Bangkok Buying, renting or leasing guide for foreign homebuyers in Thailand

We receive our commissions off the seller or landlord and no added charges are imposed on you the buyer or renter. What we make sure is you get a professional service with no hidden costs, plus we help you with your lease agreements and oversee everything you need. You may have a Thai friend who says they can get you a better deal. Unbeknown to you they may be getting a commission or even 2 plus a scheme --can you read Thai??. Using our services we guarantee that the lease and selling documents are in order as we have our own Barrister at Law. Please do not ask us for mortgages as we cannot help unless you are married to a Thai or own a Thai Company.

BUYING YOUR HOUSE:

Thailand has so many different types of properties for sale that whatever your dream home is, you can realize it here if you do the paperwork right. Prices are a lot cheaper than Western houses but some aspects need close scrutiny especially wiring, water & most importantly the deed title. Now that you want to buy a house what should you look for?

The first thing you need to do is obtain the services of a reputable real estate agent or lawyer on your behalf. The Thailand Realty Industry is not regulated so watch out for agents forcing you to sign contracts, & check the title deed to make sure the property is what it says. Do yourself a big favour and obtain a House Inspection report which in effect pulls the holes out of the property! Some buyers have bought the house only to find the land is on a different title & visa versa or the cracks have been disguised. Once you buy then its your problem. Many Estates will try to sell a house in a developing block which has but one title with say 10-20 houses on it. They probably have 2 mortgages and want to unload the houses before they pay off the loan & secure the titles for their owners. Or will they???--- we had a case in May 2002 & saved the foreign buyer 2.8m baht that he would have lost if he did not use our service. The same goes with the boundaries of the property which need to be the same as the title deed. In Thailand there's no survey pegs as such but they do use concrete pegs & it is an important point. Sometimes vendors deliberately understate property area or move so called pegs. If the building is under construction or the land is having a subdivision look carefully at the provisions for issuing a title, and easement rights for say roadways. if you are a foreigner you can only lease for 30 years or form a company to hold the house.

As you say, the 10 million Baht investment is for permanent residence, but you can get a one-year stay for an investment of 3 million. Subject to certain conditions, you can use that 3 million Baht to purchase a condominium. Its detailed on the Thai Embassy web site at: http://www.thaiembdc.org/consular/con_info/restpmit/rest_pm.html#iii.1


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WHAT IT ALL MEANS:

Sor Kor 1 This document means that land occupants are occupying or making use of certain land plots, whose ownership has not been claimed by any entity. The document does not indicate legal possession of the informer so one cannot transfer the ownership of the property to any one else. The Sor Kor 1 is rare now as the government's land ownership legislation has covered most area of the country.

Nor Sor 2 states the government's permission for person or legal entity to make use of land temporarily. Need to utilize at least three-quarters of the land plot within three years after the document issuance. This right is non transferable. At the finish, land occupants can seek the right to demand higher privileged title deed.

Nor Sor 3 is a governmental letter certifying a utilization of certain land plot by certain people and that the plot of land has been surveyed and its official map created.

Nor Sor 3 A is similar to the Nor Sor 3 certification. The only difference is the map survey of the land plot based on an aerial-viewed photograph of the land.

Ownership Title Deed or chanote is the ultimate certification of land ownership. Holders of the title deed have full rights to transfer or sell the properties and to bar other parties from violating their rights over the land protected by the ownership title deed law.

BUILDING YOUR HOUSE:

We have been asked to help foreigners who have paid too much to have their house built. Please note the following----there are 3 types of builders in Thailand:

