Reservation (Deposit) Agreement When Buying Property in Bulgaria – What You Should Know
Buying real estate is a major step, and in Bulgaria the process often begins with signing a reservation (or deposit) agreement. While this document is not legally mandatory, it is widely used in practice as it protects the interests of both buyer and seller and confirms the seriousness of their intentions.
What is a reservation agreement?
A reservation agreement is a preliminary contract between the buyer and the seller, in which the buyer pays a deposit and the seller agrees not to offer the property to other buyers for a certain period.
Its main functions:
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Confirms both parties’ intent to proceed with the sale
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Sets out the key terms of the future transaction
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Provides mutual protection and clarity
How much is the deposit?
The deposit usually ranges between €1,000 and €5,000, depending on the price of the property. In some cases, it may be a percentage of the sale price (e.g., 5% or 10%). This amount acts as security that the buyer is committed to proceeding.
What does a typical reservation agreement include?
A standard reservation agreement typically contains:
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Full details of both parties (buyer and seller)
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A clear description of the property
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Amount of the deposit and payment method
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Deadline for signing a preliminary or final contract
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Terms in case either party withdraws
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Liabilities and penalties
Legal consequences
If the buyer cancels without valid reason, the deposit is usually forfeited. If the seller cancels, they are typically required to refund double the deposit, in accordance with Article 93 of the Bulgarian Obligations and Contracts Act.
Key tips when signing a reservation agreement:
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Sign the agreement only after visiting the property and verifying ownership
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Ask for a copy of the title deed and property layout/cadastral documents
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Make sure all agreements are in writing
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Have the contract prepared or reviewed by a legal expert
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Ensure payment is documented – via receipt or bank transfer
Why sign a reservation agreement?
In a fast-moving property market like Bulgaria’s, a reservation agreement gives both parties peace of mind. It temporarily secures the property, allowing time for financial arrangements (such as a mortgage) and preparation of documents before the final notarial deal.
If you are buying or selling property in Bulgaria and need legal assistance or help drafting a reservation agreement, the team at New Home Bulgaria is here to support you — from the first viewing to the final notarial transfer.
