Real estate market in Poland has undergone both waves of euphoric growth, painful falls and disheartening stagnation. These are the reasons why it is developed enough to be able to find amongst an outpouring of offers, a short-lived one, a so called bargain. There is plenty to look for â apartment sales approach 30%. But beware â the lower the price, the faster a red light should light up.
First manner of succesfully encountering a bargain is to contact an agent of a reputed estate agency. If we present our idea with clarity and honesty, we will find in them a devoted friend. Such agent will be able to devote a lot of time to find and analyse hundreds of offers, which they come across on a daily basis and knowing that a transaction will soon be concluded. We will be gaining sort of an employee. The agent will perform the tedious work for us and will filter the hundreds of offers, verify their legal status and just as important â will determine reasons for such low price (these can be very different). When sufficient number of interesting offers is gathered, we can simply familiarise ourselves with them and a transaction is concluded when one of them gets purchased or the agent continues the search. Letâs be sure â we will never do the agentâs job better than someone who has been at it 8 hours a day for many years.
Developerâs end of line
A safe occasion from a legal perspective is purchasing a house from a developer, who is left with some apartments at the end of the investment process. Unfortunately, these are usually the weakest ones within the given estate. Usually these are the ground floor apartments or with a disadvantageous accommodation plan â the result of âclosingâ a tier at one of its ends or other reason, due to which the architect had no freedom for manoeuvre as to the accommodation plan. We often come across such a situation with revitalised tenement houses (apartments with yard-facing windows are difficult to spice up from architectural perspective). Developer is fully aware of having better and worse apartments on offer. In order to close the investment, all should be sold. Hence, the longer these left-over apartments remain unsold, the more eagerly they will be sold â per square metre price will fall. At times, the offer will include finishing works in the apartment which is another way to add to its value.
Auctions â the desperate put their cards on the table
When a developer decides to not wait for clients any longer, he or she will choose to auction the remaining units. But be careful â on the primary market frequent occasions can be encountered also in a distinct scenario: it is the badly prepared investment, which poses trouble selling. More frequently developers put on the market an estate investment with âstodgyâ apartments. In the recent years we have had an abundance of firms, which having no idea about housing, desired to have a copartnership with a magical addition âdevelopmentâ. As is easy to spot, the more amateurish the investment, the bigger the occasion â and hence the bargain. But careful: a really badly planned apartment in a mundande location will not gain much value.
Inheritance â race for cash
A rife reason to want to sell is an expected (more or less) inheritance. The beneficiaries are often few, which means that the only solution is to sell the property and split the gain. To quickly obtain cash the price falls significantly from theanticipated value of the property â in order to speed up the transaction conclusion.
When they come to get whatâs theirâs
An unfortunate (for the seller) occasion to buy a sale property is a bailiffâs auction. The most frequent reason of the low price is to retrieve the debt taken out for its purchase. So in reality the good occasion to buy a sale property is to buy it back from a slippery credit recipient. There arenât many such occasions, the reason being that the banks do whatever they can to avoid bailiffâs intervention â it is better to negotiate and help the credit recipients for them to keep repaying their debt (and working towards the bankâs profit) than quickly redeem part of the value and end the operation with given recipient at a loss. Of course the case can be that the bank will also be in trouble and when it comes across a slippery client, it too will want to redeem at least part of the credited money to save its fluidity. This scenario is grinding and so far unprecedented in Poland. Besides bailiffsâ auctions on behalf of the banks, I recommend paying close attention to other sorts of bailiffsâ auctions. Due to various financial vicissitudes (unfortunately more frequent during the past year) it so happens that despite the lack of a mortgage on given property, the bailiff needs to auction it.
Careful when stepping on a mine â unclear legal status, occupiers
Sometimes a bargain or a price significantly too low should be cause for extra vigilance. It is due to the fact that often the sellers will try to hide important legal flaws of the property from the buyer â i.e. unsettled legal status (more owners than sellers), property with a lodger etc. It is worth giving the property a vetting by a lawyer or an estate agent before signing the contract of purchase. It is better to lose an apparently cracking bargain than to step on a mine, the consequences of which will be miserable and will last for years generating additional costs.
Author: Witold Zamorski
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