Scammers continue to charge upfront fees to sell property in Bulgaria.

Biggest scam in Bulgaria’s property market – sellers beware.

Any owner thinking to sell Bulgarian property can save thousands by reading the below.

Bulgaria’s estate agencies have had a turbulent decade; thousands appeared from nowhere during the boom and faded into the past during the recession. Some professional companies stood the test of time and continue to trade successfully, however a small minority found the new market conditions too hard to profiteer, particularly once Russian market presence became essential. Far easier was to continue marketing in their own language, within their own culture and sell to their own countrymen false promises accompanied by an upfront fee. Despite levels of corruption in Bulgaria, this is actually the sad reality of a few firms in the UK and Ireland.

They say they have staff and offices in Bulgaria

Grandiose claims help infer legitimacy. By purporting multiple offices and their own staff throughout Bulgaria these firms appear sizable and capable, yet they actually own nothing more than a website that appears in search engines exclusively in the UK and Ireland, where today almost no buyers can be found.

These outfits lack any marketing capacity to find and entice buyers from the areas of actual market demand (Russia, Poland, Ukraine and Bulgaria), let alone infrastructure to successfully interact and complete a cross border sale. Perhaps these websites have some agreements with real estate agencies in Bulgaria, but these operate as private independent third parties and are in no way the same entity. If such third parties are associated they will naturally always charge additional seller commissions, which you will never know you are paying once an unlimited Power of Attorney is issued and signed, which avoids them having to disclose the actual sale price to you.  

Why are their valuations are so much higher?

Everyone likes to hear their asset is worth more, good news feels nice. Speak to New Estate and hear that your Sunny Beach apartment is most likely worth half what was paid, be told openly that your choices are to continue owning or sell at the current market price, there simply aren’t other options. Speak to one of these websites and they will tell you your asset is worth double and they sold five identical yesterday to mythical ‘Chinese investors’, whom you can access by paying 500 Euros.  

Temptation is a powerful force, these websites are opportunists solely reliant upon your desire to hear higher values, to take your money and fund their lifestyles with it. Don’t be fooled by smoothly tailored spin, it is not an ‘investment’ to spend 500 Euros upfront in return for hearing a higher price, it is an expensive thrill and a quick high before reality sets in.

If what they say is true they wouldn’t look to charge you any fee, they would surely offer to buy your property for the lower valuation you have had from every other agent, then sell it themselves for 40,000 Euros more to their fantastical Chinese buyers. A much more profitable business and an far more honest trade.

So, can they actually sell my property?

Over the years New Estate has been approached by hundreds of victims of this scam, some before they paid, some 3-6 months afterwards. In all cases the owner realised they were being swindled and felt as frustrated as they did powerless. The lure of a higher price is difficult to combat and we understand why owners take their bait. The typical experience can be summarised in the following key stages:

• Won over by high valuation and high pressure sales tactics
• Pay 500 Euros
• Await news of a buyer for months
• Slowly be drip-fed negative news about the declining state of the market
• Suspect the high valuation was a carrot on a stick
• Disappointment, frustration and realisation set in
• The owner walks away from their loss and appoints a professional company for no charge

In the absolutely minority of cases the owner receives an offer, its low, perhaps 1/3 of what was promised because the owner has to not only sell at the market price (half the initial valuation) but also cover two sales commissions, knowingly or unknowingly, to the actual estate agent in Bulgaria who found the buyer and the website paid. In every case they could have achieved a high net return with any other estate agency, not paid any upfront fees or felt scammed in the process. 

How can this be legal?

This is a nasty business that should be illegal, but in this unregulated sector the law permits this type of profiteering by deception. The service sold is technically advertising and they complete provision of this by uploading your property to their website, but of course the service inferred and sought after is to find a buyer at the valuation they stated, which is never achieved. Market forces will eventually push these operations out, but in the meantime every owner seeking a buyer should critically analyse the firm they are dealing with and be highly dubious of anyone seeking payment first.