Buying a property on a greenfield basis with a mortgage loan

<p data-start=&quot;306&quot; data-end=&quot;565&quot;>Buying a property “off the beaten track” – that is, when the building is not yet completed – seems to be increasingly attractive to many people in Bulgaria. The reason is simple: the price is usually lower, the choice is greater, and the feeling of having a brand new home is truly pleasant.</p><p data-start=&quot;567&quot; data-end=&quot;819&quot;> But here comes the important question: <em data-start=&quot;595&quot; data-end=&quot;661&quot;>How exactly does this work, especially if you need a mortgage?</em> In the following lines, we will tell you everything you need to know - without unnecessary terminology, without stress. Just practical advice from the first to the last stage.</p><h3 data-start=&quot;826&quot; data-end=&quot;866&quot;> What does &quot;on the green&quot; actually mean?</h3><p data-start=&quot;868&quot; data-end=&quot;1089&quot;> Buying a property on a greenfield site means that you are buying a home that is not yet finished – the first floor may not even have been poured. This is a property “on paper” – you see a drawing, a visualization, and a promise that you will have the keys in a year or two.</p><p data-start=&quot;1091&quot; data-end=&quot;1240&quot;> Most often, these are transactions that occur before the building has Act 14 (rough construction), and sometimes even before actual construction begins.</p><h3 data-start=&quot;1247&quot; data-end=&quot;1270&quot;> What are the pros?</h3><p data-start=&quot;1272&quot; data-end=&quot;1363&quot;> Buying green isn&#39;t a bad idea, as long as you know what you&#39;re doing. Here are some good points: </p><ul data-start=&quot;1365&quot; data-end=&quot;2061&quot;><li data-start=&quot;1365&quot; data-end=&quot;1573&quot;><p data-start=&quot;1367&quot; data-end=&quot;1573&quot;> <strong data-start=&quot;1367&quot; data-end=&quot;1384&quot;>Better price</strong> – construction companies usually offer lower prices in the initial stages because they need capital to complete the project. The earlier you get into the project, the more profitable it is. </p></li><li data-start=&quot;1577&quot; data-end=&quot;1753&quot;><p data-start=&quot;1579&quot; data-end=&quot;1753&quot;> <strong data-start=&quot;1579&quot; data-end=&quot;1594&quot;>A wide selection</strong> – you can choose between different floors, views, exposures, even layouts. When the building is almost ready, the most desirable apartments are already sold out. </p></li><li data-start=&quot;1755&quot; data-end=&quot;1888&quot;><p data-start=&quot;1757&quot; data-end=&quot;1888&quot;> <strong data-start=&quot;1757&quot; data-end=&quot;1776&quot;>Flexible payment</strong> – most builders offer payment in installments based on progress. You don&#39;t have to take out the entire amount at once. </p></li><li data-start=&quot;1890&quot; data-end=&quot;2061&quot;><p data-start=&quot;1892&quot; data-end=&quot;2061&quot;> <strong data-start=&quot;1892&quot; data-end=&quot;1916&quot;>Modern construction</strong> – you get a new building, compliant with the latest requirements for insulation, energy efficiency and amenities. No need to demolish or renovate.</p></li></ul><h3 data-start=&quot;2068&quot; data-end=&quot;2087&quot;> Are there any risks?</h3><p data-start=&quot;2089&quot; data-end=&quot;2187&quot;> Of course, there are no rose-colored glasses. Green property also has a dark side if you&#39;re not careful: </p><ul data-start=&quot;2189&quot; data-end=&quot;2745&quot;><li data-start=&quot;2189&quot; data-end=&quot;2310&quot;><p data-start=&quot;2191&quot; data-end=&quot;2310&quot;> <strong data-start=&quot;2191&quot; data-end=&quot;2203&quot;>Delays</strong> – almost no construction project is completed exactly on time. Sometimes it&#39;s a month or two, other times a year. </p></li><li data-start=&quot;2312&quot; data-end=&quot;2468&quot;><p data-start=&quot;2314&quot; data-end=&quot;2468&quot;> <strong data-start=&quot;2314&quot; data-end=&quot;2335&quot;>Project changes</strong> – the final result does not always look the same as the 3D visualizations. There may be slight changes in layouts or materials. </p></li><li