Purchase agreement (kupní smlouva)

A flat for CZK 5,000,000: the buyer has CZK 1,000,000 of own funds and CZK 4,000,000 from a mortgage at 5.00 % over 25 years (payment CZK 23,384). The purchase agreement must state explicitly that part of the price will be paid from a loan, that payment goes through attorney escrow (advokátní úschova), and in what order the applications to register ownership and the bank's lien are filed.

Before approving the loan, the bank wants to see the draft purchase agreement, and it often insists on its own wording for escrow and drawdown. The seller's signature must be officially certified (úředně ověřený), otherwise the land registry will not allow the registration. Most trouble comes from a contract that sets a fixed deadline for paying the balance and is signed before the mortgage is approved. Any delay at the bank then means a contractual penalty, or the seller withdraws.

Don't confuse it with a reservation agreement (rezervační smlouva), which only holds the property for a reservation fee and transfers nothing. An agreement on a future purchase agreement (smlouva o smlouvě budoucí kupní) commits the parties to sign the purchase agreement later, typically for a new build before occupancy approval (kolaudace). Ownership can be registered only on the strength of the purchase agreement itself.