorated since real estate prices rose and loan volumes shrunk in the past years. However, the lack of trust is much worse than the lack of money.
"Actually, the crisis is a crisis of trust and remains such even at this very moment. This is also the reason why the financial market is stagnated – lack of trust", said Petar Hristov, managing partner at investment company Bulgaria Investment Group.
Besides him, many developers do have a clear concept of dealing with this problem – slowing down construction, focusing on already started projects and postponing new ones, cutting off costs, using a more innovative marketing strategy by means of offering flexible financial schemes.
Spanish company Hercesa Internacional offered deferred payment schemes months ago as well as completion of deals on permit to use issuance. The Bulgarian filial of international developer AFI Europe, a subsidiary of the firm of Israeli billionaire Lev Levaev,responded to its clients’ problems by means of launching deferred payment schemes until banks recover. Other companies are offering leasing options. Residential Park Sofia, for instance, is offering rents with buying options. Are these solutions enough?
Not always. This is because buyers’ woes are far from being finance-related only. Faced with the future’s insecurity, they have to spend carefully on properties and often choose to postpone purchasing expensive properties, cars and furniture. In the meantime, they are flooded with offers which, at first glance, offer good quality, but actually might involve certain risks.
"The construction boom merged companiesof high criteria with enthusiastic developers of unproven professionalism. Clients should do a research on the following thing: whether the company offering them a property has a good reputation", commented Vesela Miryanova, executive director of Arteks Engineering. 
When loss of trust becomes an issue, the reputation of developers is crucial, especially in a market of short lived companies. Raiffeisen Real Estate commented it is "vital whom are you working with".
So, now we have on the agenda the question whether information is available in the nontransparent Bulgarian market. "The attempts of real estate organizations, construction companies, architects, notaries and, to some extend, of agencies to make the real estate sector transparent enough, are very important", says the agency established by Raiffeisen Bank.
The problem may be partly solved by means of using professional advice – on legal, credit-related and construction aspects of deals.
"When buying, you should require a property description of façade, interior and windows. These are all things that are technically stated and every description involves a certain product quality. Therefore, construction characteristics should be evaluated by an expert", Arch. Ivo Panteleev commented. Buyers are actually surrounded by loads of "bargain" deals.
The risk is that some developers try to save quality in order to get lower prices. Real estate professionals advise buyers to pay attention to the lowest prices. Mislead by "prices of 200 – 300 euro per sq m, buyers can come up against trickery.They should better involve in proven relations so that to avoid losses", Raiffeisen officials say.
"Don’t buy cheap", is also the recommendation of Arch. Miryanova. She believes there is no way that prices of below EUR 800 per sq m (in suburbs) and EUR 1,400 (in prime regions) can have proper quality.
Such prices might be too high for some buyers, but professionals make it explicit that quality costs money and people expecting to receive free real estate properties will be mislead. So, the first question that buyers have to find an answer to is: what do they need and what can they afford?
Questioned on what he would do, if buying a property, Petar Hristov said: "Firstly, I will choose the exact project and will check if it corresponds to my requirements and criteria. "
In Bulgaria, adhering to legislation and traditions protects ownership which prevails to other types of property uses. Seldom more than 2/3 of the population in most developed countries lives in their own homes.
"When buying a property, the family should make a careful analysis of the opportunities and necessities ... Everyone wants a home, a car, recreation destination. But the criteria in the end turn into options", Petar Hristov added.
So, yes, you can definitely have a bargain these days. Real estate agents say that in order to stimulate sales, developers are even prone to break free from properties that they wanted to retain as investments. Often, these are the best homes in residential complexes and have now equaled to the price of all other properties. But the best deal is not the cheapest one.