Usual price (market value)

The usual price (obvyklá cena) is the default valuation method under Section 2 of Act No. 151/1997 Coll. on Property Valuation. It is the price that would be achieved when selling the same or similar property in ordinary trading in the Czech Republic on the valuation date. It disregards extraordinary market circumstances (such as a seller or buyer in distress), personal relationships between the parties and special preference. The law determines it by comparing agreed prices.

How it is determined

The procedure is set out in valuation decree No. 441/2013 Coll. The valuer selects at least three similar properties with documented agreed prices, compares their parameters (location, size, condition, layout), adjusts the prices for the differences with reasons, and derives the result from the adjusted set. The data must be checkable and the procedure clear from the valuation.

• usual price: comparison of prices actually agreed
• market value (tržní hodnota): an estimate of what the property should change hands for between a willing buyer and a willing seller; used in justified cases where the usual price cannot be determined
• administrative price (cena zjištěná): a calculation under the valuation decree, determined alongside the usual price when valuing real estate

Where you meet it

The usual price is typically determined in an expert report for a court or authority. Under the Consumer Credit Act, a mortgage bank's valuation of the collateral must be based on the usual price or market value. When selling through an estate agent, brokerage normally includes a proposed asking price, often presented at the listing appointment; that proposal, however, is not a usual price in the legal sense.

Points to watch

The usual price is neither the asking price in an advert nor the price at which a particular property finally sells - the parties agree the purchase price freely. The law derives it from agreed prices, so actual transaction prices, such as recorded sale prices from the land register, are better for comparison than advertised prices. Even a recorded price need not equal the usual price: a contract may cover several plots or furnishings, or be made between relatives. For rents, the rent price map plays a similar role.