Market research - determining the price of real estate

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Toto je nutne udelat ješte pred tím než začnete hledat.

Who is ready is not surprised… It is always good to get at least a basic idea of the activities you want to do. If you are dealing with the sale of your property, you will undoubtedly be interested in at what price and in what time horizon the property is for sale. You will no doubt also be interested in whether real estate similar to yours is for sale in your area. The first step in finding out the price at which your property can be sold can be to compare your property with similar ones in the offer on real estate servers, this procedure will suffice to get a basic idea. However, if you approach the sale really responsibly, it will undoubtedly be better to make a decision based on a professionally prepared assessment of the market price of the property.

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Preparing for sale

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What do you expect from the sale? Usually the highest possible sales price and sales realized within the specified time horizon.

How to do it? It will definitely help you when you prepare your property for sale. I do not mean a comprehensive reconstruction or rebuilding, but a number of details that will make your property attractive and, ultimately, help you achieve the best possible result when selling at an acceptable cost.

These details certainly include, for example, interior painting, minor repairs, thorough cleaning before sale. If you are selling a family house with a garden or land, the same goes for the exterior. Removal of weeds and moss from outdoor paving, cleaning the garden and basic landscaping, disposal and removal of unnecessary things that take up space and spoil the impression. You would deal with this the same way when moving, so why not do it in advance?

It often pays off Home staging… A professional will adjust your property and prepare it for photography, or for possible inspections, including possible rental of decorations or furniture. Sometimes relatively little is enough and the resulting effect exceeds expectations.

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Property presentation

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It is said that one good photographer says more than a thousand words. Is it true. Quality photographers will attract attention at first sight, attract a larger number of applicants and thus ultimately may increase the price of real estate.

If I mentioned cleaning in a previous article, I am mentioning it for the second time. Also, if possible, remove all personal belongings (family photos, etc.). Ideally, your property will act "like a hotel room" at the time of the photo shoot. It never hurts extra trifles, such as fresh flowers.

Order a professional photographer. He has high-quality equipment, he knows how to work with it, and he also adjusts the photographs he has taken so that they are really 100%. In addition, the services of a professional are not extra financially demanding nowadays and, as already mentioned, quality photography can have a positive effect on the selling price.

A Real Estate Photography

If you decide to take pictures of the property yourself, always try to take pictures of all the rooms if possible. If photography is not your hobby, it will help if you follow at least these basic rules

  • Take a picture of each room from all sides
  • Take a picture "landscape", ideally a high-quality camera with a wide angle lens
  • Take a picture in daylight
  • Don't take photos "against the light"
  • Pay attention to what you are photographing… you do not want to be seen in your own photo, for example as a reflection in a glass cabinet, you do not want your pet to be seen in the photo, or perhaps your shadow.
  • Also take photos of the property (adjacent park, photo of the house, local attraction)
  • Take time to take photos… If you take 30-40 pictures, you can certainly select at least 10-15 photos of them that will stand.

But quality photographs are far from everything you can do for a quality presentation of a sold property.

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B Floor plan

It always pays to include a floor plan of the property in the presentation. If the atmosphere can breathe from the photos, the floor plan will much better convey information about the property as a whole, including its orientation (north, south, etc.). It is also possible to use it, but for greater clarity and "readability" it is better to process the floor plan in a simplified form, which will show the size of individual rooms, their arrangement, orientation of individual rooms, etc.

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C Video tour

In addition to photographs, visualizations and floor plans, it is also possible to process a video tour. In the form of a short video, you can provide those interested in the experience of visiting the property without actually visiting it. Personally, I believe that specifically this form of presentation is more important for larger / more fragmented and especially more exclusive real estate.

Video tours, especially recently, have been supplemented with shots taken from a drone, which will allow a view of the property from a bird's eye view. The video recording can be supplemented with an audio subtext, whether in the form of music or a spoken word. You can also insert a layout diagram of the property into the video, which shows how the camera (and therefore the visitor) of the property moves.

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D Virtual tour

A virtual tour is similar to a video tour. The photographer takes a thorough photo of the entire property and then connects the photos in a special program in a way that allows the "virtually" property to pass from the comfort of home. The advantage of a virtual tour is the ability to browse the property back and forth as needed, return to individual rooms, etc.

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E Property description

Although there are many "pictorial" possibilities of presentation, quality text still has its place and justification.

