Looking for the perfect newly built home: a Tranio client on buying a townhouse in Sopron, Hungary
Ekaterina, an entrepreneur from St. Petersburg who owns a business in Europe, asked Tranio's managers to pick a newly built property in Western Hungary for her. In her interview with Tranio, she explained how difficult it was to find a reliable developer in a small town and why she ultimately didn't have to go to the viewing herself to buy the property.
— Ekaterina, why did you buy a residential property in Hungary?
— It just so happens that all my family and I are permanent residents of Hungary. I wouldn't say this country is nice enough for us to live there permanently, nor that we like it particularly. We live in St. Petersburg, so for us it's more convenient to spend our weekends or holidays in Finland, where we already have a detached house. However, to extend our European permanent residence permits quickly and save on the temporary registration, we decided to buy a property in Hungary.
— You bought a townhouse in the small town of Sopron. What were the criteria for choosing the location?
— The west of the country is very different from Central Hungary. Sopron is 6 km away from the border, and you can really feel the proximity of Austria there, but the local property is cheaper. Besides, our daughter is growing up and planning to study in an Austrian university. We thought we could visit Vienna from time to time while living in Hungary, just 60 km away.
My husband and I got acquainted with the town in advance: we looked around, took a car ride and viewed several properties in Sopron. That's why I was ready to buy a residential property in that very place.
— Where did you go to find your property?
— Everything was simple: I simply searched for “property for sale in Hungary” online and got on Tranio’s website. I also visited other websites, of course, but everything was relatively vague. I saw beautiful photos and interesting properties, made phone calls and wrote e-mails, but I got no responses.
At Tranio, they immediately put me through to Inna Opalyuk, the Hungarian real estate expert. She recommended a company, Tranio’s partner in Budapest, and organised a Skype conference with a local expert for me to ask questions. After that I began contacting the Hungarian company directly.
— What requirements did your future property have to meet?
— Originally we were looking for a flat, preferably a newly built one. We saw several properties in Sopron and realised that all the local property built over a decade ago is in poor condition. This kind of property needs constant maintenance, but as we were not going to live in Sopron permanently, it would have been too burdensome for us.
Our home in Russia is newly built, so we are familiar with the advantages of owning such a property, as well as with the approximate level of maintenance costs. We understood that in Hungary we also needed nothing but a newly built one. We certainly could have considered buying a detached house, but we had no idea about the maintenance costs, and we should have searched more scrupulously in that case. We actually didn't find any newly built houses in Sopron.
— Was the selection of flats better?
— We considered five newly built flats, but our Hungarian lawyer declined every transaction: in some cases, there were problems with the documents, in others the property status was not right or there were doubts about the developer’s reliability. We understood that Hungary didn’t regulate its newly built property market effectively yet and that buying residential property under construction still lacked transparency at some stages. For example, there was a risk of not getting the property on time.
As a result, our lawyer recommended that we drop the idea of buying a newly built property and find one built at least two or three years ago. Sadly, it turned out that there were no such properties on the market. The newest properties we found were constructed 7-10 years ago. Despite their age, we came across some good ones; they were, however, located far from the town, for instance, an apartment building standing by itself in a field.
— How many properties did you view personally?
— Having been to the town before, we didn’t go there for a second time to view each flat. Now we can open Google Maps and get a satellite view of our property. That was how my husband and I looked at the streets and the exteriors of the houses. To date, we have only seen photos of the townhouse we eventually bought. But it’s newly built, just as we wanted.
— The lawyerdidn’t dissuade you from buying this one?
— He didn't. Having reviewed the documents, he approved the transaction. Our developer earned a good reputation in the local market. This company had also built the very first property we liked in Sopron, but there was a catch: we couldn’t register it, as it was located in a sanctuary. For us, registration was crucial: we needed it to extend our permanent residence permits.
Our townhouse cost about €10,000 more than we planned. But the price didn't become an impediment: the property suited our requirements completely, and we decided not to economise.
— Are you also satisfied with the neighbourhood and the local infrastructure?
— Yes, our residential property is located in a modern, evolving neighbourhood filled with new townhouses and detached homes. The centre of the town is less than a kilometre away, and large shops are no more than a couple kilometres away. Everything is very nice and convenient for a small European town.
— Was your townhouse ready for you to move in?
— Not quite. We bought it when it was nearly finished. But this worked in our favour: we could choose the materials ourselves and select what we needed in terms of quality and appearance.
— How often do you plan to use the property?
— I couldn’t say offhand, as our plans are constantly changing. I think we will go there once or twice a year at most. Maybe when our daughter goes to study in Austria, we will move to Sopron to visit her more often.
— Have you already decided how you’ll manage your Hungarian property?
— Not yet, although this matter is urgent for us. I hope I'll be able to use virtual banking to pay the bills. One option is to equip the property with minimal furniture and try to lease it. But, again, I haven't seen it yet and the circumstances may change. Thankfully, we already own a foreign property where we don't live permanently, and I have not had any problems with managing it remotely.
The Hungarian market for property under construction is not yet regulated as sensibly as its Austrian or German counterparts; therefore, in this country, residential property buyers will certainly need the assistance of lawyers who will put the brakes on the transaction if they even slightly doubt the developer's reliability. This was Ekaterina’s case when the lawyer repeatedly turned down contracts.
Tranio's partners in Hungary recommend their buyers only local lawyers with proven expertise with whom they have been working in long-term cooperation. No matter what type of property our clients are interested in – newly built or older – we always tell them about all the market nuances and do everything we can to eliminate the risk of suspicious transactions with the help of our foreign partners and their legal advisors.
Real Estate Sales Manager for Hungary and Slovenia