Agents that help only the buyer of an apartment?

Hi!

Your description of the real estate agencies is painfully funny, because it is so true! :-)

It is also important to know that these agencies charge shamelessly high amounts to the sellers (the percentages are not too high I guess, somewhere around 3-5% depending on exclusivity, but as houses and apartments are valued near and above the lifetime earnings of the average Hungarian, the sums seem unfair to many), and the value of their services is questionable. (And locals think even less of them than what they are actually worth.) So lots of people will not go through them, but try to sell their apartments themselves. Even worth: some people advertise through the agencies, and then when the agency finds a buyer, the seller will try to weasel out of the deal with the agency, and cut them out of the deal.
Then there is the question of price on paper: The seller may insist on putting a lower sum on the contract to reduce agency fees, taxes, or to avoid the dreaded "wealth accumulation inspection" by the tax agency. (As I have mentioned before real estate is horribly over-valued, it constitutes the bulk of the wealth of all but the richest.)

So the kind of service you describe would be indeed needed and valuable... for foreigners. I have never heard of such a service, and it would have little to no domestic market, so it might not even exist: Hungarians hate to pay for any service they "could" do themselves.

The closest there is I know of is a bureaucracy/paperwork agency:
http://elintezzuk.hu/ingatlan/ingatlan_egyeb

I think your best bet is an English-speaking local assistant from the company you work for. She'll be delighted to feel important, part of your high-class life, looking at apartments she could never afford, acting on your behalf in front of other people, so driving her home each time and paying for lunch is likely to be ample compensation.

Hope it helped!

szocske wrote:

....... somewhere around 3-5% depending on exclusivity, but as houses and apartments are valued near and above the lifetime earnings of the average Hungarian, .....

We should also mention the lawyers fees which are based upon a percentage of the value of the property. Why a simple notarised transaction and template type contract should require a rip off percentage based fee, I do not know?! It's robotic work in the majority of cases so fixed fees should be the norm. I suppose the transaction costs limit Hungarians to only buying 1 or 2 houses maximum in their lifetimes (if that). People move much more often in other countries (like the USA, UK etc).

I agree with Szocske, if you are coming here on a contract with an international employer, they should be able to find someone to help you with the local market. To do it yourself the only way to really find the thing you want is to work through advertisements (there's lots online with criteria searching and filtering). We found our apartment looking through adverts on the internet (we found ours through "www.ingatlanbazar.hu"). We did not pay a fee (the landlord paid the real estate agent 1 months rent and we were not involved in that part of the deal). Renting might be a better option that buying until you get to know the areas.

If you widen your search you might find it easier than sticking with District 6. Districts 2, 3, 12 and some of the suburbs are nice too and easily commutable (when they finish fixing the bridges and the new metro line).

Thanks for your replies, I welcome (and am greatful for) more views and more ideas from you based on my situation. I have found one firm that seems to be specialiezed in finding apartments. DonŽt know if their services are good and reasonably priced though. Or even if they are still in business.

I am not employed by anyone, basically I am selfemployed (which means alot of research has to be done) and part of my reason for buying is that I think it will be a great thing for my children now 2, 5 and 7. Sort of a longterm investment for various family reasons, and because we like Hungary/Budapest.

Disclaimer: I am a villager.
I have trouble imagining living in the city centre with children. I'm sure a lot of people do it, there are playgrounds and schools, so I'm not saying it is not doable.

I'd still advise you to reconsider the central location, or at least rent first. Do you intend to use the same apartment as an office for clients? Are the schools you have chosen close?

The VI district is indeed the classiest area to have your office or shop, and apartment while you are single, staying out late, etc.
But the place to live for families is the Buda hillside, single and multi-family houses with small gardens, no traffic or crime on the streets, safe and quiet. (priced accordingly, of course.)

Also, do not forget there are upscale towns with great schools within daily commute distance like Szentendre, Telki, Budaors (that one might be more expensive than Buda actually :-) ) and so on. These are the closest we have to the suburbs of a US city, only better, because you only need to commute for work, everything else you can find locally.

