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Real estate market in the Czech Republic

Real estate market in the Czech Republic

How does the real estate market work in the Czech Republic? What players are there? What tactics and tricks are used? This is a question that anyone who is trying to buy or sell a property should know the answer to. However, the answers you need are extremely difficult to find. You will certainly find it hard to discover how the market operates anywhere else than on this site. We have no reason to keep anything secret and so we won't.  But I again say that you will find it very difficult to find information beyond this article, because most real estate market players do not want anyone to know how things work. Real estate spins a lot of money and knowing how it all works is a threat to the whole carousel - if too many people become clued up, brokers won't be able to justify their juicy 6% commission and developers won't be able to dictate their terms completely unilaterally, etc. Big money attracts people who you could call wolves or sharks so if you don't want to end up as a tasty dessert, you have to know how to defend yourself! There are a lot of stories and rumours swirling round among people, half-truths, but also completely unbelievable facts that have happened and are happening on the real estate market. The real estate market is therefore shrouded in mystery. It can be a thing so extremely complicated that your average Joe cannot stand it. And they are quite right! But a person educated in the field is a person who definitely cannot be an easy victim. In the following paragraphs, you will learn just how everything works and you can enter the real estate market with knowledge gained through a decade of experience! And that's the only way not to be easy prey!

     First of all, we should describe the people you will actually meet on the real estate market. I don't mean their character types, but their professions and offices, etc, and how they will work with and impact on your intention to buy/sell/rent real estate.

 

  1. Owners - people who own real estate.
  2. Buyers - people who intend to buy a property for themselves
  3. Real estate agencies - companies that work with real estate brokers
  4. Real estate brokers - entrepreneurs who mediate the purchase/sale of real estate
  5. Lawyers, attorneys - persons who provide legal services for real estate management
  6. Developers - people who build real estate for the purpose of selling it
  7. Cadastral office - the state administration which maintains the real estate cadastre
  8. Tax office - the state administration which burdens real estate with taxes
  9. Financial advisors - people who mediate the financing of real estate from external sources
  10. Banks - by far the largest group of financial institutions that provide real estate financing
  11. Real estate appraisers - persons who can officially assess real estate prices
  12. Builders - people who build real estate
  13. Building Authority - the state administration concerned with the construction or reconstruction of real estate
  14. Designers - engineers combining construction and the legal aspects of construction
  15. Municipal authorities - independent local government offices with the possibility to intervene in planning and construction

 

 

These first 11 are people you are likely to meet during the process of buying or selling real estate if you are financing it with a mortgage. If not, the list is shorter, just the first eight. When renting an apartment, you might in the end only meet only one of them. Probably no one reading this will be overseeing their own development project, so they don’t need to deal with the whole list of people involved in the real estate market. How many people you need varies a great deal. Furthermore, it's definitely not always one special person in each case. These functions can be combined, e.g. the author of this article is an owner, buyer, real estate agency, real estate broker, builder and lawyer in one person. A real estate agency usually, but not always, employs real estate brokers and lawyers separately, so it connects these two people with these two different sets of skills in one company. While no one has any doubt about the definition of most of the above entities, for real estate agencies and brokers, at first glance defining them is not so crystal clear. The real estate market in the Czech Republic works like a crazy jungle, where similar rules apply. In other words, there are almost none. And especially thanks to real estate intermediaries in general. Some developers and builders also do not improve awareness and understanding of the real estate market. State administrations do not lag far behind in this regard and instead of solving problems, it offers half-hearted solutions and is often completely counterproductive. Sadly, they do not help people in the way we might hope.

 

As a result, thanks to this situation, even developers cannot build as much as is needed, and this is one of the reasons why real estate prices in the Czech Republic are still rising. As for foreigners who just want to live somewhere, the situation is even worse because they encounter a language barrier, which is due to the fact that learning English at school and more widely only began in the 1990s so many people over the age of 30 do not speak the language at all. Unfortunately this age group constitutes the vast majority of people on the list above. In the event that you need to solve something in the real estate market, I recommend finding a representative who operates on the real estate market, can deal with all other entities and at the same time can translate everything into completely understandable language. This will ensure your decision can be about whether you like the property and if it is advantageous, and not about wasting time thinking about whether you have understood correctly all the details and whether someone is tripping you up rather than helping you.

 

Since there are a lot of groups and they are quite specific, we will address them in more articles in this thread at a later date! If you do not want to wait for all the necessary information to be published, please contact us with specific questions - we will be happy to help and answer all your queries.

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