Buy before selling your Czech home: finance the gap

You found the larger Czech home, but the equity is still locked in the flat where you live. The seller wants a reservation now, your old home is not sold, and perhaps it still has a mortgage. This is not one transaction with an awkward date. It is two purchase-price flows, up to three lenders, two cadastral processes and one household that must survive if the old sale is late or cheaper than expected.

Start with net sale equity, not the advertisement price

• Conservative sale proceeds: the price you could accept within the required time—not the optimistic listing target.
• Old-lender payoff: dated principal, interest and any applicable early-repayment compensation.
• Selling deductions: agency, legal, escrow, cadastral, certificate, moving and preparation costs.
• Possible tax: calculate the actual Czech exemption and taxable-base branch rather than reserving zero by assumption.
• Retained reserve: cash for delay, repairs, two homes and moving that must not become purchase equity.
• Usable net equity: the residual amount that can genuinely reach the new purchase on the required date.

Four routes solve four different risks

1. Sell first, then buy

This gives the strongest evidence of cash and removes the open-ended sale-price risk. It may require temporary rent, family accommodation, storage or an agreed delayed handover. Compare that finite inconvenience with the interest and downside of carrying two homes.

A post-sale stay is not just “we keep the keys for two months”. The buyer becomes owner and may have lender, insurance and occupancy conditions. Use a written lease or other correctly characterised possession agreement covering payment, services, deposit, liability, access, exact handover and the consequence of failing to leave.

2. Link the sale and purchase with contractual conditions

The new seller may agree to wait for your old sale, but Czech law does not automatically make a reservation refundable because your buyer, their mortgage or your own sale fails. The condition must be written around the real dependency.

• Identify the old property and the event that counts as a successful sale: signed reservation, signed purchase contract, ownership filing or cleared net proceeds.
• State the minimum net amount—not merely a minimum headline price.
• Set an outside date, evidence, notice recipient and method, extension mechanics and refund deadline.
• Cover a low valuation, mortgage rejection, buyer withdrawal, cadastral rejection and delayed escrow release where they matter.
• Make the purchase, escrow and mortgage dates consistent with the condition; one helpful sentence in a reservation cannot repair conflicting final documents.

Use the Czech reservation-agreement guide to identify the parties, payment recipient, financing condition and exit evidence before paying.

3. Use purpose-built bridge finance

A housing bridge can finance equity needed now and be repaid from the later sale. Do not confuse it with every product called a “bridging loan”, including a building-savings bridge. Product structure, security, regular payment and final balloon are lender-specific.

Česká spořitelna’s current product information provides one concrete example: its bridge is supplementary to its mortgage, requires real-estate security, has a maximum two-year principal-repayment period, ordinarily charges monthly interest and leaves principal for a lump-sum repayment, preferably from the sale. This illustrates the balloon risk; it is not a market-wide promise or an offer from another bank.

• Amount available after the lender’s valuations and liens, not after your asking price.
• Interest-only or amortising payment, interest basis, APR and every one-off cost.
• Final maturity and what happens if the property is unsold at that date.
• Whether repayment from sale is free under that product and what notice is required.
• Which property or properties are pledged, who owns them and which lender has which lien order.
• Whether you can carry the old mortgage, new mortgage and bridge payment during delay.

4. Buy with a new mortgage and change or add collateral

An existing lender may consider moving its security from the old home to the new one. A new lender may consider both properties as security. Neither route makes the equity liquid by itself, and neither is a right. The bank must accept the property, valuation, lien order, documents and release sequence.

Current Air Bank guidance, for example, says its collateral-change process is usually at least two months and requires assessment, current title evidence and often a new valuation; insufficient remaining security can require partial repayment. Treat that timeline and fee schedule as evidence about one lender, not a universal deadline.

A future sale can matter to underwriting—but only in the right structure

Section 86 of the Consumer Credit Act requires a lender to assess creditworthiness. ČNB’s regulatory position specifically recognises that assets can be considered where the credit agreement provides for partial or full repayment from their sale. But expenses and liabilities still matter, especially where the sale will repay only part of the credit. Owning a valuable flat therefore does not automatically prove that you can service two ordinary mortgages.

Ask each lender which debts it will count before the sale, what sale evidence it requires, how it treats expected net proceeds and whether the proposed credit is expressly structured for repayment from the asset. A calculator and an agent’s price estimate are not credit approval.

Draw the money and lien sequence

Money held in the old-sale escrow is not necessarily available when a new reservation payment or purchase-price instalment falls due. Release depends on the old contract’s ownership and lien conditions. Align both escrow agreements with both lenders instead of writing “paid from sale proceeds” without a date or trigger.

The sale-with-mortgage payment map covers the old lender, buyer lender and lien-release documents. The purchase-contract and escrow guide covers the new side.

Stress the two dates and two prices

• Base case: old home sells at the conservative price and net proceeds arrive on the planned date.
• Price case: proceeds are 10% lower; recalculate payoff coverage, new equity and retained reserve.
• Delay case: the old sale closes six months late; add every duplicated housing and credit cost.
• Failure case: the first buyer withdraws after you are bound to the new purchase.
• Property case: either bank valuation is below the contractual price.
• Life case: income falls, a child arrives, a renovation overruns or one borrower cannot continue.

If only the base case works, the chain is not financed. Use the household mortgage stress test on the overlap period, not only on the expected long-term mortgage.

Do not solve timing by underpricing blindly

A fast sale price can be rational when it saves more bridge interest, duplicated costs and contractual risk than the discount. Make that calculation explicitly. Compare three old-home prices with estimated time-to-sale, net proceeds and the monthly cost of delay. Then follow the evidence-based sale-pricing guide.

Stop before reserving if any of these remain unknown

• No written lender approval for bridge finance, additional security or collateral substitution.
• The new deposit is non-refundable before the old-sale or finance condition is satisfied.
• Expected net equity uses the asking price but omits the old mortgage, costs, tax or reserve.
• The old buyer’s bank and your new bank require incompatible lien or payment timing.
• The household cannot carry six delayed months without consumer borrowing.
• Handover dates leave you without possession of either home or make you promise possession to two parties.
• The bridge principal has no credible repayment route if the old property remains unsold.

A safer order of work

• 1. Price the old exit: title, mortgage payoff, conservative range, selling costs, tax branch and required handover.
• 2. Obtain bank routes: ordinary new mortgage, bridge, additional collateral, security substitution and sale-first option.
• 3. Choose one primary and one fallback route: record approval conditions and outside dates.
• 4. Search within the financed new-home ceiling: include repairs and double-running costs.
• 5. Draft both transactions together: reservation, purchase, escrow, liens, release and handover.
• 6. Keep the bad case alive: do not release the reserve or abandon temporary-housing options until both titles and money flows complete.