1/. A builder 2/. A broker 3/. a worker/builder. Those who have been caught out are using (2) which could be a friend who procures a builder for the foreigner then has a separate contract with the builder for his cut which is 1/2 of the asking price. Thus you are giving money away & in fact are being ripped off as inevitably the actual builder will never be able to meet his deadlines. Plans & fees etc should not be more than 50,000 baht yet we have seen charges of 400,000 baht. The fees for 1 sq metre is 1/2 a satang which is not even a baht. If you need a good builder in Chiangmai and architect refer to your architect for the prices. You also need to have a builder who can complete an average house in 3-4 months & check his equipment and formwork supplies, how many workers he/she has & work he/she has carried out. Talk to the referrals & your architect to see if they keep to their word. Remember also Thai holidays workers will stop work on buddhist holidays and funerals etc. Make sure the contract is overseen by a lawyer or ask us as we can give you a quote with times etc if you want us to do. You can fax to us: 00-66 53 894-210 or Tel (00-66)019527812. We have seen single storey houses charged at 6.8m baht when the price should have been 1/2 this. Just remember having a Thai friend doesn't necessarily mean they are a builder---they are only getting a commission --when it comes to progress payments and they ask in advance you could find yourself in a bad situation. Itemize the materials and also how many men they will have on the job and also if building multi-stories, their deadlines and time limits.

Prices per sq metre to build are approx: 7-8,000 baht. But, remember this will vary according to the extras and items like marble and appliances etc.

OFFERS FROM DEVELOPERS
All developers in Thailand can and will offer you discounts and extras just to get your business. If youre not happy with some detail ask to change or add on to. Compare what they might offer you with what you would like. Look for Special home loan packages, Extra loan rate -- nowadays, local banks offer home buyers rates that are even below their minimum lending rates (MLR), Discount on land price, Gift voucher, extra room etc & ground maintenance. Don't listen to them if the sales pitch says theres only one more left --chances are theres many they cannot sell. Also be aware that as of September 2004 NEW homes have dropped in price due to the amount being built and the existing loans out by Banks.

ESCROW SYSTEM When making a down payment on unfinished project, protect your money from fraud by the Escrow account system which will ensure your money will not be paid, unless the developer completes construction of your new home and meets the agreed requirement on specification. If you decide to build use a [ lawyer ]

USING A NOMINEE & MORTGAGE:

Usufruct Interest (Sidhi-kep-kin) - gives you temporary ownership rights to structures on or arising from the land. In practice, a usufruct is limited to a 30 year maximum period; like leases, the agreement can be successively renewed. In contrast to a lease, a usufructury interest can be sold or transferred, although it expires upon the death of the holder of the usufruct and therefore cannot be inherited.

LEASE COSTS & WHAT YOU WILL PAY:

The cost of the lease is approx 1% of the purchase price separate from the house purchase price and this is a one off payment so with filing fee for a 3m baht home look at approx 33,000 baht. Lawyers transfers costs etc and to register at the land office can be anywhere from 20-35,000 baht depending on where the location is etc. BUT REMEMBER BANGKOK CHARGES ARE DEARER THAN SAY CHIANGMAI

Condo mortgages to foreigners

BANGKOK: -- Foreigners will find it easier to buy condominiums in Thailand under a new service offered by Bangkok Bank. The bank's Singapore branch has begun offering offshore financing for foreigners seeking to purchase condominiums in Thailand. Loans of up to 70% of a condominium's value were available to foreigners both in Thailand and other countries who want to buy this type of property.
Applicants can e-mail their details or send them by DHL to the bank's Singapore branch, he said.
The applicant's earning ability determines how much he or she can borrow. For example a person seeking a loan to buy a condominium worth 20 million baht should be earning around 300,000 baht a month, Mr Torphong said.
While foreign nationals are allowed to purchase condominiums in Thailand, financing has often been problematic, with local financial institutions reluctant to offer loans due to uncertainties regarding credit risk.
The Bangkok Bank service is just what Phuket needs, according to Stephen O'Brien, managing director of the real estate agency Knight Frank Phuket
''Well over half of the inquiries we receive ask for lending or mortgagee finance and up until now there wasn't anything available, except a number of private firms offshore offering lines of credit or personal loan financing,'' he said.
''I am sure buyers will feel much more relaxed dealing with such a credible name as the Bangkok Bank, than an Isle of Man-registered company offering unattractive financing terms.''
Bearing in mind that the bank's terms apply to freehold condominium title, Mr O'Brien said he expected the takeup rate would be significant.
Under Thai Law, foreigners can own freehold title up to 49% of a condominium project. Generally speaking, when a condo project is launched, sales are always brisk, because foreigners want to hold their units as freehold. If the unit is in the remaining 51% allocation, foreign buyers can either lease or set up a Thai firm and hold freehold through that company, a rather cumbersome structure.
Mr O'Brien is confident that this is the start of more widely available mortgage financing for foreigners in Thailand.
''I suspect that other Thai banks will shortly start offering similar terms and conditions. All of this of course will result in a competitive environment bettering the consumer, whereby the banks will try to outdo one another with more favourable terms, similar to Australia and the UK.''
He said Thai property market had a good future because investors viewed the rental yields of 5-6% as attractive.
''Singaporeans are interested in Thai property because it is three times cheaper than what is available in their own country,'' he said.
--Bangkok Post

