Recommended ways of paying for house.

[stapoz]

Hi.

We are going to buy a house. We watched several houses in the price range 2,5 - 3,5M Bath. Important: we will buy a used house from a private seller. We think of the most safe way for paying for the house. So far we considered:

 

1. Go to the land office, change the owner name then transfer the full money to the seller account. 

pro: quick

con:

- High risk of scam or problems with the house documents. 

- Must use all the money. If something goes wrong we will loose all.

 

2. A real estate company offered this:

1. Pay deposit 10% to the company account (don't know how they will put the seller on hold - probably they will give part of the deposit to the seller)

2. The company will apply to a bank for a credit (mortgage loan), preparing all the documents. At this stage we will don't know how big (if any) loan the bank will grant. This stage will take 1-2 months.

3. When the bank grants the loan, we will sign contract with bank and the money will be send to the seller. The same time we will sign house documents at the land office.

4. We will pay the loan every month. When we ready, we can pay all the money to the bank reducing total interest of the loan.

 

pro:

- We risk only 10% of the money. Even if for any reason this money is lost, it will not change our life dramatically. 

- Also we have the bank protection who is involved in the transaction so any scam will affect the bank more than me. 

- Protection of myself if anything goes wrong between me and my wife after buying the house (the credit and the house will be on her name - I can just go away loosing "only" the deposit and instalments paid instead all of the money). 

- We must use relatively little money (10%).

- The company will check the credit availability for us before the deposit is paid. The company claims they will give us 100% sure of the loan amount we can get. But of course I treat this only as a "promise", nothing official or confirmed by any document.

 

con:

- Not sure if we get the loan or if the loan will be sufficient protection (I expect bank will credit 80%-100% of the transaction to make me feel safe). 

- Not very clear for me and long lasting process.

- Quite high risk of deposit lost.

- I treat the deposit as not returnable if, for any reason, transaction will not be finalised.

 

Do you know such a practice of real estate company? Do you know any other/better way of paying?

[ThaiBunny]

You seem to have left out the kickbacks payable to the government employees to record the official transfer of ownership in a timely way

[BritManToo]

Safest way is to get a home loan from the bank to pay for the house.

Bank staff are there all the way, and they ain't gonna let someone steal their money.

 

Errors in your post.

2. Your wife applies for the loan, the company might have a friend to influence the banks decision.

(as a non-Thai you probably won't be invited to play any part in the application)

 

3. The bank staff pay for the house at the land office, in the room with your wife.

(as a non-Thai you won't be invited to participate)

 

This is not a process can done with a private seller, house will need to be a new build purchased direct from the developer.

[blackcab]

Safest way is to get a bank cheque (called a Manager cheque). They are the most usual and accepted way to pay. They cost about 25 baht from SCB bank, but all banks have them.

 

You hand over the cheque when the land office official says so.

 

Take cash to pay the government fees and taxes.

 

This route is very uncomplicated and has as close to zero risk as is possible. You purchase the cheque(s) the day before the purchase, and you send a photo to the seller so they can verify the authenticity of the cheques. You can specify that the cheque is A/C Payable only, so if you lose the cheque it can only be deposited in the named account.

 

You only hand over the cheque when instructed to do so - which means that at that point the transfer has been accepted by the Land Office as valid and they agree to change ownership subject to you handing over the payment.

 

If the property has a mortgage on it you will be asked for 2 cheques. The first cheque will be made payable to the bank holding the mortgage, and it will be for the exact price to pay off the debt on that day. The seller will arrange for an official from the bank to be present to accept the cheque and to release the bank's mortgage on the property.

 

The second cheque will be for the balance of the money and will be made payable to the seller.

[baansgr]

Property transfer in Thailand is one of the easiest in the world. See a house, agree a price, go to land office and pay...you take money and if Thai name ID card and current Ta bien..owner takes Cha note, ID and Tambien...agree split on taxes...easy peasy lemon squesy...no agent, no lawyer required...and no way of being scammed

[stapoz]

18 hours ago, baansgr said:

Property transfer in Thailand is one of the easiest in the world. See a house, agree a price, go to land office and pay...you take money and if Thai name ID card and current Ta bien..owner takes Cha note, ID and Tambien...agree split on taxes...easy peasy lemon squesy...no agent, no lawyer required...and no way of being scammed

 

It is easy if legal status is simple (one thai owner and that's it). The home we are interested in has thai owner and usufruct for farang (boyfriend or husband). How to be sure the usufruct is cleared and the farang will not have any rights after the purchase? One lawyer said the usufruct must be cleared by court. Another one said that can be done by land office.
What's more the owner is not in thailand and a friend of the owner has authorisation to sell the house. So the transaction would proceed without the owner. I think the owner and the farang split up and they want to sell the house...

[Pravda]

18 hours ago, baansgr said:

Property transfer in Thailand is one of the easiest in the world.

 

18 hours ago, baansgr said:

...and no way of being scammed

Thanks for today's oxymoron. 

