As real estate prices climb confidence returns to would-be buyers. One of the most common questions we get asked by prospective buyers is how long the property purchase process will take. The answer often surprises non-Czechs because it can be much longer than they are used to.
We have assisted buyers with hundreds of purchases over the years so the following guidelines present the most common processes and timings.
Reservation
It is common for a reservation to be asked for in order for the agent to stop offering the property to other buyers. Although this first step had been an area where real caution was needed in the past it has since greatly improved.
It is often possible to skip this first step and start work directly on the future purchase or pre-purchase contract. Once a lawyer is involved the seller will most often put the sale on hold giving time to work through the agreement.
Be very cautious if paying a reservation to the real estate agent that you have the contract checked. There is not a regulatory board for real estate agents and your only recourse against a fraudulent agent can be to take them to court – a lengthy process in Czech Republic.
After your reservation your purchase process can take two different routes depending on whether you are purchasing in cash or with a mortgage.
Purchasing with cash
Upon signing of the purchase agreements the purchase price is deposited (this is the recommended route) to an escrow or third party account. Normally the escrow agreement allows 15 days from signing for this amount to be transferred to the notary account. If it is ready and just needs to be wired from abroad, it normally takes 3 to 5 days.
During this time period, the purchase contracts with verified signatures are held by the escrow agent. When the purchase amount arrives on the account, the purchase contracts are released to the Land Registry for registration.
Purchasing with a mortgage
Upon signing of the pre-purchase (also called future purchase) agreement, often an amount of the purchase price is deposited to the escrow account. This is often the amount that the buyer is using from their own cash. In the case of 100% financing, this does not have to be the case.
Upon signing of the pre-purchase (also called future purchase) agreement, often an amount of the purchase price is deposited to the escrow account. This is often the amount that the buyer is using from their own cash. In the case of 100% financing, this does not have to be the case.
Now the mortgage application process begins in earnest. The collection of required documents, time for the bank to approve and drawdown is about a six week process. Depending on the complexity and bank, it can be more or less.
Once the mortgage has been approved it is usually drawn down and deposited to the escrow account or to the bank of the seller in case they already have a lien registered on the property. Normally this all takes place before the purchase agreement is signed. (Note: Some banks may however require signing the purchase agreement before which may be a complication for some sellers and therefore it is a good to check the requirements with your bank or seller before signing the pre-purchase contract.)
Allow at least 5 days to conclude a mutually suitable date for signing the purchase agreements between the buyer and seller.
Property purchase common conclusion
Once the documents are submitted to the Land Registry it is just a matter of time before the change is registered and you as the buyer become the owner.
Right now you can count on the process in the Land Registry taking a minimum of 20 days (the legal requirement), but usually from 4 to 6 weeks.
During this time period of registration, it can be possible to agree on the turnover of the property but most often this only occurs after the change of ownership is registered in the Land Registry and the money is transferred from the escrow to the seller.
Breakdown of a cash property purchase timeline
| Description | Average Length of Time (days) |
| Checking of reservation contract, signing and paying the reservation amount | 10 |
| Negotiation of Purchase Contract | 14 |
| Finding mutually agreeable signing date | 5 |
| Transfer of purchase amount to the escrow account | 10 |
| Registration of new ownership in Land Registry | 30 to 45 |
| Handover of property | 10 |
| Total | 79 to 94 (3 months) |
Breakdown of a mortgage property purchase timeline
| Description | Average Length of Time (days) |
| Checking of reservation contract, signing and paying the reservation amount | 10 |
| Negotiation of Pre-Purchase (or Future Purchase) Contract | 20 |
| Finding mutually agreeable signing date (Pre-Purchase and escrow contracts) | 5 |
| Securing mortgage with bank | 30 to 45 |
| Drawdown and transfer of purchase amount to the escrow account | 10 to 20 |
| Finding mutually agreeable signing date (Purchase contracts) | 5 |
| Registration of new ownership in Land Registry | 30 to 45 |
| Handover of property | 10 |
| Total | 120 to 160 (4 to 5.5 months) |
Want professional help on a property purchase? Drop me an email – [email protected].
Updated/Aktualizováno: April 28, 2016,
How important is the usage of a escrow account when purchasing a property with 100% mortgage? What is the risk or impact of not using an escrow account in this scenario?
Hi Silva, It is always good to have the money in escrow while you are being registered in the Land Registry as the owner. In some cases the sellers have received the purchase money but the buyer has not been registered as an owner in the Land Registry because of minor legal glitches. You can always be sure of seller cooperation for sorting out these problems if they haven’t received their money yet. Nathan
Is it possible to sell property in Prague via a third party or Power of Attorney if not in the country?
Hi Jonathan, Yes, this is allowed but the power of attorney needs to be signed with notarized signature. In fact, we offer a power of attorney sale service. Drop me an email if you are interested in more details: [email protected]. Nathan
Hi Nathan,
How all the process goes if half of the price is paid by cash and the other half out of mortgage?
Thanks,
Akos
Hi Akos, if there is a mortgage it will generally follow the timeline given, regardless of the amount of the mortgage. Nathan
HI
In relation to the PRE-Purchase contract/Agreement and the final purchase Contract/Agreement does this Contract/agreement need to be signed and witnessed in the presence of a lawyer or notary or what is the process specifically in relation to the Purchase Contract. Where can I find more information on this important document.
Thanking you in adavance
Alan
Hi Alan, Thanks for the question. Only the final purchase contract which goes to the Land Registry NEEDS to be signed with verified signatures but often the buyer/seller (other party) will insist on verified signatures on the pre-purchase agreement. It is the safer course. I am sorry but we don’t have any other articles written on this subject. Nathan
Hello Nathan,
Can you recommend a lawyer for a property purchase in the Bohemia region that speaks English. Thank you.
HI. Do I need residence in CR. You buy apartment as I am foreigner ?
Thanks.
Hadi
Hi Hadi, No you don’t need a residency permit to buy a property in Czech Republic. Nathan
Hi Nathan,
Do you guys offer all the services for buying a property in Cz Rep or at least point the way to lawyers or companies that can be trusted etc. It all seems a bit shady and I’d rather use you guys from start to finish. For peace of mind.
Hi Michael, yes for sure. We offer the complete package of services. I am out of the country at present but I will pass your contact information to our team. Nathan
Can a foreign student buy a property with the support of parents? She would have the residence permit; we would be the
‘backers’.
Thanks.
Felicia
Hi Felicia, There is no problem with the purchase and registering the property in your name if you bought cash. Typically for a mortgage the banks are looking for income coming from within Czech Republic. For the latest status on mortgages for foreigners I would recommend contacting my colleague Dušan Otradovec: [email protected]. Nathan