Would you mind sharing the name of the agency you have found?

If they work on a percentage basis, you're going to be way better off putting the same amount towards a few months salary of a personal assistant/interpreter/proxy/errand runner, and do the search together.

I hope everything works out despite the local oddities, especially your enterprise!

szocske wrote:

But the place to live for families is the Buda hillside, single and multi-family houses with small gardens, no traffic or crime on the streets, safe and quiet. .... within daily commute distance like Szentendre, Telki, Budaors (that one might be more expensive than Buda actually :-) ) and so on.

Absolutely right advice if you intend to live here in Hungary. I'd recommend sticking to the suburbs where you can have a garden, not the downtown area. Having a garden will allow the kids to let off steam in a safe environment and the summers are hot, they'd spend a lot of time outside anyway. It's also fairly common to have a swimming pool in upmarket houses (but dangerous for small kids). Telki, Paty or Zsambek are too far away from Budapest and not easy for services but they are survivable. Budaors is OK, so is Budakeszi (where I live) or perhaps Torokbalint. These places are serviced by the blue Budapest buses if you want to go to town and they all are all close to the big stores like Tesco, Ikea etc. Not really any need to go to town at all. Finally, I guess it depends if you want to send your kids to an international or local Hungarian school. We've found kindergartens are hard to get into as they are all full up. Bizarrely this seems to be becoming a major deciding factor in whether we'll stay here full time or go back to the UK and just come here during summer holidays.

Hi,
This is what I have found: http://www.interrelo.com/ but I have not recieved an answer from them yet.

I have no clients because basically I work with the Canadian stockmarket together with a few frinds. That means I mostly work with my own money, for instance now I am heavily invested in a gold company which I summarized like this: http://www.scribd.com/doc/23738127/Ocea … -Dec-2009.

Currently we live in our house in Thailand. I fully understand that Hungary is going through a tough time at the moment and that it might last some years, after all I usually try to do thorough research before I invest.

I read with great interest your views about the various parts of Budapest and you are right, all our schools (3 different British ones gives us continuity from their current&future school, views about them are welcome as well) are in the Buda hills.

Still... one of our key ideas was to get one of those unique apartments in the central area.. something that our children will hopefully love when they are 20 and something my parents will love now already. Suburbs can always be copied and built, the older builiding can not... The Buda side might be to expensive for us. I sort of have a budget for this investment of say 180k Euro which seems to get me quite far in the 6th district as I read. But we also need plenty of rooms/sqm.

I should mention that my wife is originally from this part of Europe but not Hungary, and that I view Budapest as an excellent transport hub, as Bangkok is in SE Asia. We will have direct flights to Gothenburg Sweden and to Bangkok as well as trains over night to family. Having backpacked/travelled in the region have convinced me that Hungary is THE place to choose in the area. The glory days of the empire certainly left its marks in most of the Hungarian cities. Again, I understand that alot of people are pessimistic but I have a longer term view than most and many different goals with this investment. 

At the moment our children travel over one hour (with friends) each way to our English School outside Rayong, Thailand so I was sort of looking forward to say a 30 minute ride... but I have to research communications etc between 6th district and the schools.

You have put alot of new ideas in my head, I am very greatful. Not the least the idea of hiring someone for some months to help us with the work could be interesting, but then you have the question of finding someone like that and judging what qualities that person has.

I will also have a closer look at the areas around the schools. Maybe there are some reasonably priced older houses/apartments there that could be a good alternative. One should always keep an open mind to new ideas... and listen carefully to people with knowledge...

Thanks

O_B wrote:

Hi,

I read with great interest your views about the various parts of Budapest and you are right, all our schools (3 different British ones gives us continuity from their current&future school, views about them are welcome as well) are in the Buda hills.

There's also a large and relatively new American school in Nagykovacsi which is more or less in the suburbs of Buda. There are plenty of other nationality or otherwise oriented schools here - French, Austrian, Jewish and of course, the British ones. Bilingual schools and kindergartens are the "in" thing but they all seem rather pricey.

