Paying for a condo in instalments

[banagan]

I'm interested in purchasing a condo, but not at the asking price (2019 prices)

 

I think a 2016 - 2017 price would be more than fair, around 8 - 12% less. Considering

 

1. Pre Corona

2. Rents haven't increased in the past 5 years

 

If they don't want to accept the actual value of the property < 10% of asking, I was thinking of offering this,

 

Offer asking under the following conditions,

 

50% now and the balance paid monthly over 36 months (0% interest)

 

I think face and stubbornness plays a big part in the property market here, rather the current reality of the situation.

 

Do you think this is a fair compromise?

 

There are no mortgage/loan options here for foreigners other than going through a Thai, or jumping through tons of hoops and being price gouged.

[blackcab]

23 minutes ago, banagan said:

Do you think this is a fair compromise?

 

You do realise that if you do this, you will not receive the title deed until the final payment is made. In other words, the property will not be transferred to your name until you have fully paid for it. Your payments will not be secured on the property and they will be made at your own risk. This means that if the developer goes into administration, you will probably lose all payments you have made and you will definitely not own the condo unit either.

 

One of the reasons for this is that nearly all new condos are built with bank finance and as such the first mortgagor needs to approve any further debt that is secured against the title deed. I guarantee you the mortgagor will not approve this.

 

Personally I would keep it super simple: Agree a price you are happy with, or walk away. Deals like the above place you at risk at what is an unpredictable time.

[banagan]

10 minutes ago, blackcab said:

 

You do realise that if you do this, you will not receive the title deed until the final payment is made. In other words, the property will not be transferred to your name until you have fully paid for it. Your payments will not be secured on the property and they will be made at your own risk. This means that if the developer goes into administration, you will probably lose all payments you have made and you will definitely not own the condo unit either.

 

One of the reasons for this is that nearly all new condos are built with bank finance and as such the first mortgagor needs to approve any further debt that is secured against the title deed. I guarantee you the mortgagor will not approve this.

 

Personally I would keep it super simple: Agree a price you are happy with, or walk away. Deals like the above place you at risk at what is an unpredictable time.

It's not a new condo or development.

 

I bought from the same owner already and paid in installments over 4 months. The property agent I used prepared all documents we both signed, stating the terms. 

 

Wouldn't a legal document like this not protect both parties?

 

[blackcab]

Yes, to an extent. However you do not gain ownership of the property until the title deed is in your name.

 

For example, what happens if the owner dies before the final payment is made when the title is transferred into your name? It could get very messy indeed.

 

The point to consider is that to enforce the terms of a contract, you must go to Court. In Thailand that is a very long and expensive process that will cost you a substantial amount of money, with no guarantee of receiving anything at the end of the process.

 

A four month contract is one type of risk. A three year contract is another thing entirely.

[banagan]

33 minutes ago, blackcab said:

Yes, to an extent. However you do not gain ownership of the property until the title deed is in your name.

 

For example, what happens if the owner dies before the final payment is made when the title is transferred into your name? It could get very messy indeed.

 

The point to consider is that to enforce the terms of a contract, you must go to Court. In Thailand that is a very long and expensive process that will cost you a substantial amount of money, with no guarantee of receiving anything at the end of the process.

 

A four month contract is one type of risk. A 3 year contract is another thing entirely.

I hear what you're saying, valid points. I wouldn't proceed unless the contract was pretty air tight, but yes, there is a measure of risk involved.

 

[blackcab]

If you have an "air tight" contract, it will still have to be taken to the Civil Court if the seller or his successors do not perform. In Thailand there is no concept of precedence, so each case can be appealed as far as the Supreme Court if either the plaintiff or the defendant choose to do so. In such cases the outcome could take up to 10 years.

 

A legally sound contract is an excellent thing, but in Thailand exactly what are you going to do if someone simply ignores your legally sound contract? The police and the Land Office will do nothing, because it is a civil matter. You will have to go to Court to get a judgement, and then to 1 or 2 more Courts, each of which may give a different judgement altogether.

 

Finally, when you have completed this process, you would have to have the judgement executed. At which point you may then find out that the condo unit has been sold and resold, and as such you have no claim to it, despite have spent hundreds of thousands or even millions of baht in legal and Court fees.

 

Please do not misunderstand me. I am not impugning the seller. There are very many honourable sellers out there, and they have decent and honourable families who would do the right thing if the seller died during the 3 year contract.

 

If you ask me if I would do the above deal myself, I would have to say no. For me the deal would contain too much risk. On the other hand, your risk appetite may well be different than mine. Nothing wrong with that at all, as long as you know the facts before you do the deal.

