Buying your first property: what you need to know before signing a preliminary contract?

• Planning and Budget Setting
• Market Research and Property Selection
• Legal Check and Document Preparation
• What Does the Preliminary Contract Include?
• Why Is Legal Assistance Important?
• Final Stage – Notarial Deed and Registration

Buying your first property is one of the most significant decisions in life – a step that combines emotions, long-term financial commitments, and strategic planning. For many, it is a dream come true; for others – a serious investment in a stable future.

But before reaching the final contract, there is an important stage that is often underestimated – the preliminary contract. It sets the framework of the deal and defines the rights and obligations of the parties. In the following lines, we will introduce you in detail to the main aspects you need to know before signing this document to ensure security, transparency, and protection of your interests.

Planning and Budget Setting

The first and most important step before signing any documents is to clearly determine your financial capabilities. Setting a budget is not limited only to the price of the property you will purchase but also includes all accompanying expenses – notary fees, local tax, registration fee, broker commission, and possible bank fees for a mortgage.

Before proceeding with the deal:

• make a realistic assessment of your monthly income and future payments;

• calculate the maximum amount you can allocate without risking financial stability;

• keep in mind that the total transfer costs usually amount to about 3.5%–7% of the property value.

Careful financial planning protects you from unpleasant surprises and guarantees that you will make a purchase that meets both your needs and your capabilities.

Market Research and Property Selection

The next step is to conduct thorough research of the real estate market. In Bulgaria, the market is diverse – from modern apartments in big cities to cozy houses in quieter areas. Location is crucial not only for your comfort but also for the future value of the property.

Before choosing:

• check the infrastructure and access to transport, schools, shops, and green areas;

• walk around the area to observe the level of development;

• assess the potential for development and price increase in the future, especially if you plan an investment.

Good preparation gives you confidence that you are choosing a home that will retain its value over time and provide comfort for your family.

Legal Check and Document Preparation

Before signing a preliminary contract, it is mandatory to conduct a full check of the legal status of the property. This includes analysis of ownership documents, encumbrance certificates, tax assessment, and compliance with cadastral data. Check whether the property is not burdened with mortgages, liens, or other third-party rights.

At this stage, it is advisable to seek assistance from experienced lawyers or attorneys who will help you interpret the clauses and ensure that everything in the deal complies with the law. They will also review the draft of the preliminary contract itself to make sure your interests are protected.

The legal check is your shield against potential risks and a stage that should never be skipped.

What Does the Preliminary Contract Include?

Once you have chosen the property and completed the checks, the next step is signing the preliminary contract. It is a mandatory stage before notarizing the deal and aims to regulate all conditions under which the purchase will be finalized.

The preliminary contract usually includes:

• detailed description of the property – address, area, boundaries, identifier;

• agreed sale price and payment method;

• amount of the deposit (usually 10%) and conditions for its return;

• deadline for signing the final notarial deed;

• responsibilities of the parties in case of delay or non-fulfillment;

• who bears the costs of the deal – notary fees, local tax, registration.
  
  

Every detail here matters. Make sure the clauses are clearly formulated, and the obligations and rights are balanced. Any unclear condition can later turn into a conflict or financial risk.

Why Is Legal Assistance Important?

Working with a professional broker and lawyer is not only recommended but often decisive. They know the procedures in detail, monitor the completeness of documents, negotiate terms, and represent you in meetings with the seller, notary, or banking institutions. Additionally, they can advise you on declaring the property after purchase and guide you on what documents and taxes are upcoming.

In complex deals or purchases with a mortgage, the lawyer will ensure that all parties comply with the law and that your protection is guaranteed. Investing in professional help saves you time, stress, and potential financial losses.

Final Stage – Notarial Deed and Registration

Once all conditions of the preliminary contract are fulfilled, the next step is signing the notarial deed – the official document that makes you the owner. Here, all due fees are paid:

• local acquisition tax – about 2–3% of the property value;

• registration fee – 0.1% of the price;

• notary fees – between 1% and 1.5% depending on the material interest.

After signing, the notary submits the deed for registration in the Property Register, and you officially become the owner. Don’t forget afterwards to register the property with the municipality and transfer the utility accounts for electricity, water, and other services to your name.

With proper preparation and reliable partners, buying your first home will be not only a successful deal but also a peaceful investment in the future.