Estimating the price of a property is something everyone encounters at least once in their lifetime. However, how do we estimate an apartment’s value in the Czech Republic? Who performs the estimate, and why might the estimated price not always align with the market value?
You’ll find yourself in need of an apartment appraisal in various situations in the Czech Republic—whether you’re applying for a mortgage, looking to sell your property, or dealing with splitting property during divorce or inheritance proceedings. But this doesn’t mean that you need the same type of appraisal for all occasions, or that the same person can provide it. On top of this, the estimated value can vary depending on the circumstances. So, what causes this discrepancy?
Appraisals for banks or courts
If you’re planning to apply for a mortgage in the Czech Republic, be prepared for the bank to require an appraisal of the apartment you intend to use as collateral. This appraisal is typically carried out by an appraiser who collaborates with the bank—a list of approved appraisers will be provided by the financial institution, and you may be assigned one of their partners. Sometimes, the appraised value by the bank may be slightly lower compared to the market price. This is a precautionary measure by the bank in case you are unable to repay the loan and they need to sell your apartment. Unfortunately, in such a scenario, you’ll have to cover a larger portion of the purchase price from your own resources than initially planned.
Another institution that may require a property appraisal in the Czech Republic is the court, often in cases of divorce where property settlement is involved, including jointly owned apartments. In these situations, only a court-appointed expert can perform the appraisal, selected either by the Ministry of Finance of the Czech Republic or the court itself. In this case as well, the appraised value may be lower than the market value, as the expert uses different criteria compared to a real estate agency. Court-ordered appraisals also come into play in foreclosure auctions or insolvency cases.
Apartment appraisal for a sale
A much more pleasant scenario arises when you need to estimate the price of your apartment because you’ve decided to sell it. In these cases, it’s best to turn to an experienced real estate broker or real estate agency that is well-versed in the Czech Republic’s property market, especially in the area where your apartment is located.
Some people believe they can estimate their apartment’s value on their own without the need for professional assistance. While you can certainly find various guides and tools for estimating apartment prices online, such as price calculators, you’ll never be able to account for all the factors that can influence the market value of an apartment. Attempting to do it yourself might cost you thousands in potential losses. Investing in a professional appraisal by an experienced broker will more than pay off in the end. Additionally, here at Kotula Real Estate Agency, we offer apartment price appraisals entirely free of charge if you choose to use our services
What’s taken into account in an apartment appraisal?
What exactly goes into the appraisal of an apartment in the Czech Republic, and what determines its price? Besides the apartment’s size, floor, age, and condition, its location, orientation (sunny apartments tend to be slightly more expensive than those with minimal sunlight), and layout also play a crucial role. Rooms that can’t fit a double bed can be considered a disadvantage, even if the apartment has a spacious living area.
The apartment building itself, where the apartment is situated, also has an impact on the price. How old is the building? Has it undergone renovations? Does it have an elevator? Is the building part of a housing cooperative, or are the units individually owned? These and other questions must be taken into account by the real estate agency when determining the appraisal.
Another important aspect is the local amenities. For instance, an apartment in a neighborhood with a lot of greenery yet just a few minutes from the city center will have a higher value. The same applies to how far the future property owner will have to travel for shopping, public transportation, restaurants, medical facilities, or even how far they’ll need to take their children to school or daycare, and so on. In essence, a layperson who is not familiar with the Czech real estate market will have no chance of considering all these aspects like a professional with an extensive overview. That’s why it’s worthwhile to entrust the appraisal and sale of your apartment to a real estate agency to ensure you get the maximum price for your property. If you’re selling or buying an apartment in Prague, it’s also beneficial to be aware of the specifics of the local market, as discussed in our article on Property Appraisal in Prague.
Selling an apartment? We’ll not only assist you with the sale from start to finish but also provide you with a free apartment appraisal. Contact us!
Photo: Group4 Studio, Getty Images via Canva.com