O_B wrote:

.. The Buda side might be to expensive for us. I sort of have a budget for this investment of say 180k Euro which seems to get me quite far in the 6th district as I read. But we also need plenty of rooms/sqm.

For EUR 180K, you can easily buy a decent house in the burbs. Apartments are not necessarily cheaper and can be more expensive than houses. Quite a lot of houses here are highly individualised and not churned out like a factory. They could be the classics of the future. Living in the city has a hassle factor, parking is difficult and a lot of the chain stores (like Ikea) are out in the burbs. It's not like the kind of living in New York or London. The entire scale of the place is much smaller.

O_B wrote:

I should mention that my wife is originally from this part of Europe but not Hungary, and that I view Budapest as an excellent transport hub, as Bangkok is in SE Asia. We will have direct flights to Gothenburg Sweden and to Bangkok as well as trains over night to family....

Regarding transport, I would say that it depends where you are going. Airlines come and go in this region (pun half intended) and you could find that the routes evaporate quickly. The air services here are formed by the triangle of airports of Budapest, Bratislava and Vienna. If you want to go to former CIS countries (the "stans") and onwards then Vienna is the better hub because it has good connections to Istanbul and Turkish Airlines hub there (there is always demand there because of the Turkish diaspora in Austria). On the other hand, Malev have some good routes I use myself like Syria and sometimes Thailand. Africa is hopeless from Budapest. You have to go to Vienna for that, then to Dubai on Emirates or Qatar Airlines (this also applies going to Singapore/NZ/Australia). North and South America I wouldn't know about but I'd say Vienna or transit through London or Madrid. Budapest itself serves limited locations (but that might increase as the airport is being expanded). Since it's only 220km approx between Vienna and Budapest and Schengen exists (no border controls), then it's driveable without too much difficulty. Bratislava isn't much of a hub as it's main services seem to be low cost airlines and parking is terrible. Parking at Vienna airport is ridiculously expensive. The demise of low cost carrier Sky Europe has severely dented services there. Austria has more airports than Hungary (Linz, Graz etc - crazy car parking prices again) which are served by low cost airlines like cheap Ryanair. Ryanair cancels routes regularly (e.g. the one to Balaton/Sarmallek) so buying property on a local airline route availability is probably not a major deciding factor. 

If your wife (like mine) can speak Hungarian, then that's a massive help. I found previously that I always paid a premium by speaking English. Costs were higher than if I could speak the local language. Speaking English is quite easy in the capitals of the region but anywhere outside the capital needs the local language. If English doesn't work, German is a good back up but it depends where one is at the time (in the West of Hungary, German is more common than English). It's not uncommon to find educated people who can do all three languages (Hungarian - as natives, English and German - as the secondary languages).

I am beginning to understand:

The agency you are looking for should be able to help with the investment aspect of your purchase as well, right?
The sum you mention is probably high enough here for private banking services, definitely more than I'll ever see in one pile :-)

Oh and my completely unfounded investment advice (Damn it Jim, I'm a computer scientist, not a real estate investor):
For long term, pick somewhere on the path of the unbuilt section of the "M0" highway ring around Budapest! It will remain peaceful and quiet while your kids need that, and has a good chance to become well connected and highly valued by the time they want to cash in.
Or there's the island I live on (Szentendre island): a bridge is bound to be built in about 10-20 years, likely to double real estate prices, and ruin our sheltered life. But until then our village is safe for our kids, and by then, I won't care. But both of these developments have a chance of never happening!

I'd like to emphasize how in Hungary for such long term investment you should not rely on political stability and ethical behaviour from state agencies and bigshot real estate developers. Local news carries horror stories about ugly new office buildings and hotels being built either in place of historic buildings, or with complete disregard for neighbouring buildings. Your historic apartment might end up facing a firewall so close you can't open the window panes...

http://galeria.index.hu/belfold/2009/04 … ge_size=ms

These photos show a construction 100% according to code and all laws, and sometimes even these rules are bent for anyone with deep enough pockets. (This happened in the fifth district btw.)