PAYMENT:

A deposit of 30% is usually required to secure a property and total payments should be made within 30-60 days (see your lawyer first) but normally once the transfer has gone through. If signing a purchase agreement then up to 30% down & 70% following transfer. You can obtain longer periods but you will probably be required to pay a higher deposit. Deposits are normally non refundable, except by default of the vendor, so bear in mind that once the deposit is placed you are committed.

This situation also prevails for the vendor. He must refund your deposit and pay a penalty of an equal amount if he defaults on the contract. Deposit in escrow is still rare in Thailand, but it is becoming an increasingly recognized way of proceeding. It generally trades off greater security for the buyer's deposit versus a weakened claim for damages in the event of vendor default.

Beyond the price, payment and closing schedules, it's important that a contract includes clauses to cover who will pay the legal fees, transfer fees and taxes (there is often a business tax and always an income tax assessment made at time of sale) as well as an understanding of the value at which the sale will be declared - this is typically (for tax reasons) at or close to the government minimum assessed value.

A foreigner buying a condo must transfer funds from a bank account out of Thailand in foreign currency and verify the transfer on paper. The transfer of funds must be in the same name as the name that will appear on the final purchase contract ie. the buyer. Funds must be transferred into a Foreign Currency Account in Thailand opened in the Buyer's name. Use Bangkok Bank, Thai Farmers Bank and Siam Commercial Bank and make sure you tell them that the purpose of his or her opening a Foreign Currency Account is to purchase a condo in Thailand. This law is somewhat a catch 22 situation as the Foreign Banks usually will not write such a letter but don't worry. You can remit as much as you like to Thailand via your bank. Transfers out of this Foreign Currency Account in Thailand into a Thai Baht Account or some form of Thai Baht draft or check to the Seller must be made in amounts US$5000 or more in order to qualify for a "Tor Tor 3" Certificate issued by the Buyer's bank to verify that the originating funding came from outside Thailand in a currency other than Thai Baht. On the "Tor Tor 3" Certificate, it should state explicitly that the Thai Baht funds are used "to purchase a condominium" in Thailand. Taxes are payable by the buyer or seller of a condo in Thailand such as the Transfer Fee/Stamp Duty Tax of 0.5% usually payable by the seller upon the date of the actual sale or a Special Business Tax of 3.3% which is usually payable by the seller if the property has been owned for less than 5 years. By the way there is no limit on how much you can remit into a Thai account from overseas and no tax. Tax levied at 15% is on interest earnings only.

REMITTING FUNDS: If sending over funds to purchase a house you must tell the National Bank what you are using this money for with sums exceeding 2,000,000 baht quantities. If you wish to know more than ask us.

OFFERS FROM DEVELOPERS
All developers in Thailand can and will offer you discounts and extras just to get your business. If youre not happy with some detail ask to change or add on to. Compare what they might offer you with what you would like. Look for Special home loan packages, Extra loan rate -- nowadays, local banks offer home buyers rates that are even below their minimum lending rates (MLR), Discount on land price, Gift voucher, extra room etc & ground maintenance. Have everything in writing. If the phone doesn't work and they say it will be installed next week or month don't believe a word same with the water, gas lines if any etc. Do not pay a booking fee as then you are locked in. Never put deposit down until your lawyer has searched the title out.