It is appropriate to briefly mention in the text the basic characteristics of the property, its description, its age, possible reconstruction, technical equipment, or. info about what is part of the sale (furniture, sometimes electronics). It is worth mentioning, at least briefly, the location in which the property is located, the civic amenities and the benefits of the location. It is definitely appropriate to attach a layout scheme of the property to the advertisement.

What's next?

  • At the apartment:
  • Type of ownership (personal, cooperative, "other")
  • Layout (3 +1, 3 bedrooms, etc.)
  • Accessories (cellar, balcony, etc.)
  • Number of floors in the house, floor in which the apartment is located
  • Orientation of the apartment - world sides
  • Type and method of heating
  • Type of construction (brick, panel, skeleton)
  • Civic amenities
  • Transport accessibility
  • Financing options (loan, cash
  • At the house:
  • Layout, number of floors (underground, above ground)
  • House accessories
  • Orientation of the house - sides of the world
  • Type and method of heating
  • Connection of the house to utilities, existence of a well

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Building Energy Performance Certificate (PENB)

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When selling a house, according to the law, you must present the so-called energy label - Energy Performance Certificate of the building, prepared by a specialist certified by the Ministry of Industry and Trade. The obligation arises both when selling an apartment and when selling a house, villa or the entire apartment building. A bit paradoxically - when selling an apartment, you also present the energy label of the building… It follows from the law that PENB is provided by the building manager (for example SVJ). You, as the seller of the apartment, will receive a copy from SVJ.

The energy performance class must be stated in the advertisement

The energy performance class must be handed over to the buyer no later than on the day of signing the purchase contracts.

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Property inspection

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One of the most important stages of selling a property. If you still live with your family in the property for sale, it is ideal to take other members of the household on a "trip" on the day of the tour. The interested party should feel in the sold property as in his future home and not as a visitor. If you have animals at home, it is ideal to send animals on a trip. I like dogs myself, but those interested may have allergies, for example. Before the tour, it is advisable to clean the property, ventilate it, smell it lightly. It is never out of place to prepare at least a small treat for visitors and of course the basic documentation for the property. If your property appeals to those interested, they will definitely ask. It is ideal to be prepared and have at your disposal:

  • Certificate of ownership
  • PENB, or overview of electricity, water, gas consumption
  • For flats "record sheet" - breakdown of advance payments
  • For houses project documentation
  • List of things that are part of the sale (kitchen appliances, furniture, any other equipment)
  • Basic information about service providers in the property or location (internet)
  • Basic information about civic amenities and transport accessibility.
  • Those interested will certainly welcome details such as "recognized local doctor, neighbor electrician, local favorite restaurant, kindergarten with a good reputation, etc.

It is always better to be at least prepared in this way, not to hide defects, answer all questions truthfully, or substantiate your claims with appropriate documentation. It can be a suitable and useful supplement

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Technical inspection

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"Protocol on technical inspection of real estate" prepared by an independent authority confirming the technical condition of the real estate. The "inspector" according to a predetermined scenario and according to pre-set criteria will completely inspect the entire construction, evaluate its condition, recommend possible measures and prepare a technical report.

In the end, it is better for you as a seller to know possible defects and take their existence into account when setting the offer price, than to additionally "find" defects with the applicant. Of course, it is more than appropriate to include the existence of any known defects in the purchase contract. This way, you can avoid a number of unnecessary complications and disputes.

A few sentences in conclusion. Always give interested parties enough time for a tour. In the first part of the tour, take a walk through the entire property, at the same time you can mention basic information and after those interested to view the property in this way, offer answers to questions or submit the above-mentioned documentation for the property. Personally, after the first round of questions, I always offer those interested a second round of the tour, where I let the candidates walk through the space independently, with the fact that I am far enough to be able to share their impressions, but close enough to answer other questions. You will often know that people like or dislike something… Nevertheless, always ask at the end what their impression is. And if they do not express themselves on the spot, agree on the time horizon in which they will give you the final feedback.

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Negotiating the price and basic conditions of sale

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Interested parties came, did those interested see and subsequently show interest in the purchase? Great, you have successfully completed the first round. But another is waiting for you. Until recently, real estate prices have been rising steadily and buyers have long longed for a discount. It is up to you to evaluate the results of individual inspections, their number, the benefits of possible offers and consider whether a possible adjustment of the price is justified for you, whether you will accept the counter-offer. Try to approach the action rationally and without emotion. Do not take a counter-offer as a sign of disrespect or insult. Very often, negotiations end in some form of compromise that is mutually beneficial.