[blackcab]

3 hours ago, stapoz said:

 

It is easy if legal status is simple (one thai owner and that's it). The home we are interested in has thai owner and usufruct for farang (boyfriend or husband). How to be sure the usufruct is cleared and the farang will not have any rights after the purchase? One lawyer said the usufruct must be cleared by court. Another one said that can be done by land office.
What's more the owner is not in thailand and a friend of the owner has authorisation to sell the house. So the transaction would proceed without the owner. I think the owner and the farang split up and they want to sell the house...

 

I understand your concern, but in reality none of that really matters. The Land office will not transfer the property until it is completely satisfied that all encumbrances have been removed and that the seller has proved their bona fides. MN

 

It is for the seller to get the transaction to the point where the Land Office indicates it is time for you to make payment. Land Offices are very thorough about this route of thing, however it shouldn't stop you doing your due diligence.

 

For example, you should be able to have a Skype/Facetime/Line video chat with the owner and the usufructee to establish the situation.

[baansgr]

5 hours ago, Pravda said:

 

Thanks for today's oxymoron. 

Over the Yeats through work I've helped transfer hundreds of properties...The Land Office will never transfer a property unless all documentation is in order...what goes wrong is developers and agents running off with deposits...this is why just pay the full amount on completion, however OP now says there is a usufruct attached which of course isn't a straight forward transfer between buyer and seller

[khunPer]

Agree with @blackcab, 10 percent deposit to seller, and the balance by crossed Cashier's Cheque; and bring cash for your transfer fee, depending of what has been agreed in the sales agreement, normally/often buyer pay transfer fee, whilst seller pay taxes.

 

If you can make and sign the sales agreement by head-of-village (poo yai ban), and he sign as witness, you can be quite sure that everything is Okay. That's when you pay the 10 percent, or whatever agreed amount, deposit.

 

 

[blackcab]

In this case I wouldn't pay a deposit as the sellers are not in the country.

 

Instead pay 100 per cent on completion.

 

The usufruct should not be a concern as long as you verify with the land office that it will be removed immediately before the sale. Clearly, you do not want to buy a property with a usufruct and not remove it as you will remain obliged to honour the usufruct until its expiry.

[topt]

5 hours ago, blackcab said:

 

I understand your concern, but in reality none of that really matters. The Land office will not transfer the property until it is completely satisfied that all encumbrances have been removed and that the seller has proved their bona fides. MN

 

It is for the seller to get the transaction to the point where the Land Office indicates it is time for you to make payment. Land Offices are very thorough about this route of thing, however it shouldn't stop you doing your due diligence.

 

For example, you should be able to have a Skype/Facetime/Line video chat with the owner and the usufructee to establish the situation.

My understanding was that the owner can sell a property that has an Usufruct on it and the usufruct stays in place unless agreement is to remove?

I may be wrong but I would have thought the holder of the usufruct would need to give a signed instruction to the land office to remove it.

 

Should be easy enough for the OP to check first at the relevant land office? 

 

edit - posting at same time looks like we are saying the same. 

[khunPer]

10 hours ago, stapoz said:

How to be sure the usufruct is cleared and the farang will not have any rights after the purchase? One lawyer said the usufruct must be cleared by court. Another one said that can be done by land office.

You could have your lawyer to make due diligence at the land office before the transfer, to check if the usufruct servitude has been cancelled/removed from the title deed.

 

Only when the usufruct is void you should pay the deposit.

[blackcab]

1 hour ago, khunPer said:

You could have your lawyer to make due diligence at the land office before the transfer, to check if the usufruct servitude has been cancelled/removed from the title deed.

 

Only when the usufruct is void you should pay the deposit.

 

The usufruct will be removed at the same time the land is sold, as a consecutive transaction. This is the same as when you buy mortgaged property and the mortgage is cancelled prior to sale.

 

When you receive the title deed the first entry dated on the day of sale will be that the usufruct is cancelled. The second entry will be the sale from the previous owner to the new owner.

 

It's highly unlikely that the usufruct will be cancelled a day or more prior to the sale, so there will be no way of checking other than on the day of sale.

[rumak]

On 3/3/2020 at 6:53 PM, blackcab said:

It's highly unlikely that the usufruct will be cancelled a day or more prior to the sale, so there will be no way of checking other than on the day of sale.

the usufruct can be cancelled any time.....  meaning that the owner AND the usufructee complete the proper form and present it to the land office along with the chanote.   Then the deal is sealed and the usufruct is removed ( well, actually it is typewriten on the back of the chanote, just as the usufruct was before).   A receipt is given and then the owner returns in a day or few days (depending on how busy an office)  to receive the amended title.

I have done this both ways..... once on same day as sale,   but also had my name removed from a parcel my daughter still owns and where i live now.