data-start=&quot;2470&quot; data-end=&quot;2587&quot;><p data-start=&quot;2472&quot; data-end=&quot;2587&quot;> <strong data-start=&quot;2472&quot; data-end=&quot;2496&quot;>Risk of non-completion</strong> – in rare cases, the builder may run into difficulties and the building may not be completed. </p></li><li data-start=&quot;2589&quot; data-end=&quot;2745&quot;><p data-start=&quot;2591&quot; data-end=&quot;2745&quot;> <strong data-start=&quot;2591&quot; data-end=&quot;2605&quot;>Bureaucracy</strong> – if you buy at a stage without Act 14, some banks do not want to grant a loan. The stages of construction must be carefully coordinated with the bank.</p></li></ul><h3 data-start=&quot;2752&quot; data-end=&quot;2789&quot;> How is the mortgage loan included?</h3><p data-start=&quot;2791&quot; data-end=&quot;2935&quot;> We come to the money. If you don&#39;t have the full amount, a mortgage is the logical solution. But when you buy outright, there are a few peculiarities:</p><h4 data-start=&quot;2937&quot; data-end=&quot;2972&quot;> 1. <strong data-start=&quot;2945&quot; data-end=&quot;2972&quot;>Pre-approval</strong></h4><p data-start=&quot;2974&quot; data-end=&quot;3211&quot;> Before you sign anything, it&#39;s best to go to a bank or credit counselor and find out how much money you can realistically borrow. That way, you&#39;ll know what to look for and avoid the risk of taking out a loan that you can&#39;t finance.</p><h4 data-start=&quot;3213&quot; data-end=&quot;3245&quot;> 2. <strong data-start=&quot;3221&quot; data-end=&quot;3245&quot;>Financing in stages</strong></h4><p data-start=&quot;3247&quot; data-end=&quot;3467&quot;> Banks do not give the entire amount at once when you buy outright. They grant the funds in stages - for example, part of the loan is disbursed upon act 14, another part upon act 15, and the last part upon act 16 and notarial transfer.</p><h4 data-start=&quot;3469&quot; data-end=&quot;3502&quot;> 3. <strong data-start=&quot;3477&quot; data-end=&quot;3502&quot;>Bank requirements</strong></h4><p data-start=&quot;3504&quot; data-end=&quot;3763&quot;> Different banks have different policies. Some require the construction to have reached at least Act 14, others wait until Act 15. They will usually also require a market valuation from a licensed appraiser, life insurance, and property insurance (even if it is not yet fully completed).</p><h3 data-start=&quot;3770&quot; data-end=&quot;3809&quot;> Step by step: what to do</h3><h4 data-start=&quot;3811&quot; data-end=&quot;3840&quot;> 1. <strong data-start=&quot;3819&quot; data-end=&quot;3840&quot;>Check the builder</strong></h4><p data-start=&quot;3842&quot; data-end=&quot;4045&quot;> Find out who is behind the project. How many other buildings has he built? Were they completed on time? What are people writing online? Take an hour and look for reviews and comments – it can save you a lot of headaches.</p><h4 data-start=&quot;4047&quot; data-end=&quot;4083&quot;> 2. <strong data-start=&quot;4055&quot; data-end=&quot;4083&quot;>Review the permits</strong></h4><p data-start=&quot;4085&quot; data-end=&quot;4258&quot;> Make sure that the project has a valid building permit and that the land it is being built on is owned by the developer. This can be verified by a notary or lawyer, and is worth it.</p><h4 data-start=&quot;4260&quot; data-end=&quot;4300&quot;> 3. <strong data-start=&quot;4268&quot; data-end=&quot;4300&quot;>Sign only with a good contract</strong></h4><p data-start=&quot;4302&quot; data-end=&quot;4503&quot;> The preliminary contract should be detailed: what you are buying (floor, area, exposure), the completion dates, how to pay, and most importantly – what happens if the builder is late or does not finish the building.</p><p data-start=&quot;4505&quot; data-end=&quot;4554&quot;> If you can, don&#39;t sign without consulting a lawyer.</p><h4 data-start=&quot;4556&quot; data-end=&quot;4589&quot;> 4. <strong data-start=&quot;4564&quot; data-end=&quot;4589&quot;>Coordinate with the bank</strong></h4><p data-start=&quot;4591&quot; data-end=&quot;4831&quot;> Before making the first payment, discuss with the bank what documents will be needed, when the installments will be released, and how the transfer will be made. Sometimes the bank wants the property to already exist legally (after Act 14) in order to mortgage it.