Experts say the real estate prices will suffer another dive this autumn. Even today, a house home in the village or plot of land under construction is two or even three times cheaper than a year ago. Though prices on this market have yet to hit rock bottom, there are some hot deals to found. Of course, low prices often conceal the quality of product. Weekly.ua investigated how to properly appraise the value of a land plot, cut the lawyer’s fees and minimize taxes

Flood brothers
Dmytro Didenko put his land in the KyivSvyatoshyn district up for sale a year and a half ago. Not only is this place beautiful, it is convenient as all the necessary amenities are nearby. The square area of a land plot is 0.3 ha at a price of US $4,000 per 0.01 ha, which is 40% lower than the market price.
Although Didenko is ready to bargain over the phone and offer an additional 20% discount on his asking price, he still cannot find a buyer, and the crisis is not to blame. Two years ago Didenko fell the victim of an unprincipled seller that concealed the fact that the land plot is flooded by underground waters that lie near the surface and only subside at the start of summer. In autumn the land is flooded again. Naturally, building a home in such conditions makes no sense, while drying the plot is too expensive for Dmytro. “Perhaps I should not tell people that the land gets flooded… This is what the realtor advises me… but, on the other hand, somebody will buy the land and have headaches. I’d better wait and see,” says Didenko.

Dmytro hopes that the crisis will subside soon and land will once again be in demand so that he can get rid his headache once and for all. Unfortunately, most people see things the other way round. A forged State Act on the Right to Ownership of Land, the absence of the required documents supporting the act, underground communications under the land plot (for example, government communication cables or gas pipelines; in case they malfunction, the authorities will dig up your land as they pleased), wrong coordinates and the absence of privatization documents. All this is just the tip of the iceberg when purchasing countryside real estate or land. That aside, observing certain basic rules will allow avoiding many unpleasant situations.

How to pick
and is a realtor needed?
Before buying a land plot a buyer should take a closer look at what they are about to purchase.

Of course, some flaws can be detected only by an expert, but the absence of power supply lines, roads and adjacent rivers evoke a sigh of relief. Besides that, if a land plot is near a populated area one is well advised to go and talk with one of the locals. A local granny will not tell you if there are other buyers but she definitely knows about treacherous ground waters. Sometimes, such a conversation can give you enough ground to back out of a proposed deal.
Then one should compare the actual land plot with the one in the draft of the state deed. There have been cases when a potential buyer was shown one plot and after closing the deal it turned out that the actual plot was located several kilometers away.
Ideally, one is best off inquiring with the local land cadastre department about the location of the plot and requesting a land surveyor to check whether or not it complies with the indicated coordinates. The cost of this service ranges from UAH 600 to UAH 1,000, depending on location and the square area. Sometimes real estate agencies order this service and cover the costs, though this is rare. “In 90% of the cases realtors do not have the foggiest idea about the intended purpose of the land let alone checking the land survey,” says Andriy Koshyl, President of the Land Union of Ukraine. Koshyl says the absence of such a practice leads to numerous disputes between neighbors as to where the dividing line is and where a fence should be put up.
The incompetence of realtors often cast doubt on the need to use their services in closing a deal. For example, Tetyana Smirnova found a great land plot for a reasonable price without a realtor.  A realtor’s commission is 2.5-5% of the total amount of the deal depending on the number of middlemen and the reputation of the agency. The two parties to the deal were about to shake hands, but at the last minute the owner changed his mind and decided to hire a realtor to run the deal. “I don’t know what the realtor told the owner, but the latter hiked the price sevenfold. Initially, the price was in hryvnia. The figure remained the same, but this time in U.S. dollars,” said Smirnova. Naturally, the deal was blown away and the plot is still up for sale.
Unfortunately, the presence or absence of a realtor does not always depend on the wishes of one of the parties to a deal. Besides, the participation of a competent realtor greatly simplifies the buy/sell process. A realtor will help minimize taxes, speed up the paperwork and can inspect the “purity” of a land plot. So, whether or not hiring the services of a go-between is totally up to you.
One should factor in that a realtor is not always responsible for the outcome of a deal and that the well-developed brand name of a real estate agency is not always a guarantee of quality service.

How to buy?
Eighteen months ago land within a 30km zone around Kyiv cost US $8,000 per 0.01 ha. Today it is selling for US $1,000. Industry experts warn that a year and a half ago such land was the subject of a battle between representatives of speculative capital. Deals were closed very quickly without proper attention being paid to the legal detail.

This led to a situation where today many dirty proposals from the legal point of view are being offered. One such example is an incomplete package of documents. Koshyl says the following documents are required to properly close a land deal: a State Act ensuring the proprietary right to the land, a letter of reference from the State Land Registry Office on the absence of an encumbrance on land, an independent appraisal of the value of the land for UAH 200-2,000 and notarized consent of a spouse of a land owner to carry out such a deal. Experts advise, first and foremost, to pay attention to the State Act, which often becomes counterfeited during shady deals.
One must also realize that there is an old and new forms of State Act. The old version does not have a land plot registration number. “It is necessary to address the local land registry in order for a number to be assigned to the plot. If there are any problems with the land, for example, the area does not correspond to that indicated in the State Act, it has another owner, etc., a number will not be assigned to the land,” says Koshyl.
Whatever the case, nobody can guarantee that new versions of documents according to which another deal is being made simultaneously have not been processed. This is why Koshyl advises being cautious with salespersons that operate by proxy. Such forged deals often occur in the Obukhiv, Boryspil and Brovary counties (Kyiv Oblast), where all land cadastre information was stolen.
Maksym Kopeichykov, a partner at the law firm Ilyashev & Partners, says that while concluding a deal a notary public should check whether the property of the seller or buyer has undergone foreclosure (in the State Registry of Encumbrances of Real Estate) or information about a ban on the sale of land (in the Single Registry of Bans on the Alienation Real Estate).
Besides the services of the notary public, which are estimated to cost UAH 700-1,000, taxes should be paid as well. The sum depends on the planned purpose of the use of the land. So, if the land is designated for accommodation an owner should pay a state duty of 1% and a 5% income tax. If the land has a building on it, there is no income tax.
Head of the Kashtan 2000 real estate agency Serhiy Pozdnyak says some taxes can be cut out. For example, a tax to a pension fund (1% of the deal) is not payable in the purchase of land with a built structure on it. A physical person is exempt from paying a personal income tax if they are closing their first deal of the year.
Pozdnyak points out the need to get a blank form of the state act when the configuration of a land plot is altered or when they sell the plot. After this the buyer must go to the local State Land Resources Committee to register the deal the Land Registration Boo. The entire procedure for processing purchase/sale documents takes anywhere from a week to two months on average.

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