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No accreditation is necessary. No functioning oversight committee exists. No schooling is required or offered. No degree or certificate is required. No official standardization committee exists. Incorporation is not required.
What is required under Czech law is simply a 1000 CZK license, which is often neglected because it forces the agent to register for tax purposes.
There is one association of real estate offices called ARK CR however, we have found the effects of this organization on the actual conduct of its members to be minimal.
In addition, it is sometimes the case that real estate ‘agents’ to team up with ‘lawyers’ who are also not licensed attorneys, but paralegals or law students.
Don’t think it’s THAT bad? Here are some non-client testimonials I have received:
Cyril Fitzgerald (Dublin, Ireland):
‘Just to let you know, I read with great interest your article/page regarding property purchase in the Czech Republic. Having no experience whatsoever but knowing what I wanted to purchase, I guessed things would go in a straightforward manner.’
‘Let me simply outline the problems I encountered…#3) The reality or property companies simply wanted me to do the deal at all costs, no matter what. Changing their minds seemed commonplace and they will in fact, sell you anything at all. They will simply talk their way out of problems that are perfectly real to you, the buyer. They simply want the deal, and that’s that. #4) Hidden costs, for example, charging the buyer fees for the purchase when in fact the seller pays the costs… #6) Finally the bureaucracy was the most daunting element. The less efficient the structures, the more time wasting and draining the whole procedure seemed…’
‘The experience may have cost me approx 3,000 euros or so all told, but look what i could have lost. EVERYTHING.’
‘My thanks to Czech Point 101 for setting the record straight with their experience and knowledge. Wish I had read their reports first, but knowing me, I had to find out for myself.’
Karl Jeffery (London, UK):
2005 :: ‘So far we had a meeting with the estate agent and the solicitor and the seller – it turned out the estate agent hadn’t done any work at all, hadn’t got any of the right documents, and the CZK 55,000 ‘deposit’ they were asking for was actually a finder’s fee which they expected to be paid by the buyer (us) whether or not the flat was eventually sold. ‘
2006 :: ‘We gave up in the end and decided to put the money into a new house in London – I think we tried about 5 places but after spending money on solicitors etc none of them were actually buyable. With the last place we looked at, the vendor was unable to come up with the right documents. My conclusion was that nobody actually manages to buy a property in Brno, but lots of money is being made from deposits paid by gullible German dentists.’
Dan Gendron (USA) with Czech wife:
‘I appreciate the follow up. Just to let you know I’ve referred a few other people to your web site that are considering buying in Czech. We are going to buy a 3 plus 1 flat in Frydlant. It’s a co-op and we will just pay cash for it. We were going to buy a house but we will wait until the next visit for what seems to be a more complicated purchase. The process was overwhelming for my wife and I wish I had used your company…If we do end up looking for land or a house I will be sure to do it right next time and call your company first and save myself and my wife a lot of aggravation.’
Alan and Eve Hunt
Read the full story: Cesky Krumlov Property Purchase Horror Story
Alena Bozděchová
Even for Czech citizens there are land mines: Czech Family Gets Evicted From a House They Thought They Bought in 1983
Are Czech Republic real estate agents accredited?
Submitted by Nathan Brown on – 8 Comments |
This is an extremely important question, because the answer is a 100% ‘NO.’
For any individual to sell real estate in the Czech Republic – that is, in order to represent the buyer, seller or both parties – and/or to represent any investment, development or property firm to a foreign or domestic investor:
Cesky Krumlov - scene of a recent real estate agent fraud
No accreditation is necessary. No functioning oversight committee exists. No schooling is required or offered. No degree or certificate is required. No official standardization committee exists. Incorporation is not required.
What is required under Czech law is simply a 1000 CZK license, which is often neglected because it forces the agent to register for tax purposes.
There is one association of real estate offices called ARK CR however, we have found the effects of this organization on the actual conduct of its members to be minimal.
In addition, it is sometimes the case that real estate ‘agents’ to team up with ‘lawyers’ who are also not licensed attorneys, but paralegals or law students.
Don’t think it’s THAT bad? Here are some non-client testimonials I have received:
Cyril Fitzgerald (Dublin, Ireland):
‘Just to let you know, I read with great interest your article/page regarding property purchase in the Czech Republic. Having no experience whatsoever but knowing what I wanted to purchase, I guessed things would go in a straightforward manner.’
‘Let me simply outline the problems I encountered…#3) The reality or property companies simply wanted me to do the deal at all costs, no matter what. Changing their minds seemed commonplace and they will in fact, sell you anything at all. They will simply talk their way out of problems that are perfectly real to you, the buyer. They simply want the deal, and that’s that. #4) Hidden costs, for example, charging the buyer fees for the purchase when in fact the seller pays the costs… #6) Finally the bureaucracy was the most daunting element. The less efficient the structures, the more time wasting and draining the whole procedure seemed…’
‘The experience may have cost me approx 3,000 euros or so all told, but look what i could have lost. EVERYTHING.’