FORMING A THAI COMPANY Some people will say this is the best idea for a foreigner to hold a house in ones name. However with a Thai company yes you can hold a property within the structure of the company. However be warned that if your books show nil profit after 3 years then you may be asked especially by immigration & the Commercial Reg via the tax dept why?? This may affect your visa and the status of your company after that period so be warned if you are told its easy to do. It is, however its also easy for the Commercial Registration Dept to fine you if you are not in profit mode or even take the property from you??? Wait and see.

MORTGAGES: CAN YOU BORROW MONEY

A foreigner cannot hold any mortgage in Thailand unless he/she has a company WITH FINANCIAL STATEMENTS so must be in business for one year minimum and have yearly audit. Therefore a foreigner must use his wife to apply for the load in which case the house will be in her name. You can borrow around 60-80% from a Thai Bank depending on which one you use. There is a 1% service fee charge and interest is 4-7% depending on the bank & 1-12% for businesses but this rate does change. You must apply yourself. We cannot assist you with any mortgages so please ask your Bank. If you have a Thai wife then OK. It takes approx 1 month to be approved or longer.

MORTAGE MONEY IS NOW AVAILABLE TO FOREIGNERS: If you have overseas assets /equity then we can arrange for you to borrow money to purchase a property in Thailand. This is a new service to all clients wanting to purchase safely in Bangkok Thailand. If wanting more info write to us.

Buildings apart from condominiums do not have any form of title document, but their sale or long lease can be registered at the Ampher (district) land office. Proof of ownership, must be established either from proof of construction or document showing previous sale-purchase (not to be confused with the House Registration document, which is only a register of the house's occupants). When buying a condo or property please remit through the National Bank and have record that you are using the money to purchase the property.

Check your foreign currency exchange rates

BUYING A CONDO:

A foreigner can ONLY own a condo in his / her name OUTRIGHT. You cannot own a house and land in your name unless you invest 40m baht = 1 Rai of land. Bank's do not lend to foreigners; only Thais or Companies and you must lease, or have a Thai Company to own a house in your name. Just a note about buying Condos. ---Find out what the monthly maintenance costs are from the managers. Ask for this in writing. Avoid unfinished projects as they may run out of money or be over mortgaged. If very few condos have been sold in a building with good amenities like landscaped grounds, security Guards and a receptionist and office have the title searched but most of all someone has to pay for all this, plus the electricity for lighting and lifts. The total cost (often inflated) has to be divided up among the condo owners, which can be a lot if only a few units have been sold. Ask for an exact statement of maintenance costs and how they are paid. If the project has different size condos in the same building, large units will pay more towards maintenance costs than small units. If you are a legal resident you can obtain a mortgage but you need to check with your bank and credit. The best idea though is pay cash as you can negotiate but you must remit from abroad. In Bangkok look at around 25,000 -100,000 baht per sq m. A foreigner can only buy max 40% of a condo unit so if that 40% has been taken up and you are the 42% person you may find you are buying a lemon so to speak. If the developer owns a majority of units you may not like his manager but if the owners have majority votes than they can remove him. Here is a check list:

BUYING YOUR CONDO AND WHAT TO LOOK FOR

Use an agent as they know what to do and also their commission comes from the seller and not you so the price you pay has nothing to do with the commission from the agent normally.

