What can go wrong when buying property in Budapest?

If you are planning to buy a property in Budapest and are not familiar with the local characteristics, you can run into some costly problems. It’s our job to make sure that doesn’t happen to you. The following stories are anecdotal but not isolated.

Renoviert vs. unrenovierte Fassage im 7. Bezirk in Budapest
surprises
surprises

The elevator promise

Just before we puff up the last steps on the way to the apartment on the third floor, the real estate agent happily explains to us that the fourth floor was bought by an investor and that a brand new elevator will be installed as part of the planned renovation.

In other words: the disadvantage of the apartment (steps, steps, steps – far more than you think possible in the old Budapest buildings) will turn into a monetary advantage in less than a year, and the apartment will experience a jump in value. Money, given.

With this vision in mind, the crumbly plaster and the shabby-looking inner courtyard no longer seem so dreary, the old-fashioned convector gas heating with supplementary monster tiled stove is justifiable, and at the thought of negotiating the price here, remorse is evident. What are we waiting for?

The problem: There was no investor, and the elevator idea was, well, an idea that had been around for a long time, but was regularly rejected by the older owners on the lower floors. Who wants to accept significantly higher ancillary costs for their ground floor apartment so that a few young, wealthy AirBnB hipsters can take the comfortable elevator?

How to avoid For a start, you could ignore the notice and explain to the agent that you only believe what you see. On the other hand, what if the hint is correct? What if another prospect dares more, wins the bid and wins?

If such an apartment is in the inner selection, let’s get to the bottom of the matter and ask the community of owners about the decision. The companies are obliged to provide truthful information and if the elevator were really planned, a corresponding resolution would have to be available. Even if the project is later delayed, we still know that the owner community has a positive attitude towards the project.

With this knowledge in the background, we can make better decisions together – and also negotiate much better.

The debt trap

An agreement had been reached, because the price for the apartment was simply too good to hesitate any longer. In any case, the buyer was satisfied and secretly happy that he had searched on one of the real estate platforms but then selected a private offer. In Hungary, the seller usually pays the broker, which means that if the broker disappears from the equation, you gain a few percent more room to negotiate.

Now quickly to the lawyer of trust – at least for the seller. The contract was only Hungarian, but a friend of the seller translates the most important passages on site.

Everything is going well until the notifications from various agencies arrive informing the new owner about payments due – tax debts, unpaid special levies, unpaid electricity bills.     

The problem: As a private buyer, you have no way of viewing the necessary data to exclude any old debts. You could ask for an excerpt from the land register, but if in doubt it won’t reveal the whole truth.   

How to avoid  It is the lawyer’s job to ensure this. It is customary in Hungary for the BUYER to bring the lawyer with him, and it is therefore always advisable to employ a lawyer who is as neutral as possible and who has no connection to the seller. Finally, it is negligent to sign a contract that is simply translated verbally and roughly. In this regard, we do not make any compromises – the written and oral negotiations must always be conducted or translated into English.

fallbeispiel lovohaz b1 - Immobilien in Budapest
Ruinenbauten

Budapest is not just made up of glossy real estate.
There’s also the neglected, somber side. Sometimes exists
both in the same street.

A short sale

The viewing appointment was pleasant, the seller courteous despite a rather rudimentary knowledge of English, and hurry was called for, because: in order to get access to this apartment in a good location and equipment, a deposit has to be made, proof of the seriousness.

The fact that the chance of a bargain existed at all was allegedly only because the original buyer had difficulties with the financing, until a small window of time opened up for the solution. No big deal, a deposit of over a million forints (around 3,000 euros) would be enough to seal the deal and beat the other prospective buyer.

But after the transfer has been made, you can no longer hear any signs of life, and it turns out that the tenant pretended to be the owner before his already imminent move out (due to eviction) in order to collect a few deposits.

The problem: Private advertisements on real estate portals are always a risk, because sometimes the owners do not even know that their property can be found there. And it is not always immediately clear whether you are calling a realtor, the owner, or maybe just the tenant or another person who is targeting foreigners who he or she knows may even buy unseen.

How to avoid As nice as the opportunity may seem: a deposit should only be paid if all information has been verified by yourself or a trusted authority on site. Identity of the seller, a current extract from the land register, maybe the involvement of a lawyer with an escrow account. This does cost a fee, but you can be sure that the lawyer will only approve the payment if essential criteria, e.g. a watertight advance contract, have been met. At the same time, the seller knows that you mean business and you can take the next steps with peace of mind.

Unintentional landlord

The purchase has been successfully completed and the new owners now have the entry in the land register in their hands. There is no doubt that the apartment is in their possession, and that without any contaminated sites. Well, that wasn’t entirely true. Because the promised move out of the tenants did not take place and it was now unclear whether and when the new owners could dispose of their newly acquired apartment.

The problem : If a buyer determines after the conclusion of the contract that the property is rented, although this was not mentioned in the purchase contract, he can assert the claims based on the legal deficiency, but he has no extraordinary right of termination. In any case, a time-consuming process is imminent, and depending on the type of tenant (families, for example, are particularly protected for good reasons, and there are also winter eviction bans), the chances are bad.

How to avoid: First of all, make sure that it is the owner who currently lives in the apartment. And if an agent leads through the apartment, address the point aggressively. On the other hand, the rental can also be entirely in your interests if the conditions are right. So it differs from case to case and has to be considered individually. In case of doubt, consult your own lawyer BEFORE the conclusion of the contract in order to deal with the relevant passages incl. Security retention, which is only paid when moving out on time, to be included in the purchase contract.

That price is too hot

Cheers echoed from the next room – while researching real estate in downtown Budapest, my wife came across a truly incredible apartment: 100 sqm old building, a bit old-fashioned but still nicely furnished, equipped with central heating, on the edge of a really good residential area and within walking distance of the metro . And then the price: well below 100,000 euros. To be too good to be true?

The problem: Unfortunately yes. The sale is legal and one acquires something, but on closer inspection this “something” turns out to be one inheritable tenancy law out. The apartment belongs to the city and you can then live in it during your lifetime for very little rent. Recently, such offers have also appeared for very sought-after districts and mingle inconspicuously (but attractively priced) with the offers. This sometimes means that an apartment in the 2nd district can be one of these cases with a “normal” price. In the worst case, the fact is not mentioned in the ad and only shows up at the legal appointment.

How to avoid Read very carefully! As soon as the word “Bérleti jog” appears in an ad, you can use the euphoria generated by the ad for something else, perhaps for a walk. And in the event that the information has been withheld, you should consult a lawyer before making any payment. He will notice it very quickly and save you from it.

Wählen Sie Ihren Termin zum Kennenlernen -
natürlich kostenlos.

Die Kommunikation findet zu jeder Zeit in deutscher Sprache statt –
auch bei Terminen vor Ort in Budapest.

Choose your date to get to know each other -
of course free of charge.

Communication takes place in English at all times –
also for appointments on site in Budapest.