Property Negotiation in the Czech Republic - Four Critical Points
The "must know" factors a Western buyer should be aware of when buying a new home in Prague
Negotiation has rightly been called an art. It is a vital skill in life, although some are naturally better at it than others. One can continue to improve however, and the proof of mastery is in the results achieved.
Let's go through four critical points related to negotiating the purchase of property in the Czech Republic:
1. Have it clear in your mind as to what you're after, and what would be acceptable or non-acceptable in terms of the deal.
Many clients come to us with their hearts set on a specific piece of property. Who can blame them? However, the attitude of obtaining a property at any cost really puts the buyer at a disadvantage.
The best scenario is for a client to pre-decide what they feel the market value is for the property, and what the acceptable terms of payment are.
This information can only be acquired through time and getting to know the local market. Of course, speaking with locals who are authoritative on the subject is a big advantage as well.
2. Think about the possible negotiation factors for the other party.
In the Czech Republic, there is a difference in negotiation depending if the buyer is purchasing with cash as opposed to a mortgage -- in particular with re-sale purchases. This factor alone can be worth up to a seven percent discount, depending on what property sector the intended purchase is in.
Another factor to consider is having your purchase mechanism in place. Many experienced Czech real estate agents have had agreed offers with starry-eyed foreigners, only to have the deal go down the drain, as it can take weeks, or even months to acquire residency or set up an SRO. Having these in place, and informing the agent and seller, shows that you're a serious buyer.
3. Make friends with the person with whom you are bargaining.
On the visit to the property, be certain to show respect to both the seller and the agent. If you can get them to have some sort of emotional involvement with you, it really helps in terms of whether they will later make concessions.
Basic politeness in the Czech Republic includes offering to take off your shoes upon entering a residence; acknowledging the owner/agent and shaking their hands; and asking permission before entering rooms or opening doors in their residence. A little bit of Czech also helps!
4. Be aware of the market conditions and local attitudes toward negotiation.
Of course, when properties of a certain size and price are moving quickly, the owners will be less inclined to offer concessions, knowing they can wait a few days and sell without concessions. A good local contact will help you determine if your target market is such.
Also, Czech people typically expect to get the price they are asking for a property. The idea of negotiating off of the listed property, or that the buyer will want to feel they got a deal, is not obvious to them. This is largely a Western way of buying property, and may make it difficult for them to buy in the Czech market because of the expectation of a discount.
Three final tips on negotiation:
Eddie's First Law of Business:
Never conduct negotiations before 10am or after 4pm. Before 10 you appear too anxious, and after four they think you're desperate.
If you cannot convince them, confuse them.
Say no, then negotiate.
This article first appeared in the November/December 2006 Czech Point 101 Newsletter.
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