Of course, it may not even make sense to respond to pressure offers such as "I have only seen your property on the Internet, but now I am offering you a million less for it"

However, use this opportunity to check the candidates during the price negotiations. If they are interested, they should be able and willing to communicate at least the following.

  • How will they possibly pay the purchase price
  • From their own resources, their own savings?
  • Through a mortgage loan? Alternatively, through a combination of several different loans
  • From own resources in combination with a mortgage loan?
  • If a mortgage loan is at stake, have the parties already negotiated with a specific bank?
  • With what result? Are those interested willing to document the outcome of the negotiations?
  • How much time do applicants need to resolve the provision of financing?
  • Are interested parties willing to confirm their interest in writing and make a deposit on the purchase price, if any?

You can also check the interested party through the register of debtors. The sale is not only about the profit from the sale, but also about the time horizon in which the profit will be realized.

It is not just about money, very often the sale of real estate is followed by other steps of sellers, such as buying another real estate. It is therefore very important to know at least the basic timeline of sales. It can be said very simply that if the buyers have their own resources, the sale in the sense of preparing contracts will take you days. The subsequent transfer of ownership then takes 20 + 30 days according to the legal deadlines to the cadastral office.

However, the practice is such that the cadastral office transfers the ownership right realistically within 21-30 days. The whole sale can take about 5-6 weeks.

But if the buyer solves a mortgage loan. The whole transaction will drag on. According to the readiness of buyers in the order of days - weeks - months. In the most common cases, the settlement of a mortgage loan, including the realization of an expert opinion by a bank appraiser, will take approximately 2 to 4 weeks.

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Contracts

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The law always requires a written contract when selling real estate. The law also imposes what the contract must contain. Beyond the previous two sentences, however, it is clearly true that everything else is a matter for agreement of the parties. Ideally, the agreement will be balanced and mutually beneficial for the parties to the contractual relationship.

A Reservation contract

It is mainly used by real estate agencies. Either as a two-party (ie the participants are future buyers and a real estate agency) or as a three-party where the seller is also a participant.

Simply put, it is a written confirmation of interest in buying real estate, the obligation of the real estate agency to provide cooperation and the obligation of the seller to sell.

The contract should clearly include the deadline within which another contract will be signed (SoSB, KS) and it may also include other conditions and requirements of the sale. In this respect, the reservation contract is very close to the future purchase contract and in some cases essentially fulfills its role.

. In most cases, the reservation contract also includes an agreement on making a reservation deposit - a declaration of serious interest in buying real estate.

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B Future purchase agreement

future buyer and seller. Through this contract, the contracting parties confirm in what time horizon and under what conditions they will conclude a purchase contract, or in what wording.

It must contain

  • Designation and identification of the contracting parties
  • Subject of performance
  • Date of performance
  • Possibly. contractual penalties resulting from non-compliance with individual provisions

The contract on the future purchase contract is suitable if at the time of signing it we do not yet know exactly when we will specifically meet all the conditions necessary for concluding the purchase contract.

Always keep in mind that any contract will be as good as the information you provide to the contract creator. Of course, an experienced lawyer knows what the contract must contain and, based on his experience, will recommend a number of things, but even he may not know everything you say and promise to buyers during negotiations. Therefore, always pass on all information in the most complete form possible. Always pay attention to the subsequent control of draft contracts and do not be afraid to discuss any ambiguities with the lawyer in detail.

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C Purchase contract

The requisites of the purchase contract are based on the Civil Code, specifically on Act No. 89/2012 Coll. The purchase contract of the real estate must, of course, indicate the individual parties involved in the process of selling the apartment or family house, ie the buyer and the seller. Other necessary components are a description of the property that is the subject of the purchase, the purchase price and the date of its payment. These parameters must be included in the purchase contract.

However, by signing the purchase contract and paying the purchase price, the ownership of the property does not pass to the new owner. This fact will occur only after the registration of the new owner in the real estate cadastre. It is therefore good to state the date of this act in the purchase contract and to add an agreement on the invalidity of the purchase contract in case of its violation (and possible sanctions for each day of delay of this act in favor of the new owner).

The Civil Code does not describe the exact wording of the purchase contract and it is therefore possible to agree on its final wording. Even so, or perhaps precisely because you have managed the sales process independently up to this stage, I strongly recommend entrusting the preparation of contractual documentation to professionals. Ideal for lawyers who specialize in real estate issues.

