Czechs take risks when buying property for fear that other applicants will get there first
Czechs are a conservative nation. We simply do not have wandering in our blood and do not like moving once we have become accustomed to life in a particular area. This is true even if we are offered our dream job in another city or the chance of better living conditions. Yet when we do buy a new flat, the whole process often proceeds surprisingly quickly. The time in which inexperienced buyers commit themselves by signing a reservation agreement is record-breakingly short. Experts warn against hasty decisions, which can unnecessarily cost you hundreds of thousands of crowns.
Services covering the basic essentials of a safe property purchase are entirely commonplace in Western European and American markets. They include an independent legal review of all contracts and documentation, as well as an assessment of the property's technical condition. This protects inexperienced buyers against hidden legal or technical defects, the removal of which could later cost them a further hundreds of thousands of crowns.
“Obtaining legal and building-technical advice on a selected property will delay the entire process by no more than a few days. In return, you gain lifelong peace of mind that you have purchased a defect-free property at a price reflecting its true value. In Western countries, it is customary for brokers and sellers to respect these buyer-side safeguards. Conversely, if they refuse to wait and pressure the other party into acting quickly, it may signal that there is something wrong with the property,” explains David Novotný, owner and managing director of the independent real estate company Bohemian Estates International. When we buy a property, it is often a lifetime investment into which we put our life savings. Yet in many cases, Czechs still rely on luck and rush headlong into a purchase.
The current property-market situation means that buyers feel pressured by the competition. Put simply, if I do not decide quickly and take time to think it over, other applicants will get there first and snap up my dream property.
“Unfortunately, this uncertainty and stress are often fuelled by estate agents themselves, whose interest is to sell the property as quickly as possible, without delays or complications. At viewings, they suggestively describe long queues of other applicants and create time pressure. We advise clients never to sign a reservation agreement at the first viewing. I understand these concerns, but from experience I can say unequivocally that finding another flat is far less of a problem than buying one at an inflated price, with legal or technical defects, or on unfavourable terms. A reservation agreement is binding and it is not at all easy to get out of it, even if you later discover objective shortcomings,” explains David Novotný of Bohemian Estates International, citing examples they have encountered in the past.
“From experience, I also know cases of people who hastily signed a reservation agreement and soon discovered that they would not receive a mortgage loan from the bank. Some realised their mistake only after a few years, when they tried to sell the property but could not do so for as much as they had paid for it. In effect, they lost hundreds of thousands of crowns,” says David Novotný.