The residential unit reservation process, conclusion of necessary contracts and purchase financing can be divided into four stages that follow one another in terms of function and time.
The four stages are:
(1) verbal request for reservation
(2) written reservation agreement
(3) preliminary purchase contact
(4) purchase contract
(1) A verbal request for the reservation of a chosen residential unit is the very first step. We understand very well that choosing a flat is not a simple matter and that it requires time to think things over. With our approach, it is possible to consider all the pros and cons of a particular flat, and choose the most suitable apartment house floor and/or orientation of the flat. Following a verbal request, the chosen flat can be reserved for three working days free of any reservation fee.
(2) The second step is the conclusion of a written reservation agreement that provides a longer period than the verbal request.
The reservation agreement blocks the availability of the chosen residential unit to other requests and takes it off the market temporarily. The associated reservation fee is CZK 50,000. It goes towards the purchase price if a preliminary purchase contract is subsequently concluded. The reservation agreement also goes a step further than the verbal request; it is more specific (residential unit, accessories) and its annex specifies the chosen quality standard, rules for the future payment schedule and an outline of the preliminary purchase contract to be concluded in the following step.
(3) The conclusion of a preliminary purchase contract is the step that follows the reservation agreement. The prospective buyer receives a call to conclude the preliminary purchase contract before the reservation agreement expires. Among other things, the preliminary purchase contract defines the actual manner of financing of the purchase and an integral part of it is a detailed payment schedule. Following the conclusion of the preliminary purchase contract, the buyer is asked to provide an advance payment of up to 15 percent of the purchase price. The previously paid reservation fee of CZK 50,000 counts towards the advance payment. The conclusion of the preliminary purchase contract also marks the time when the client requests modifications or customisations of the chosen flat. Client customisation enables buyers to request changes to, for example, finishing materials, bathrooms and layout modifications. The client can also request other adjustments that increase the standard and comfort of living and differentiate the flat from others. The final payment specified in the payment schedule is the payment of the outstanding 85 percent of the purchase price. The final payment is realised after the completion and final approval of the building that precedes the conclusion of the purchase contract. The outstanding amount can be funded with a mortgage. Our comprehensive range of client services includes assistance in arranging and obtaining the necessary mortgage. We cooperate with most banks operating on the market that offer mortgages. That makes obtaining a mortgage easier and quicker for our clients.
(4) A purchase contract represents the culmination of the whole acquisition process for a residential unit. A purchase contract can be concluded only after the building has been completed and has received its final approval. A condition for the conclusion of a purchase contract is the registration of the owner’s statement by the land registry. Once the final approval has been issued and the individual flats are ready to be handed over, buyers are asked to conclude the purchase contract and pay the outstanding amount of the purchase price. In a case where the flat purchase is financed with a mortgage, the signing of the purchase contract is preceded by the submission of the mortgage and security agreements, and the inclusion of information from these agreements in the purchase contract. Prior to signing the purchase agreement, the buyer is also asked to inspect the flat subject to the purchase. A record is made of the inspection. Once the outstanding amount of the purchase price (in the case of no mortgage) has been paid in full, the purchase contract is signed by both contracting parties, the contract is entered in the land registry and the residential unit is handed over to the new owner. Where a mortgage is used, the inspection is followed by a payment by the buyer and the signing of the purchase contract and security agreement before all the relevant documents are submitted to the land registry. Once the mortgage has been used to settle the remaining amount of the purchase price (generally expected within one month after the signing of the purchase contract), the residential unit in question is handed over to the buyer. It also brings about the moment from which further adjustments can be made to the flat, such as the installation of a kitchen unit or built-in wardrobes.