Shrnutí: When purchasing real estate, pay particular attention to the legal status of the apartment or house, any restrictions on ownership rights, the seller’s circumstances, and the terms of the reservation and purchase agreements. In 2026, it’s still true that one hasty signature can result in the loss of the reservation fee or complications during the transfer of ownership. Therefore, before signing, thoroughly review the property, the seller, and the financing for the entire purchase.
Quick Overview: What to Watch Out for When Buying Real Estate
Are you buying an apartment or a house and don’t want to discover a problem only after signing? Have our attorneys review your reservation or purchase agreement before you commit to anything.
So don’t rush into signing any contracts that bind you to anything; instead, have the documents reviewed or prepared by an expert. It all starts with the reservation agreement, which many people underestimate, even though it’s one of the most critical documents in the entire transaction.
In our practice, we’ve encountered many clients who’ve told us the same story over and over again. They came to view an apartment that they really liked. They let their emotions get the better of them and immediately said, “I want this one.” But that’s not exactly the best position from which to start negotiations.
Even if buying an apartment is a matter close to your heart, for a real estate agent, it’s a business transaction like any other. Typically, they broker the sale or rental of dozens of properties, and the commission on each is usually between three and five percent of the sale price. In the case of a rental, it’s usually one month’s rent.
If the agent realizes you’re interested in the apartment, they’ll usually immediately follow up by saying there’s huge demand for it, that there are three other serious prospects after it, or that if you really want the apartment, you need to sign a reservation agreement as quickly as possible. And just like that, they’ve got you on the hook—and it’s not easy to escape.
Tip: Are you buying a property and want to make sure you get paid for it? Then, first and foremost, you need to include a mechanism for the payment of the purchase price in the contract. An escrow account will ensure this. Read our article to find out exactly how it works.
“It’s a standard contract; everyone signs one like this,” you’ll hear from real estate agents. In practice, this agreement goes by various names—reservation agreement, blocking agreement, or even a contract for the payment of a blocking deposit. Signing a reservation agreement right after viewing the property is one of the biggest mistakes a buyer can make. By signing a reservation agreement, you’re not only reserving the apartment, but—more importantly—you’re committing to purchasing the property. While you can usually change your mind later, it won’t come without a cost. Reservation agreements include substantial penalties for such cases.
Signing a reservation agreement on the spot is a common—and, from a human perspective, understandable—mistake, because in practice, the property is often purchased by whoever signs the agreement first. But don’t rush into anything and don’t sign anything on the spot, because you don’t know if you’ll change your mind about the purchase after a sleepless night and a discussion with your partner. During a subsequent viewing, you may also discover defects that will deter you from buying. You also can’t be sure whether the bank will grant you a mortgage or whether you’ll ultimately agree on the terms of the sale.
The reservation agreement is just one part of the entire transaction. Among the most common risks when buying real estate are also a problematic legal status of the property, the seller’s debts or insolvency, liens and easements, technical defects, or improperly arranged payment of the purchase price.
Before purchasing, be sure to check the following in particular:
The sooner you assess these risks, the more time you’ll have to resolve any potential issues or back out of the purchase in time.
Tip: These days, real estate prices are so high that most people can’t afford to buy a home using only their own savings. As a result, more and more people are turning to mortgages to finance their homes. But how does the entire process of applying for a mortgage actually work, and do you even have a chance of getting one? You’ll find the answers to these questions in our next article.
We provide comprehensive legal services related to the purchase or sale of real estate, including reservation agreements and escrow services. We can also assist with land registry and tax matters. We can handle everything within 48 hours, even when purchasing from a developer.
Petr, a freelance graphic designer, was planning to buy an apartment. He couldn’t afford the full purchase price, so he had to finance part of the property with a mortgage. The reservation agreement the developer gave him to sign included a contractual penalty of 60,000 crowns if he ultimately decided against the purchase.
This is a classic scenario. Even though Petr was determined to buy the apartment, the deal ultimately fell through. Due to his irregular income, the bank refused to grant him a mortgage for the amount he needed.
Fortunately, his lawyers had included a set of “conditions for termination” in the reservation agreement. One of these conditions allowed him to withdraw from the agreement if the bank did not approve his mortgage.
Thanks to this, Petr didn’t have to pay a single crown. That’s a decent outcome compared to what would have happened if he had signed the reservation agreement right after the viewing and ended up paying 60,000 for a single signature.
The reservation agreement, even though most people don’t realize it, is one of the most important legal documents and should be treated as such. It differs from a preliminary agreement in that it is a so-called “unnamed” contract—meaning its content is not prescribed by law.
Do you have a reservation agreement in front of you and are unsure about the penalties, financing terms, or your right to withdraw? An attorney can review the agreement before you sign it and point out any provisions that pose an unnecessary risk to you.
Tip: In addition to signing the reservation agreement prematurely, there are a number of things you need to check. One of them is whether the seller is insolvent. You can use public registries for this purpose. In our article on how to verify that the seller is not in insolvency, we’ll advise you on what information you can find in these records and how to proceed if the other party is indeed in insolvency.
When buying real estate, it’s not a good idea to base your decision solely on your impression from a viewing. Before signing a reservation or purchase agreement, verify the legal and technical condition of the property, the owner, and any encumbrances in the land registry, as well as the seller’s financial situation and the financing arrangements. Pay particular attention to the terms of the reservation, penalties, the option to withdraw if the mortgage is not approved, and the secure payment of the purchase price. Risks associated with buying real estate often arise even before the actual purchase agreement is signed, and it is precisely at this stage that they can be most easily identified and addressed in the contract.
We prepared this article for the Lidové noviny series “Law & Housing.” Be sure to check out other articles in the series:
First and foremost, verify the owner, the legal status of the property, the land registry entries, the property’s physical condition, and the terms of both the reservation agreement and the purchase agreement. If you’re buying with a mortgage, also consider the possibility that the bank might not approve the financing.
These include, for example, liens and easements, the seller’s insolvency or debt enforcement proceedings, technical defects, unfavorable terms in the reservation agreement, or improperly arranged payment of the purchase price.
It’s usually safer to read through the contract carefully and review it first. Pay special attention to the reservation fee, penalties, and the conditions under which you can cancel the contract.
It depends on the specific terms of the contract. It is therefore advisable to specify in the contract in advance what will happen to the reservation and the reservation fee if you are unable to secure the necessary financing.
Verify the owner and any restrictions on ownership rights, such as liens, easements, or prohibitions on alienation or encumbrance.
We provide comprehensive legal services related to the purchase or sale of real estate, including reservation agreements and escrow services. We can also assist with land registry and tax matters. We can handle everything within 48 hours, even when purchasing from a developer.
Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 15 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.
Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 15 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.
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