I don't want to scare you or anyone else away, the whole country is full of development opportunities, the level of chaos and lawlessness is nowhere near that of other countries in the region often painted with the same wide brush by investors and rating agencies.
It's just that things might not be as simple as they appear, trying to outsmart the locals from far away is a recipe for disaster.

You'll need someone here you can trust. The overwhelming majority of the people here are friendly, honest and loyal, but the risk of being conned by the off swindler is just too great. You can't trust anyone off the internet for example (like me :-) ) Maybe your wife has family ties here?

szocske wrote:

Or there's the island I live on (Szentendre island): a bridge is bound to be built in about 10-20 years, likely to double real estate prices, and ruin our sheltered life. But until then our village is safe for our kids, and by then, I won't care. But both of these developments have a chance of never happening!

Hey Szockse, perhaps you know why they didn't build an exit on Megyeri Bridge to the island?  It certainly would have opened up the Szentendre Island if not as development, but as access to park/leisure areas.

Lots of interesting things here. I will no doubt spending a few days looking through links and googling certain islands :-) and so on.

The way I feel now is that we should start by renting a place and let the children start school, getting to know the teachers and other parents etc. I read somewhere that one should try to stick to one system for the childrens sake so we have chosen to go for the English school system that we are already getting used to now and very happy with.

That will give us time to do more local research, visit all the different parts of town and get to know more people.

I am not a big investor, I simply want a nice place in a country that I have found very beautiful and interesting as well as geographically very well placed for us. The purpose is not to make alot of money, there are easier and safer ways I guess. But I of course would not like to pay to much for something either...

I will remember that picture of the brick wall...

I do, but I'm not sure how interesting this could be for everyone else in this forum :-)

Anyway:

The Szentendre island, especially that southern part where this exit could have been is sealed off, heavily guarded, because the water obtained from the automatic wells all over the place goes directly to the drinking water supply. Hundreds of thousands drink this. Quality and contaminant levels are of course strictly monitored, but if anything were to happen there the only thing to do is to shut the water off, and filtering facilities would need to be built up from scratch. We now flush our toilettes with the best quality drinking water in the world :-)

To keep it interesting for everyone else: The middle Buda area tapwater is mineral water from the Gellert hill hot springs :-)

There were plans and cost estimates for a closed, sealed road on legs (practically a ~5km long bridge over swampy land), with all (possibly oil-contaminated) rainwater captured and piped out from the high risk area, etc. The cost was obviously not proportionate with the benefit.
It would be much simpler to just have a small, separate bridge to the island from Szentendre or Leanyfalu. (that's the prospective development I mentioned in my previous post.) Trouble is, real estate speculation, water protection and local political interests have prevented this small bridge from being built for over two decades now, but we are getting closer.

szocske wrote:

I do, but I'm not sure how interesting this could be for everyone else in this forum :-)

It was interesting to know. I know it seems off track but still relevant in that it could be considered part of investment knowledge since the island is so close to Budapest and therefore should be ripe for development at some point. I never understood where the M0 was going from Megyeri bridge on the Buda side. I presume it will go in a tunnel underneath Urom towards the M1 (East-West highway) and that entire band across to the M1 will eventually become an area for industrial and residential development. Land is relatively cheap in that band at the moment.

p.s. Subsequent to my post above, I discovered the following link. http://motorways-exitlists.com/europe/h/m0.htm#m0_m0

Well, here is a map of recent plans:
http://www.nif.hu/multimedia/gallery/ga … 0gyuru.jpg
Some sections might involve tunnels (especially hills and residential areas). Planning goes slow, because all municipalities (small towns and villages) involved try to bargain for way more local development than possible.

