The first step in the entire process is the evaluation of the property and subsequently finding a prospective buyer. As a seller, consider whether you will look for a buyer yourself (e.g., among family members and acquaintances) or entrust the sale to a professional, such as a real estate agent. In the article we would like to introduce you into real estate pre-purchase phase for buying a house, flat and/or land in Czech republic.
Real estate pre-purchase evaluation
Determine the real market value of the real estate (purchase price of the property). The price of the property is usually set based on criteria such as:
- Location
- Property usage
- Condition of the property
- Average price in the surrounding area
- Demand
Note: You can use an appraiser or a court expert to determine the value of the property.
Pre-purchase selection of the parties
Pre-purchase real estate steps include:
- Property Viewing: Prospective buyers will view the real estate and assess whether it meets their requirements and expectations. Conduct viewings should take place only with individuals who have a genuine interest. Set your own times for property viewings that are convenient for you. Do not allow potential buyers to dictate terms. It is also recommended to schedule individual property viewings flexibly, one after the other.
- Buyer Questions: Potential buyers may have questions regarding the property, such as the condition of the building, description of interior equipment, parking spaces, heating, eco category (very important criteria these days) and other information. Be prepared to answer these questions. Although this step may not seem significant, the questions asked can give you an indication of whether the other party (buyer or selle) is genuinely interested in purchasing / vending the property.
- Checking the Financial Situation: As a seller, you may require the buyer to prove their financial resources for purchasing the property. The buyer must be able to pay the purchase price. Check the buyer through available registers (e.g., insolvency register) and records (e.g., execution register). This step can help you avoid issues related to withdrawal from the contract or claims for damages. The buyer also needs a lot of information regarding:
- Don’t forget about any debts or obligations from the joint housing fund of the homeowners’ association (SVJ) or registered property rights. The buyer must be able to meet these obligations.
- If you are the buyer, carefully consider your source of financing. If you are taking out a loan to buy the apartment, be cautious in choosing the lending institution.
Real proprerty pre-purchase negotiation
Negotiating the Terms of Sale: At this stage, the seller and buyer agree on the basic terms of the sale, such as the purchase price, the date of property transfer, and other conditions. Remember, you likely do not know most buyers personally. Therefore, it is recommended not to rely solely on what the buyers have told you. Always negotiate the contract terms and verify the buyer before the transfer of the property.
Agreement on the basic contractual arrangements is the symbolic conclusion of the pre-contractual phase. At this point, you will have a general understanding of what property you are buying and for how much.
Avoid unfair practices of some real estate agents
It is important to emphasize that the pre-contractual phase is governed by legal rules. Negotiations over a contract can be conducted freely, and it is up to you whether or not to enter into an agreement. However, if the parties reach a stage where the conclusion of the contract appears highly likely, failure to conclude the contract may be considered unfair conduct. If you are merely pretending to sell or express interest in buying, you could find yourself in a position where the other party may claim compensation from you. This does not apply, of course, if you have a justifiable reason to terminate the negotiations or if you simply cannot agree on the terms of the contract with the other party.
Negative consequences
The consequences in such cases are rare, and this applies until you actually commit to the sale or purchase, usually by signing a reservation (real estate) contract or concluding a contract to contract that sets out the legal consequences. Once such a contract is signed, the parties can mutually enforce compliance with obligations even in the pre-contractual phase. Real estate mediation plays a significant role in this regard. The turning point in the process of transferring property ownership is the signing of the reservation (real estate) contract or the contract to contract. If you wish to withdraw from these contracts, you will generally be penalized with a contractual fine. Therefore, it is advisable to carefully choose your partner from among real estate agents.
Conclusion
To make it easier to understand the process of transferring ownership rights to real estate, we have prepared a series of articles for you that describe the basic steps of the entire process of transferring ownership rights to real estate. By knowing the individual steps, you will better understand your rights and be able to protect them more effectively. With this article, we are opening a series of topics that we are preparing for you in individual stages. (Facebook, LinkedIn či Instagram)
