Buyer and seller have agreed a price, a preliminary contract is signed, the bank has ordered a valuation — and the report comes back below the price. It is one of the most common reasons a mortgage-financed purchase stalls. The good news is that there is usually a way through, once you understand how the valuation works and what your options are.
We describe the overall route to a home loan in our mortgage guide for 2026. Here we deal with this one problem.
A bank cannot hand the valuation to just anyone. Under Article 50 of Bulgaria's Consumer Real Estate Credit Act (ЗКНИП):
The Independent Appraisers Act governs the profession: the register is kept by the Chamber and is public (Art. 15), and an appraiser may not value a property if they are related to the client or the owner, or have an interest in the property (Art. 21). You can look up the appraiser in the public register.
Before the contract, the bank must also tell you whether a valuation is needed, who arranges it and whether it costs you anything (Art. 5(2)(13) of the Act).
The price is the outcome of a negotiation between two people. The valuation is a professional opinion of market value, based mainly on comparable transactions. Gaps usually come from:
The Bulgarian National Bank caps a home loan at 85% of the property's value (LTV, in force since 1 October 2024). Standard bank practice is to apply that ratio to the lower of the two figures — the agreed price or the valuation. This is credit policy rather than an explicit legal rule, so confirm it with your bank.
Illustrative example:
| Valuation = price | Valuation below price | |
|---|---|---|
| Agreed price | €200,000 | €200,000 |
| Bank valuation | €200,000 | €180,000 |
| Maximum loan (85%) | €170,000 | €153,000 |
| Own funds needed | €30,000 | €47,000 |
A €20,000 shortfall in the valuation becomes €17,000 of extra deposit — on top of fees and transaction costs.
1. A larger deposit. The simplest route if you have reserves. Check the instalment on the smaller loan with our mortgage calculator.
2. Renegotiate the price. The valuation is an independent document and a strong argument with the seller, especially in a slower market. A compromise is common: the seller absorbs part of the gap, the buyer covers the rest.
3. Ask for a review. If you believe the appraiser missed something — wrong floor area, an unrecorded renovation, unsuitable comparables — ask the bank for a review and bring concrete evidence. "The property is worth more" will not help; comparable completed sales and documents might.
4. A new valuation or another bank. Some banks allow a valuation by a different appraiser from their panel; another bank will order its own. Either way there is extra cost and time, and no guaranteed result.
5. Additional collateral. Banks sometimes accept a second property as security to cover the gap. That ties the second property to the loan as well, so think it through.
6. A safeguard in the preliminary contract. If you are buying with a mortgage, agree in the preliminary contract (предварителен договор) what happens if financing is not approved in the amount needed — a deadline, return of the deposit, the option to renegotiate. This clause is written before the valuation, not after.
A low bank valuation does not automatically mean your price is unrealistic, but it is a signal. If several buyers run into it, read how to price a home when there are fewer buyers. Have documents on floor area, permits and renovations ready — they help the appraiser see the full value.
The applicant usually pays, and the fee is set in each bank's tariff. Where a valuation is required for the loan, its cost is part of the total cost of credit (§ 1, item 17 of the Act's Supplementary Provisions) and therefore of the APR. Ask in advance whether a repeat valuation is charged again.
We can check the price against actual sales in the area before you sign, to reduce the risk of a surprise. If the valuation is already in, we will help you weigh which option makes most sense. Call us or visit our office.
This is general information, verified October 2026. It is not legal or financial advice for a specific case — each bank sets its conditions individually.
