Archive for November, 2006

Grown up things

Four years ago (give or take a few months) I remember that I gave up my last key.   Keys are a symbol of things for which you are responsible, and four years ago I wasn’t responsible for anything. 

I had no home, no car, and no office.  I didn’t even have a key for my backpack because that had a combination lock.  I was a free and easy irresponsible homeless person

How things have changed.  A quick count of my key ring now reveals 12 keys. (I feel a bit like a prison warden).

We are both very responsible and grownup now.  We are married; we have a car, a house and a mortgage.  We don’t really have proper jobs yet, but it looks like that’s only a matter or time.

Ach jo (Czech for ce la vie) – Not that all of this a bad thing mind :)

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How to buy a house in the Czech Republic in Twenty four (Easy?) Steps

How to buy a house in the Czech Republic in Twenty four (Easy?) Steps
(based on our experience)

Step 1. Find a house you like

Step 2. Talk to the real estate agent.

Step 3.  He will say that the price is “x” crowns. Many people apparently either accept this asking price – or not. However even though some might consider it presumptuous or rude – you are allowed to negotiate.

Step 4.  The negotiations won’t be the same as in New Zealand. First of all you will negotiate the price before you make an offer. Secondly the normal “back and forth” doesn’t seem to exist.

We called the real estate agent, apologised, and said that we could only pay 75% of the asking price. He was quite angry with us for wasting his time.

Step 5.  Wait

Step 6.  Two days later the agent calls back and says “Yes, OK”. He does not attempt to negotiate. He just accepts the offer.

Step 7.  You go to the agents’ and sign the first of the billion pieces of paper that you are going to have to sign.

This one is a called a “contract reserving the property”. It specifies the price, but not much else. At this point you pay a (non refundable) deposit. You do this before you have organised your mortgage and before you have checked the building for structural defects etc.

If something went wrong (for example you couldn’t get a mortgage, or discovered that the building was on the verge of collapse), then you wouldn’t get your money back. Instead you would get to go “phew – that was a lucky escape”. The real estate agent would keep the deposit as bonus commission and start again.

Conditional contracts are apparently possible, but very very unusual.

The house is now “sold” and should disappear from the agents’ web pages.

Step 8.  Apply for a mortgage. We used a mortgage broker. This was a good idea as he was really really helpful.

Step 9.  Take a day off work to visit all the different government offices you need to visit in order to get bits of paper saying that your taxes are not in arrears, you are not a bad debtor, you have up to date health insurance etc.

Step 10.  Once you are feeling petty good about the mortgage, you can move to the next step. Which is were you sign a “contract about future contract”. Your mortgage won’t actually be finally approved yet, but you’ll need to sign this contract first – before your mortgage is approved. This is a bit of a catch 22, as this contract includes a deadline for settlement, and big financial penalties if you fail to settle. You’d be in big trouble here if your mortgage was declined.

We needed to sign nine copies of this contract.

Step 11.  After your mortgage is approved, go and sign the mortgage. Really friendly and helpful service, but give your signature arm a workout first.

Step 12.  Sign a contract with an attorney, who will be holding all the money until the title is registered at the land registry.

Step 13.  Pay the rest of your cash contribution (to the attorney)

Step 14.  Sign the actual purchase contract. 

Step 15.  Now you can get house insurance (you need it for the mortgage)

Step 16.   You (and – I don’t understand why – the vendor) sign a lot of notarised documents giving the bank security over the property.

Step 17.  Take all the signed documents to the Land Registry, and get a receipt from them

Step 18.  Take all the documents to the bank, who – if they are satisfied that everything is in order – will pay their part of the money to the attorney

Step 19.  After that – you take possession of the house (sometime in the next two weeks)

Step 20.  Move, relax, enjoy a bottle of wine, and be happy

Step 21.  Meet with the vendor. Do meter readings for the power, gas, water and phone and then take another day off work to visit all these organisations to transfer the utilities into your name.

Step 22.  Sign some more notarised documents for the bank.  Pay a big bank fee

Step 23.  Wait

Step 24.   Hopefully within three months the land registry will have registered the transfer and the mortgage.  (If not you will pay a 5,000 Kc penalty).  Once they do, the attorney will release the money to the vendor, and

Finally The property is yours!

I think this explains why the Torrens system of land registration (as we have in NZ – and also I believe in Canada) is a really really good idea. 

In NZ you wouldn’t need to visit any government offices or utility companies, and you’d only sign three prices of paper

•The agreement for sale and purchase
•The mortgage application,
•The mortgage itself

The whole process would take three weeks, rather than the three months (as above).

I’d be quite happy to volunteer to help the Czech State improve their system.  It would be really really good for property prices and for the economy generally.  It would simplify things for everyone, and unless I’m greatly mistaken, actually save the government money.

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Something happens (at last) # 1 – We are no longer homeless

House frontOne of the things we had been hesitant to tell everyone is that have bought a new home.

We were hesitant because the Czech Real Estate system is – at least compared to what I’m used to from New Zealand – very very very complicated.Despite the fact that we’ve had what in NZ would have been an unconditional contract since the middle of August, we have only just now reached the point where we really are confident that everything will go ahead as planned.

We will probably take possession next weekend and move in the week after.

Anyway – more about the mountain of paperwork and bureaucracy that is the Czech real estate system another day. We have a home and we’re very excited!

We mentioned a few months ago that we were looking for a house in Slany and that we had a very precise idea of what we wanted. We also mentioned that there isn’t a lot of depth in the market and that it looked like we might have to be patient.

We were not looking for a small 1904 apartment building with a big cellar, two downstairs flats we can rent out, a small garden, and a double garage. But we had decided to look at whatever came on the market – so that’s exactly what we went to look at one day.

We had no intention of buying – we were just trying to make sure we understood the market and prices. Of course, once we looked, we liked (a lot!). And we also realised that – even though this was much more than we were originally thinking about – we just might possibly be able to afford it.

You can see some more photos here.

As you can perhaps see, the building itself is (at least in our opinion) very elegant and beautiful. The previous owners also spent quite a lot of money improving it, so it is modern and comfortable inside.

The only small problem is that we don’t entirely share the previous owners’ tastes, so in the fullness of time the purple paint, built in Formica wardrobes, red bath and enamel door handles will have to go. Also, we really can’t understand why you would really need a shower in the dining room? But perhaps we’ll grow to like it. It could be a big positive with Thai (and other very hot and spicy) food. In the meantime we’ll survive.

Slany is a really nice town. With a population of only 15,000 it’s still an easy (30 mins) commute to Prague.

We’re really looking forward to living there.

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