Back to the original topic:

If you have cash and plan to invest in real estate in Hungary in the near future, I recommend to wait if you can:
People have taken out mortgages beyond their long term sustainable income, often in foreign currencies subject to exchange rate fluctuations. The current crisis causes unemployment and underemployment.
Foreclosures are kept back administratively until the upcoming election. The question is when and how the next, populist, anti-market government (the party likely to win the elections) will remove these barriers, flooding the market with urgent sales.
The alternative is permanent restrictions on foreclosures, scaring banks away from mortgages, creating a cash shortage and decreased prices in regular sales.
The only scenario with an opposing short term outcome is state funded bailouts, (people think it would be "fair" that the municipalities should buy the homes under foreclosure, and rent it back to the debtor...) but that's of course not sustainable for long, so who knows what would happen.

Come over, rent for a while, make friends, ask around, buy something nice at a more reasonable price when the time is right!

Well, I never interfer with politics in a country where we are guests. I only try to be a good and respectful guest to the various opinions as well as a good ambassador of the country while abroad.

In general I do however always prefer a non-interfering government and strong and transparent rule of law to fight corruption and preferential treatment from corrupt politicians of any colour. I believe this is essential to create growth/increased prosperity together with a government that creates exceptionally good conditions for smaller companies compared to other groups like multinationals, employed, pensioners etc.

You are probably very right that things can turn to worse after the elections since politicians always try to keep it together until the election day. I especially look for a cheaper forint.

About the populistic part of any new or old government, I would worry (??) more as a Hungarian that all parties (all over the world) lie before the election and do something else once they have won. But that you already know more than most I guess...

We aim to buy during the autumn of 2010 early or late depending on whether we rent first or not.

I am still leaning towards district 6 and made a list of the 10 streets we are particularly looking for:

u.O
u.Jokai
u.Mozsar
u.Zichy Jeno
u.Dessewffy
u.Hajos
u.Nagymezo
u.Lazar
u.Revay
u.Paulay Ede

I wish you and Hungary a Happy & prosperous New Year 2010. We will start celebrating 6 hours before you here in Thailand. Fireworks at the beach and we will worry about the many mosquito bites in the morning :-). No doubt these unwanted creatures will celebrate this evening as well...

If someone is interested, this is our childrens school. I am very impressed with the English School system. Which is one reason we want to continue are adventure (if we can afford) a little longer, but closer to home.  gardenrayong.com/

As another foreigner I completely understand you O_B when you say you want to buy a flat in one of the historical houses. When I first came here I completely fell in love with these houses and couldn't understand why Hungarians didn't think they were that special. I have lived for a while in an old,  very historical house (in the 7th district in fact, don't overlook the 5th, 7th as well as the part of 9th district inside the körut - they are all full of historical buildings) and I can see the down side to it. The high ceilings that make these apartments so magnificent also make them expensive to heat. The heating, plumbing (and if you are so lucky there is even one) elevator might not be up to the standard you are used to. And, these old buildings are more likely to attract cockroaches than newer ones. However - if you want to buy an apartment for the historical and cultural value I really think you should. There are plenty of projects renewing or rebuilding old houses in downtown. One way for many buildings who can't afford an restoration sell the rights to build an extra floor on top of it and in this way ensure that the building remains, get renovated and a higher value.

Most people I know here, foreigners and Hungarians, tend to move out to the suburbs or near villages once the kids comes, with all right - the countryside is in such a reachable distance so why wouldn't you?

Me and my partner however, have not yet reached that stage of our lives but instead purchased an apartment in the 9th district (upcoming neighborhood - we see it as a great investment). However in the end we bought a brand new apartment - never the less, the old ones are the ones with charm.

Buying an apartment as a foreigner in Hungary is, to be honest, a real pain. There is a never ending flood of papers o sign, lawyers to meet, fees to pay (as mentioned above). I had the great benefit of having a Hungarian boyfriend but even despite this, when it came to some legal documents he was not allowed to translate for me (since we were co signing) and we had to bring in a translator plus two witnesses that witnessed the actual translation!

When it comes to real estate agencies, I'm pretty sure you can find a good one who can help out with all the bureaucracy and also with finding your dream flat. They for sure take a significant percentage but if you come to Budapest, live here for a while, get to know the city, the areas pro's and con's, research the market for the current prices, than you will know what YOU want and make sure you won't get ripped off.

Good luck and Boldog Új Évet!