What is market price - current price - formerly known as common price?

Co je tržní cena?

In many articles or blogs of real estate companies, these terms are interchanged or explained in a different way.

In a good real estate company, the sales or purchase price in a contract should be close or slightly higher than the market or the current price. If the difference between the agreed purchase price and the market price is too high, then either the buyer or the seller is being ripped off. For some unreliable real estate agencies or real estate brokers, it is much easier to set the selling price well below the market price just to execute the sale within a few days so that the real estate agency can charge the commission immediately.

This is also the main reason for the emergence of various advertising portals claiming that it is much more profitable to sell real estate without commission to a real estate broker and that the seller will save on commission and profitably sell his/her property. Although they pretend that they can help you carry out the market appraisal, there is something wrong with that and you should be careful if they want to perform the appraisals online.

Everything takes us back to the question - what is the market price of real estate? I have also seen slogans on many websites - "We only sell at market price" but you won't find out how they determine that price. Usually they brush you off saying that this is their long-term “know-how” and that they have programs to do it. Very often, real estate agencies use terms such as estimated price or pricing. I think this is an utterly vague determination of a real estate price.

Many real estate brokers explain the concept of real estate market price in their own way and do not adhere to the general methodology of appraisal determination, because they do not know them and do not know how to work with them. Their motivation is maximum and fast commission, NOT the highest possible purchase price. Unfortunately, this problem will not be solved either by a new law on real estate intermediation or by any insurance of real estate agencies or brokers. Yes, it is possible of course, but the maximum range the real estate agent could use to offer the client's real estate in comparison with the current price would have to be defined in the future. The current price would be set by a broker performing property appraisals as a regulated trade. This could prevent the barefaced rip offs of some real estate brokers, and this profession would surely get to a different level of prestige. But I agree that to have some law is better than to have none, as it has been since 1990.

There is no difference between the market, the current or the common price. There is no legal regulation for determining the market price, but there are generally established appraisal methods used for this purpose.

However, there is a definition of the term current price in Act No. 151/1997 Coll. - on the valuation of property referred to in § 2 (1):

"Property and services shall be appraised using the current price, unless this Act provides otherwise. For the purposes of this Act, the current price is the price that would be achieved by selling the same or similar property or by providing a similar service under the usual commercial relations in the Czech Republic by the appraisal date. In doing so, all the circumstances affecting the price shall be considered, but the effects of extraordinary market circumstances, personal circumstances of the seller or the buyer, or the effects of special favour shall not be reflected in the price." The terms of extraordinary market circumstances, personal circumstances, and the special favour are explained as well.

We can only agree with this definition of current price.