‘My thanks to Czech Point 101 for setting the record straight with their experience and knowledge. Wish I had read their reports first, but knowing me, I had to find out for myself.’
Karl Jeffery (London, UK):
2005 :: ‘So far we had a meeting with the estate agent and the solicitor and the seller – it turned out the estate agent hadn’t done any work at all, hadn’t got any of the right documents, and the CZK 55,000 ‘deposit’ they were asking for was actually a finder’s fee which they expected to be paid by the buyer (us) whether or not the flat was eventually sold. ‘
2006 :: ‘We gave up in the end and decided to put the money into a new house in London – I think we tried about 5 places but after spending money on solicitors etc none of them were actually buyable. With the last place we looked at, the vendor was unable to come up with the right documents. My conclusion was that nobody actually manages to buy a property in Brno, but lots of money is being made from deposits paid by gullible German dentists.’
Dan Gendron (USA) with Czech wife:
‘I appreciate the follow up. Just to let you know I’ve referred a few other people to your web site that are considering buying in Czech. We are going to buy a 3 plus 1 flat in Frydlant. It’s a co-op and we will just pay cash for it. We were going to buy a house but we will wait until the next visit for what seems to be a more complicated purchase. The process was overwhelming for my wife and I wish I had used your company…If we do end up looking for land or a house I will be sure to do it right next time and call your company first and save myself and my wife a lot of aggravation.’
Alan and Eve Hunt
Read the full story: Cesky Krumlov Property Purchase Horror Story
Alena Bozděchová
Even for Czech citizens there are land mines: Czech Family Gets Evicted From a House They Thought They Bought in 1983
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[...] přeloženo z anglického do českého jazyka – pro originální jazykovou verzi, klikněte zde): Cyril Fitzgerald (Dublin, Irsko): „S velkým zájmem jsem četl Váš článek ohledně [...]
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[...] why so many transactions happen outside the real estate industry please see our previous article: Are Czech Republic real estate agents accredited?) It seems apparent that the benefits of having such a database would be a huge benefit to all [...]
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Please see the full story for this last couple here: http://www.czechpoint101.com/newsletter/czech_property/cesky-krumlov-property-purchase-horror-story/
This is one of the best post I have ever read, I would love to read more in future. Keep up the good work.
I just want to comment on this post and the “horror story” one. It is true that these kind of stories can happen here, but they can also happen just about everywhere. I understand you want to promote your services, but by presenting the Czech real estate agents situation as you do, you simply drive small investors away. It’s a common cliche in Western Europe that in the “former communist” Europe, it’s only dodgy businesses and rip-offs, but my experience and that of many others, shows the opposite, that investment here is in many ways safer and more straightforward than in the West, if not as profitable as could be expected.
Of course if you forget due diligence, and wire money without having even signed any sort of document, get ready for the worse, but that is not a Czech specificity.
Hi Ben,
Point well taken. There are definitely ‘rogue’ agents in every environment.
Unfortunately in Czech Republic there is no regulatory board and no education needed to be an agent. With courts being extremely slow there is no real consequence for agents who act unethically.
My personal experience over many dealings with real estate in Canada and in Czech Republic is that there are WAY MORE unethical practices in the real estate industry in Czech Republic.
One example: in Western countries the real estate agent is required to act in the middle of the buyer and seller. Often they work with a legal office which prepares all the contracts. There is strict code that forces them to protect the rights of both parties (buyer and seller) and serious consequences if they don’t. The agent and their broker could lose their license.
In comparison in the Czech Republic a buyer would be foolish to not have a separate legal team representing them. To purchase based on the idea that the real estate agency is going to protect them and conduct due diligence on the property ownership is ridiculous.
But hopefully this will be changing as the Ministry of Regional Development is planning a regulatory board: http://www.ceskapozice.cz/en/news/politics-policy/ministry-pledges-action-clean-real-estate-jungle.
Nathan
Here is a follow-up article form CzechPosition: http://www.ceskapozice.cz/node/13129.
Good quotes from the article:
“the contracts are also very biased: If there are some mistakes or aberrations on the client’s part, the sanctions are very severe, but if the agency is at fault, there are no repercussions.”
“According to MindBridge Consulting, some Kč 160 billion flows through real estate agencies each year. In the Czech Republic, though, virtually anyone can do business in this sector, which has no strong professional organization overseeing it — unlike, for example, the country’s architects and lawyers.”
A realtor should have a license in order for the government to regulate his tax due when he will get a certain commission.
I am so surprised with the system.
Well, I would suggest you to do an online search and take help from online real estate portals in your area as it is the easiest way I have ever found to find real estate agents, brokers or other related information and service.