Check age of any building and if over 20 years ask questions on future plans for the building are. Buy, buying older buildings can be Ok to see if Management is OK and you can check with existing tenants. check cost to pay for the maintenance contract each year? & if management been looking after it since the start.
Has the condo management an annual insurance premium and town planning in the area
Is there a booking fee and is it refundable?
When must you pay full price after the deposit & read conditions? Use a lawyer if not sure
Has the condo management a Sinking Fund? This is often a one time payment made upon transferring ownership and it ensures that the condo will be well maintained.
can be based on sq metre paid lump sum or monthly. Some condos require a sinking fund payment each year, and others require it 'on demand'. Make sure you know in advance what their policy is and cost.
Who pays the transfer fees? Nomally the owner pays or share the costs 50/50. Calculate fees before you sign up to buy. Bangkok and Pattaya, the transfer fee is 3.3% of the purchase price. However, this may change.
You must ALL purchasing funds from overseas. The minimum amount set by the Thai government is $US10,000 and over 2m baht register with the National Thailand bank.
Leasehold means just that. Freehold allows full ownership rights.
Check security, lifts, maintenance and if ask when the building will next be painted? Check the parking and if you have a park reserved & also the roads in and out for flooding etc.
Check other tenants, phone lines if ADSL or PABX or direct lines & if you can obtain one. No university students?
Check Rubbish collection, safety standards like extinguishers and dry/wet fire risers.
If you want to rent use an agent who may charge 20% or upwards. The big guys charge up to 40%. Have a written contract, responsibilities etc. If agent advertises for you you must pay the costs. We can help you here
If in doubt use a [ lawyer ]

The Condominium Act has been amended. Now 49% of units in all condominiums and 100% of units in condominiums in a total development area under 5 rai located in Bangkok, all municipal districts and such other areas as shall hereafter be announced by the Minister of the Interior (which is expected to include rural Phuket) can be foreign owned. Funds used to buy a condominium & remitted from abroad are recorded by a Thai Bank on a Tor Tor Sam. Purchases of condominiums by foreigners come under the Condominium Act B.E. 2535 (1992). The owner of each condominium is issued with a certificate of unit ownership. The certificate also has a statement with percentage rights over the common areas of the building each owner has.

COMMISSION PAYMENTS:

Are normally levied on the seller rated at between 3 & up to 6% of the asking price. Some agents are known to charge a commission from both the buyer and seller. Due to the unregulated realty industry you must use discretion when buying off any agent or person. If they say the price of a house does not include their commission, chances are this company is getting a cut both ends. Our company levies a commission solely on the "seller" & makes sure the person buying is getting the best deal for their money. We normally only sell houses that have a chanote (title).

ONSITE INSPECTION REPORT:

If you want to make sure your house is safe and has what it should have & hasn't had recent false renovations, hidden maintenance, then we also conduct a professional onsite inspection house appraisal of the home you want to buy or sell. This inspection is over and above your title search but compliments the title search as we work in with our own lawyer. This 6 -12 page onsite inspection report covers everything from electricity, inside and outside structures, water supply, plumbing, and general condition of your house & land, elevation etc in a check list report. Added to this we give you the buyer, a full written maintenance report plus our suggestions and recommendations all in English photos for your interest and on clear faults with the construction of. We even oversee the recommendations on your behalf. Cost for this Inspection ranges from 8,000 baht for new houses under 2 years old to 12,000 baht for a standard 4-6 bedroom older house, condos 7,000 baht as we look at the entire building ( This does not including away travelling expenses out of the Bangkok area). eg. cost to inspect in Bangkok is 12,000 baht----takes 2 -4 days ----report printout. We do not conduct land area searches as survey pegs are not shown. For this you need a surveyor which we can obtain for you. Other buildings like Commercial properties we can quote you. PLAY IT SAFE-- WHY HAVE A HOUSE THAT WILL NOT LAST!!!!!! As of August 2005 we have managed to assist foreign clients before they buy with the knowledge that the seller will initiate our recommendations & save money for our clients. We highly recommend you obtain a Title search and House Inspection report before you purchase ANY property in Thailand. Cost 12-22,000 baht depending on travel.

INSURANCE:

We use the services of Thai Zurich for all your house insurance. Please just ask us as we are agents for Thai Zurich in Chiangmai and all over Thailand. Need to know more then ask Thongjan 09-6311114. We can advise you on all your insurance needs & whether you go through us or you do yourself there is no difference in the price. However using our services we make sure you are happy before you even have to pay any more------- no hidden agendas as we are safe. [ See more on insurance ]

WHY USE OUR SERVICES:

	We work for you (Both Thai & foreign consultants )
	No hidden charges-everything is up front.
	Guaranteed conveyancy help & Company, work permit & land setup for foreigners
	We will sell your Commercial property, houses, businesses, bars and Guest Houses
	Because you have the benefit of foreign help with our Thai lawyers and expat consultants
	We offer: Full house onsite appraisals.
	We show you max 4-6 houses that may be suitable for you. We charge downpayment of 2000 baht refunded should you buy from us.
	We now conduct outhouse consultation at your Hotel if you require assistance with any Business ideas or housing advice with our foreign consultant. Cost is 1000 baht. Refunded if you buy a house from us.

