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How does a Czech property purchase ensue?

Starting the purchase of a property in a country other than our home one can be a terrifying experience. There is just so much money involved, hard-earned money, that it is the course of wisdom to educate ourselves on the basics of the process.

An experienced legal team will handle all the details but it is still valuable if we understand how the general steps proceed so there are no surprises.

We strongly recommend that purchases go through an escrow account so we have included this as the default method described.


Watch a YouTube video about use of escrows in the Czech property purchase process


There are two basics flows depending on whether the buyer is buying 100% cash or with a mortgage.  Let’s examine the steps based on these two scenarios.

Please note that there can be small variations of the methods below but these are the basic steps.

Cash and Financed buyer – Reservation agreement

Most real estate agents will push immediately for you to sign a reservation agreement, sometimes even on the first viewing.

“We have another buyer willing to pay full price tomorrow” or “we have lots of interest in this property so we can only give you until tomorrow to make up your mind on this property” are common tactics that can be used to push you to sign a reservation agreement and pay the reservation amount.

Please note that in the Czech Republic most reservation agreements are setup in a very one-sided manner so that if for any reason (even through fault of the seller deciding not to sell) you do not complete the purchase your deposit will be kept.

Especially in the buyer’s market that we have presently we encourage buyers to skip the reservation process and go immediately to signing of the future purchase or purchase contract.

We have found that in 99% of cases when a seller / real estate agent sees that you have a lawyer actively working on the contract they will not offer it to anyone else.

At this point the process divides based on whether the buyer is purchasing with 100% cash or with financing.

Financed buyer – Future purchase or Pre-purchase agreement

This contract is required by the banks in order to release the mortgage money. Usually it contains almost entirely the terms of the purchase contract.

Often at signing of the future purchase contract and concluding of an escrow agreement the deposit is sent to the escrow contract. The mortgaging bank will want to see this before releasing their funds.

Before releasing the funds the mortgaging bank will also register their lien on the property. In the case that the seller also has a mortgage with a lien on the property, this could happen at a later point.

Cash and Financed buyer – Purchase agreement and Land Registry

When the purchase contract has been finalized and signed by both parties, the full purchase amount is deposited on the escrow account. This can involve the complete transfer from a cash buyer or the mortgage amount being sent in by the financing bank.

Once all the money is in the escrow, the escrow holder submits the signed purchase contracts to the Land Registry to register the change in ownership.

All parties are notified by the Land Registry when the changes are registered. At this point the purchase price is released to the seller.

Cash and Financed buyer – Turn-over

The purchase contract will typically stipulate that the seller must turn the property over to the buyer within a certain number of days after their receiving the purchase money from the escrow.

It is always best to have a turn-over protocol signed at the time of turn-over documenting the condition of the property and what other items may have been included (keys, furniture, etc.)

Typically we have found that for a cash buyer the whole process from reservation to turn-over can be a 2 to 3 month process.

For a financed buyer who doesn’t already have everything setup at the bank the process typically is 4 to 5 months.

by Nathan Brown - - owner and managing director of Czech Point 101  - "You’re in good hands whether buying, selling or managing property in the Czech Republic."      

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