</p><h4 data-start=&quot;4833&quot; data-end=&quot;4858&quot;> 5. <strong data-start=&quot;4841&quot; data-end=&quot;4858&quot;>Monitor the construction</strong></h4><p data-start=&quot;4860&quot; data-end=&quot;5055&quot;> Don&#39;t be a passive buyer. Visit the construction site (with permission), ask about the progress, ask for photos and reports. The more active you are, the less likely it is that something will go wrong without you realizing it in time.</p><h3 data-start=&quot;5062&quot; data-end=&quot;5101&quot;> What to look for when choosing a bank? </h3><ul data-start=&quot;5103&quot; data-end=&quot;5351&quot;><li data-start=&quot;5103&quot; data-end=&quot;5188&quot;><p data-start=&quot;5105&quot; data-end=&quot;5188&quot;> What percentage of financing does it offer (80% is common, but some banks go up to 90%) </p></li><li data-start=&quot;5189&quot; data-end=&quot;5232&quot;><p data-start=&quot;5191&quot; data-end=&quot;5232&quot;> What is the deadline for granting the tranches? </p></li><li data-start=&quot;5233&quot; data-end=&quot;5264&quot;><p data-start=&quot;5235&quot; data-end=&quot;5264&quot;> How much will the insurance cost? </p></li><li data-start=&quot;5265&quot; data-end=&quot;5312&quot;><p data-start=&quot;5267&quot; data-end=&quot;5312&quot;> Is there a fee for drawing down the loan in installments? </p></li><li data-start=&quot;5313&quot; data-end=&quot;5351&quot;><p data-start=&quot;5315&quot; data-end=&quot;5351&quot;> What is the annual percentage rate (APR)?</p></li></ul><p data-start=&quot;5353&quot; data-end=&quot;5534&quot;> If you&#39;re not sure where to start, you can contact <strong data-start=&quot;5415&quot; data-end=&quot;5449&quot;>a credit counseling firm</strong> . They don&#39;t cost you anything because they are paid by the banks, and they will save you time and money.</p><p data-start=&quot;5536&quot; data-end=&quot;5813&quot;> 👉 The <strong data-start=&quot;5547&quot; data-end=&quot;5557&quot;>IMI.BG</strong> website has a special section <strong data-start=&quot;5579&quot; data-end=&quot;5598&quot;>&quot;Real Estate Services&quot;</strong> , where you can find precisely such companies - both for credit consulting and for construction services, brokers and other experts from the real estate market. You can also register there yourself if you offer such services.</p><h3 data-start=&quot;5820&quot; data-end=&quot;5838&quot;> Final tips </h3><ul data-start=&quot;5840&quot; data-end=&quot;6113&quot;><li data-start=&quot;5840&quot; data-end=&quot;5888&quot;><p data-start=&quot;5842&quot; data-end=&quot;5888&quot;> Don&#39;t rush - buying a home is a big decision. </p></li><li data-start=&quot;5889&quot; data-end=&quot;5933&quot;><p data-start=&quot;5891&quot; data-end=&quot;5933&quot;> Never pay a large sum before Act 14. </p></li><li data-start=&quot;5934&quot; data-end=&quot;5983&quot;><p data-start=&quot;5936&quot; data-end=&quot;5983&quot;> Trust only documents, not promises. </p></li><li data-start=&quot;5984&quot; data-end=&quot;6059&quot;><p data-start=&quot;5986&quot; data-end=&quot;6059&quot;> Always read the contract – twice. If you don&#39;t understand it – show it to a lawyer. </p></li><li data-start=&quot;6060&quot; data-end=&quot;6113&quot;><p data-start=&quot;6062&quot; data-end=&quot;6113&quot;> Prepare a buffer of 5–10% for unforeseen expenses.</p></li></ul><p data-start=&quot;6120&quot; data-end=&quot;6389&quot;> <strong data-start=&quot;6120&quot; data-end=&quot;6156&quot;>Buying a home on the green isn&#39;t scary</strong> , as long as you prepare well. Many people have acquired beautiful new homes at affordable prices this way. But the key is to be informed, careful, and to secure trusted partners – a builder, a bank, and a consultant.</p><p data-start=&quot;6391&quot; data-end=&quot;6466&quot;> And if you are looking for such - you know where to find them. <strong data-start=&quot;6439&quot; data-end=&quot;6466&quot;>IMI.BG &gt; Real Estate Services.</strong></p><p data-start=&quot;6468&quot; data-end=&quot;6510&quot;> Good luck and may your new home bring you happiness! 🏡</p>