How to buy real estate safely
When buying real estate through an estate agent, a reservation deposit usually has to be put down first. The reservation deposit is not intended for the seller ? it usually constitutes the agent?s commission for brokering the deal. You will gain much greater certainty when buying real estate if you abide by the following simple principles.
Place the reservation deposit in custody
When buying real estate it is safer to place the reservation deposit in the custody an independent third party: in an escrow account with a bank or in the custody of a notary or lawyer (your own lawyer), with the proviso that the reservation deposit will not be paid out to the estate agent until the petition for your ownership of the real estate to be entered in the real estate has been submitted (i.e. when purchase contracts are handed into the submissions department of the appropriate real estate registry office) and an extract of the ownership deed furnished with a seal related to your purchase is presented. If you are buying a cooperative flat, you can stipulate that the reservation deposit will only be released from custody when a document confirming that membership rights and obligations have been transferred to you is presented.
Payment after purchase contracts have been handed in to the real estate registry office?s submissions department
You will achieve greater certainty that the real estate will be transferred to you if you stipulate that the money from the mortgage loan, and maybe your own invested money, will be released once an extract of the ownership deed furnished with a seal related to your purchase is presented or ? in the case of cooperative flats ? once a document confirming that membership rights and obligations have been transferred to you is presented.
How to start arranging a mortgage and how the process takes place
It is a good idea to start arranging a mortgage at the moment when you definitively decide to buy a selected property. Arranging the loan will then take place swiftly, but requires enough time to prepare all the necessary materials for submitting a loan application, most notably:
- estimate of the value of the real estate done by an authorised expert of the bank
- documents proving the loan applicants have sufficient incomes
- signed contracts on a future purchase contract
When the loan has been approved, the pledge contracts are signed by the sellers and the purchase contract is signed. Once the pledge and purchase contracts have been lodged with the real estate office?s submissions department the buyer gives the order for the money from the mortgage loan to be released to the sellers.
Arrange a mortgage, then look for a property
You can get a mortgage in advance and then start looking for a property that suits your requirements. If you have a pre-approved mortgage you will have a better bargaining position with estate agents and you will have time, up to several months, to buy your new house or flat. Just two or three visits to our office will help you save up to tens of thousands of Czech koruna and will substantially diminish the risks that may arise during the loan approval and property buying process. What is more, you?ll save lots of time as we take care of the series of unpleasant and protracted administrative steps on your behalf.