[rumak]

On 3/3/2020 at 7:07 AM, stapoz said:

 

It is easy if legal status is simple (one thai owner and that's it). The home we are interested in has thai owner and usufruct for farang (boyfriend or husband). How to be sure the usufruct is cleared and the farang will not have any rights after the purchase? One lawyer said the usufruct must be cleared by court. Another one said that can be done by land office.
What's more the owner is not in thailand and a friend of the owner has authorisation to sell the house. So the transaction would proceed without the owner. I think the owner and the farang split up and they want to sell the house...

advice :  be careful !      As others have said transfers are simple IF  the DETAILS  are simple.

Here you have a situation where you do not know the facts,  and if the farang has a usufruct the

house CAN NOT  legally....again, legally..... be sold until his right as usufruct is rescinded.

Sure,  this can be done illegally with fake power of atty  or  bribes ......  but,  well you get the idea.   I would not pay anything or do anything until the usufruct is removed and I have seen that by seeing the back of the ORIGINAL  chanote.   AND even by verifying it at the land office to be sure there will be no problems.

Otherwise,  you might be making some  posts on this forum about your problems shortly ????

 

 

[ivor bigun]

On 3/2/2020 at 12:10 PM, BritManToo said:

Safest way is to get a home loan from the bank to pay for the house.

Bank staff are there all the way, and they ain't gonna let someone steal their money.

 

Errors in your post.

2. Your wife applies for the loan, the company might have a friend to influence the banks decision.

(as a non-Thai you probably won't be invited to play any part in the application)

 

3. The bank staff pay for the house at the land office, in the room with your wife.

(as a non-Thai you won't be invited to participate)

 

This is not a process can done with a private seller, house will need to be a new build purchased direct from the developer.

Our son got a bank loan and bought the house , my wife seemed to do all the work at the land office along with her besty who is a lawyer ,mind you i paid all the land fees.

all seemed quite easy ,mind you the misses used to be an agent so she knows all the ropes i suppose . we bought the house we rented.

[blackcab]

26 minutes ago, rumak said:

the usufruct can be cancelled any time...

 

You are quite correct, but most usufructees would not remove their usufruct on the promise that the land would be sold at a later date. The obvious thing for the usufructee to do is cancel the usufruct in a consecutive transaction on the day of sale.

[blackcab]

20 minutes ago, rumak said:

if the farang has a usufruct the

house CAN NOT  legally....again, legally..... be sold until his right as usufruct is rescinded.

 

Land with a usufruct can be legally sold without the knowledge, participation or consent of the usufructee. Or in other words, the buying and selling of land with a usufruct has nothing to do with the usufructee (unless they are buying it).

 

However, if land with a usufruct is sold, then the new owner must honour the terms of the usufruct, which remains extant.

 

In practice this means that most land with a usufruct is unsellable as nobody will purchase it unless it is for a very, very cheap price.

 

Each case is different though. It's one thing buying land with a usufruct when the usufructee is 96, and in poor health. It's another thing entirely buying the same piece of land if the usufructee is 40 year old iron man competitor.

[rumak]

24 minutes ago, blackcab said:

 

Land with a usufruct can be legally sold without the knowledge, participation or consent of the usufructee. Or in other words, the buying and selling of land with a usufruct has nothing to do with the usufructee (unless they are buying it).

 

However, if land with a usufruct is sold, then the new owner must honour the terms of the usufruct, which remains extant.

 

In practice this means that most land with a usufruct is unsellable as nobody will purchase it unless it is for a very, very cheap price.

 

Each case is different though. It's one thing buying land with a usufruct when the usufructee is 96, and in poor health. It's another thing entirely buying the same piece of land if the usufructee is 40 year old iron man competitor.

both land offices  that I have been to .....when wanting to sell seperate houses.... told me that

my daughter would need to remove my name as usufruct first.   I took them at their word. and it was not a problem because of course i was agreeable to that.

You could be right about being able to sell it ,  but this is what they told me and usually you will not get your way when arguing with the head man at the land office.  Have you actually tried selling something where you did not removed the usufruct first (without their permission?)    

Like i said, maybe you are right and they would have said...ok,  go ahead and sell it BUT who is going to buy it ?     I will ask them next time if its possible.....     thanks

 

 

 

 

[blackcab]

12 hours ago, rumak said:

Have you actually tried selling something where you did not removed the usufruct first (without their permission?) 

 

I have.

[rumak]

1 hour ago, blackcab said:

 

I have.

i take that to mean that you ( or the owner)  sold without needing to remove the usufruct.

We all know each land office has its own "rules".    Maybe I was mistaken when the hua nah told me we "had to"  remove it first.      this was in CM   ,   and also Lamphun told me same

[blackcab]

2 hours ago, rumak said:

We all know each land office has its own "rules"

 

I completely agree with you on this. Fortunately the Land Office has a legal department that will instruct regional offices on the correct procedure if you happen to know someone who works there.

 

This doesn't mean the regional office will change its ways; more like they will begrudgingly process your request because they have to.