Owning real estate in the Czech Republic is great, isn't it? If it's your main residence here, you get to enjoy a space that's all your own. If it's your vacation home, at least you have a place to stay while you're in the country. And if you rent out, you get to profit from it with little to no problem at all. All in all, having your own
property in the Czech Republic is pretty sweet, but there may come a time when you have to sell it. When it comes, will you be sure that things will go smoothly? Perhaps if you follow some helpful tips like looking over the contacts and setting up a purchase money custody, they will!
Don’t Forget to Hire A Notary
Even though the buyer hired their own notary for this process, it doesn't mean you don't have to hire one yourself. A notary's job is to make sure every document in this process is legal and valid. However, a notary that you hired can also serve as your legal representative. Especially if you're selling your property in the Czech Republic
on your own. Your notary will draft the contracts, deal with government offices on your behalf, talk to the buyer's lawyers too, and more. So not only will you need to hire a notary, you ought to hire a trustworthy one too!
Be Careful When Registering Your Property
Before you put your property in the Czech Republic on the market, you need to register it first. And make sure you do it flawlessly! Why? Because one mistake can cost you a whole lot of time. Register clerks are pretty meticulous when it comes to this process. They're thorough in checking the documents and ensuring you did everything. If they find one mistake, no matter how small, you'll need to redo the entire application. And it takes around 20 to 25 days to finish this process! And that's on top of the 2,000.00 Kč application fee!
Pay All The Important Costs ASAP
Please don't think that just because you're selling property in the Czech Republic, you won't be spending money. You'll actually be paying a ton of important costs, from taxes and fees to all sorts of charges. To start, there's the Real Estate Acquisition Tax, which makes up 4% of the property value. There's also the capital gains tax imposed on the profit you earn from the sale. And don't forget the notary fees for all the legal work your notary did. As well as your
real estate agent's commission if you hired one!
Look Over The Contracts
Before you sign any contract, you need to look over them first! Especially the reservation contract. Why? Because it's the first document in the process that will legally bind you to the sale. It should include both parties, info on the property, the final price of the property, and details on how the price will be paid. Not to mention the ownership rights of the buyer, special terms & conditions set by both parties, the amount of the deposit paid by the buyer, and the date and time of when it was signed.
Know The Legal Matters Behind Signing The Reservation Contract
Now, what happens when you sign the reservation contract? The document will legally bind you to the sale. You will need to take the property off the market and only sell it to the listed buyer. Of course, on the buyer's part, they'll be required to pay you a deposit of around 10% to 30% of the final price. But even that has an important role in the legal implications as well! If you ever decide to bow out of the agreement—essentially violating the terms in the reservation contract—after signing, you'll be liable to pay the buyer double the amount of the deposit they paid you.
Set Up The Purchase Money Custody
When the payments on the property start, it's a good idea to set up a purchase money custody to safe keep all the money. This is a type of financial scheme wherein you deposit the price of the property before the ownership rights are transferred. And according to
Expat.cz, there are three ways how to do it—custody with an attorney, notary custody, and bank custody. The first two are regulated by law—with the second being more expensive and stricter—while the third is only down when the buyer is taking out a mortgage loan.
Deal With Your Mortgage Payouts Carefully
Speaking of mortgages, you need to take care of your loans before you transfer ownership of your real estate in the Czech Republic. Make sure to explore the contents of your agreement again and see if there are ways in which you can pay it out or transfer it to another property in the country. But you need to be wary too because, in many instances, such payouts result in high penalties. And in the end, on top of the important costs in the process, you're left with another one to pay!
Planning to sell your property in the Czech Republic? You might want to follow these helpful tips. They will ensure that nothing goes wrong. They'll also help you avoid getting into big trouble throughout the process!