BUYING A BUSINESS:Thailand differs from every other country and when you decide to buy a service or hospitality business here the first and most foremost thing you do is ascertain who your management structure will be. The location is second to this and if you do not have your management sorted out first then you will find it hard to make headway in Thailand eg. honesty. [ SEE MORE ON BUYING A BUSINESS ]FREIGHT FORWARDER FOR YOUR HOUSEHOLD GOODS & ANIMALS:Thailand can offer many foreigners moving household belongings to and from Thailand. If you need to ask then us. If you have animals and pets like a dog please ask a freight forwarder and Vet in your country. There are certain requirements to meet including Vet Certificate & innoculations so please ask your Thai Embassy and Vet services in your country and also a freight forwarder if you are sending furniture etc to Thailand. Do not get the innoculations before you find out the time factors you have. eg a Vet Cert must only be 7 days old? In Thailand pit bulls are banned dogs. They must have rabbies injection. A good way is sending the dog by excess baggage but it is not cheap. There is no quarantine period as far as we know. We can customs clear all your belongings and shipments. USING A LAWYER:When using the services of a lawyer please be considerate and talk slowly. Although many lawyers speak English it is not there first language and be slow and patient when making your case. There understanding of what you are trying to say maybe is not what they are thinking so when talking use local layman speech not heavy doctrine. Do not stand and demand like one will do in the west. Do not look down at a lawyer who is sitting down while you are standing. You are in Thailand not in the West. Do not shout and make demands or bang your fist on the table because you gave all your money to the "local bargirl" & now are crying!!!. Why? Some Thai lawyers will simply turn there back and close you out. You may even lose the money you gave. Simply speaking if you are rude and act like one does in the west then forget using a lawyer here. Thailand people are very patient and they do not like to be threatened or placed in situations where they do not understand the falang. Remember if you have a litigation case pending here in Thailand it can take many years to process & lots of money and court sittings that just drag on and on but this is Thailand and one must abide by their rules.

New property law stuns foreigners

Bangkok (dpa) - Thailand's booming property sector has been thrown into confusion by a new regulation issued this month that requires all partly foreign-owned companies to prove the source of their funding before purchasing land, industry sources said Tuesday.

The new Interior Ministry regulation that went into effect on May 25 has already started to slow sales of housing estates in Thailand's popular seaside resorts, such as Pattaya, Phuket, Hua Hin and Samui Island, which have been specifically targeting well-to-do foreigners as vacation getaways or retirement homes.
Thailand has strict laws prohibiting foreigners from directly purchasing property themselves although loopholes in the law allow them to own land and their houses through long leases or a "nominee company," providing the company is majority Thai-owned.

It is common practice for such "shell companies" to include Thai nationals who have been paid to act as nominees to facilitate the deal and who have invested nothing in the purchase. The new regulation, signed by Suraart Thoingniramol, deputy permanent secretary of the Interior Ministry, is designed to halt the use of such companies for property purchases in the future.

"If it appears that an alien holds shares or is a director or it is reasonable to believe that a Thai holds shares as a representative of an alien, the officers shall investigate the income of Thais holding shares, delving into the number of years [they have spent] in the current profession and monthly salary," reads a translation of the law. "The provision of necessary evidence is required."

The new regulation is actually an enforcement of Thailand's existing laws, legal experts said. "It's not a radical change. It's a radical implementation," Ronachai said.
The regulation has already started to stall home sales to foreigners, sources said.
"There's a lot of confusion," said Simon Landy, managing director of the Primo Co, a property-development firm. "Some land offices don't know what to do with it, and many have simply stopped transferring land."

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