Buying a property
Buying a property is a time-consuming process, which demands a rather complicated legal operation. It is necessary to sign several contractual documents and sort out numerous official documents.
Cooperating with a professional real estate agent can make the process considerably faster and save you time and stress.
COMMON PROCEDURE WHEN BUYING A PROPERTY:
1. Choosing a real estate agent
A real estate agent can help you with selecting a property so that the price and quality correspond with the current situation on the market, while also meeting your requirements. An agent arranges tours of properties, checks all contractual documents with the help of the RE/MAX legal department and assists in inspecting or taking over properties.
2. Selecting a property
The real estate agent enters your requirements into the RE/MAX system. Thanks to this your enquiry is compared with the current offer on a daily basis and you will receive properties that match your requirements by email. You can select the one that best meets your requirements and your financial means.
If you have selected a property, it is possible to conclude a verbal agreement with either the seller or real estate agent, which makes provisions for conditions, terms and liability. During this period a reservation agreement is normally prepared for signing.
4. Reservation Agreement (Priority Reservation Deposit Agreement)
If you are seriously interested in a property, you sign a so-called Reservation Agreement with the mediator (real estate office). This agreement ensures the selected property is reserved for you until the Purchase Agreement is signed.
5. Reservation fee payment (reservation deposit)
The reservation fee is proof of your earnest interest in a property and is included in the purchase price. From the day the reservation fee is paid out, the selected property is reserved for you and it is no longer possible to offer it to other interested parties.
6. Future Purchase Contract
The Future Purchase Contract is concluded when the buyer and seller are interested in concluding a Purchase Agreement, but for certain reasons it is not possible yet (e.g. the buyer is in the process of taking out a mortgage). The Future Purchase Contract obliges you and the seller to subsequently conclude the Purchase Agreement together. The actual Purchase Agreement is generally an appendix to the Future Purchase Contract.
7. Financing a property
In the case that you finance a property by a mortgage, or bank loan, your bank will request a right to lien is established on the property in its favour. The right to lien is normally established by the property owner and becomes valid with entry it into the Land Registry. Your agent can help you finance your property through the RE/MAX mortgage. If you choose a cooperative flat, it is possible to use financing up to 400 000 CZK only, without a warrantor or collateral of another property in the amount of the required loan for transferring membership rights and obligations in the housing cooperative.
8. Purchase Agreement / Agreement on the Transfer of the Residential Unit / Agreement on the Transfer of Membership Rights and Obligations in a Housing Cooperative
Based on the agreements above, ownership is transferred from the seller to the buyer. Ownership rights are transferred by entry into the Land Registry. Cooperative share is transferred upon the instance the Agreement on the Transfer of Housing Cooperative Authority is delivered.
9. Deposit of the purchase price
Deposit of the purchase price helps avoid unpleasant situations. In general practice, the total purchase price after deducting the reservation fee that has already been paid out, is deposited into an escrow account of an independent third party or institute (lawyer, notary, bank), which will pay the payment price to the seller, as agreed to in the Purchase Agreement, however, normally after the property has been transferred in the Land Registry from the seller to you – the buyer, based on presenting the original Title Deed to the depositary. Commonly the amount equivalent to 3% of the purchase price is deducted directly from the deposit for Real Estate Transfer Tax.
10. Application for entry in the Land Registry
Application for entering ownership rights into the Land Registry must always be performed when a change is being made in the owner stated on the Title Deed. Change in ownership at the Land Registry is not required in the instance of cooperative housing, in which case it is replaced by the Agreement on the Transfer of Membership Rights and Obligations in a Housing Cooperative.
11. Taking over a property
Do not forget that property is not insured when transferred to you. Your real estate agent can arrange convenient insurance through a recommended RE/MAX supplier.
12. Renting out a property
If you bought the property as an investment, we will be happy to help you rent it.