Always keep in mind that any contract will only be as good as the information you provide to the contract creator. Of course, an experienced lawyer knows what the contract must contain and, based on his experience, will recommend a number of things, but even he may not know everything you say and promise to buyers during negotiations. Therefore, always pass on all information in the most complete form possible. Always pay attention to the subsequent control of draft contracts and do not be afraid to discuss any ambiguities with the lawyer in detail.

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D Attorney custody

Lawyer custody, notary custody, bank custody

It is ideal to entrust safekeeping to someone who is already involved in the sale. Therefore, if the contracts are prepared by a lawyer, it is appropriate to choose one that also offers attorney custody. If the contract is being prepared by a notary, it is ideal to use his services in this direction as well. In general, however, notarial custody can be and usually is significantly more expensive. In some cases, it is worth considering using a bank deposit with a bank that provides a loan to the buyer. Not every bank offers this service, the prices of bank deposits vary greatly from case to case, bank to bank. In addition, the bank providing the custody will to a large extent follow the conditions of custody that you model yourself.

If you set the conditions inappropriately, you do not treat all eventualities, you can largely blame yourself.

My personal recommendation follows from the structure of this paragraph. The ideal choice is a certified lawyer providing custody and specializing in real estate issues.

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Cadastral Office

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Have you signed a Purchase Agreement, the purchase price is kept in attorney's custody?

The preparation of the Proposal for the deposit of the ownership right and the submission to the cadastre is waiting for you. If the buyer also uses a mortgage loan secured by a lien on the property you are selling to pay the purchase price, there will be even two submissions.

For the first time, as a property owner, you are applying for a lien in favor of a lending bank. (one of the most important conditions for drawing a loan).

For the second time, a proposal for the deposit of ownership rights is sent to the cadastral office. A proposal to change the registration of the ownership right of real estate is submitted either by all participants in the legal act or only by one of them. Attached to the deposit proposal will be a purchase contract with verified signatures of all participants.

After submitting the application for a deposit to the relevant cadastral office, a procedure will be established and the seal will be marked. This means that in the general view, basic information about the ongoing proceedings will appear on the cadastral office's website and in the first phase also a 20-day protection period in which the cadastral office notifies the property owners that its property is undergoing a change. As this is a procedure that you initiated yourself, do not respond to the letter sent by the cadastral office.

After the end of the 20-day protection period, the cadastral office will prepare a proposal, check the content of the contracts and, if everything is in order, allow the deposit. It shall again inform all parties to the proceedings of this fact in writing. I.e. the letter will be received by both the seller and the buyer. If everything is in order and the deposit of the ownership right is made on the basis of the permission of the cadastral office, the ownership right to the real estate arises retroactively, with effect from the day of submitting the proposal for the deposit of the ownership right.

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Handover of real estate

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In normal cases, the transfer of real estate follows the transfer of ownership rights and payment of the purchase price. From this point of view, this is basically the last phase of the sale of real estate. The date of handing over the real estate should be clearly specified in the purchase contract, either on a specific date (1.1. 2020) or by a period derived from the fulfillment of another fact (eg within 14 days after payment of the purchase price to the seller's account).

It is no exception that the transfer of real estate takes place earlier on the basis of an agreement of the contracting parties.

Example:

The property sold is already unoccupied at the time of the sale, contracts are signed, purchase prices are deposited in attorney custody. The property is formally handed over after payment of the purchase price.

The so-called handover protocol should be prepared for the handover and takeover of the real estate, containing:

  • Nationality of handers and buyers, including their contact addresses
  • Real estate specification
  • List of possible equipment
  • Condition of the property including confirmation that the property is handed over in condition and in accordance with the purchase agreement in case anything is inconsistent, it should be recorded in the handover protocol as well. Ideally including the date in which the remedy will be agreed
  • States of media / energy meters (water, electricity, gas, etc.)
  • Number of transmitted keys, including the designation of what they are used for (3xgate, 3x entrance door, etc.)
  • Space for further notes

However, such an agreement gives the maximum possible degree of certainty that the property will be handed over to new owners in perfect condition. Of course, the part of the purchase price retained in this way should correspond to the situation and needs. Ie. If the subject of the sale is an apartment in its original condition before reconstruction without any internal equipment, the amount of the deferred amount to be paid will undoubtedly be significantly lower than in the case when the apartment is sold, including complete equipment worth hundreds of thousands.

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