[banagan]

https://salecondo.net/installment

 

Looks like its a thing...

[banagan]

38 minutes ago, blackcab said:

If you have an "air tight" contract, it will still have to be taken to the Civil Court if the seller or his successors do not perform. In Thailand there is no concept of precedence, so each case can be appealed as far as the Supreme Court if either the plaintiff or the defendant choose to do so. In such cases the outcome could take up to 10 years.

 

A legally sound contract is an excellent thing, but in Thailand exactly what are you going to do if someone simply ignores your legally sound contract? The police and the Land Office will do nothing, because it is a civil matter. You will have to go to Court to get a judgement, and then to 1 or 2 more Courts, each of which may give a different judgement altogether.

 

Finally, when you have completed this process, you would have to have the judgement executed. At which point you may then find out that the condo unit has been sold and resold, and as such you have no claim to it, despite have spent hundreds of thousands or even millions of baht in legal and Court fees.

 

Please do not misunderstand me. I am not impugning the seller. There are very many honourable sellers out there, and they have decent and honourable families who would do the right thing if the seller died during the 3 year contract.

 

If you ask me if I would do the above deal myself, I would have to say no. For me the deal would contain too much risk. On the other hand, your risk appetite may well be different than mine. Nothing wrong with that at all, as long as you know the facts before you do the deal.

Thanks, appreciate the feedback.

[bkk6060]

Don´t listen to the naysayers on this.

It is a very very popular way to negotiate a purchase now.

In fact, I would stretch it out 7 to 10 years.

Maybe pay minimal interest.

Owners carrying back paper on properties is becoming very common and good agents will direct buyers on how to construct a proper contract.

Desperation, want to get out, what ever it takes is the current market.

You as the buyer are in control, so make sure you are.

[baansgr]

You already purchased, so is this one for rental?....very few clients around and that isn't going to change. I'm seeing rentals at 50% less...1 bed Park Lane..5k a month and still no takers...many other similar also

[Cricky]

16 hours ago, banagan said:

It's not a new condo or development.

 

I bought from the same owner already and paid in installments over 4 months. The property agent I used prepared all documents we both signed, stating the terms. 

 

Wouldn't a legal document like this not protect both parties?

 

You must make sure the Chanote is kept in a safe place.

A Lawyer etc.

If the Vendor has it they can resell the property.

[LukKrueng]

14 hours ago, bkk6060 said:

Don´t listen to the naysayers on this.

It is a very very popular way to negotiate a purchase now.

In fact, I would stretch it out 7 to 10 years.

Maybe pay minimal interest.

Owners carrying back paper on properties is becoming very common and good agents will direct buyers on how to construct a proper contract.

Desperation, want to get out, what ever it takes is the current market.

You as the buyer are in control, so make sure you are.

If anyone offered me such a deal to buy my condo I will respectfully decline

[Bender Rodriguez]

18 hours ago, banagan said:

50% now and the balance paid monthly over 36 months (0% interest)

 

lol

you expect the title deed in 36 months , right ?

[vukovar77]

17 hours ago, banagan said:

It's not a new condo or development.

 

I bought from the same owner already and paid in installments over 4 months. The property agent I used prepared all documents we both signed, stating the terms. 

 

Wouldn't a legal document like this not protect both parties?

 

No,You are not well protected like in western countries.

[natway09]

I would be very surprised if this happens in Western countries outside of developers terms.

The norm is to arrange a mortgage from your bank & then settle.

The bank holds the title until you finish payment

[MarleyMarl]

Agree with what others have said, keep it simple, or run the high risk of getting screwed.

[Onrai]

On 5/28/2020 at 3:21 PM, banagan said:

I'm interested in purchasing a condo, but not at the asking price (2019 prices)

 

I think a 2016 - 2017 price would be more than fair, around 8 - 12% less. Considering

 

1. Pre Corona

2. Rents haven't increased in the past 5 years

 

If they don't want to accept the actual value of the property < 10% of asking, I was thinking of offering this,

 

Offer asking under the following conditions,

 

50% now and the balance paid monthly over 36 months (0% interest)

 

I think face and stubbornness plays a big part in the property market here, rather the current reality of the situation

Essentially you are buying an option and betting  prices will increase within  the next 36 months? Prices go up 10% you are win. Prices stay flat or go down then you’ve overpaid and lost your 50% deposit and any other payments made.

Sounds a lot simple to offer him 10% less. 

[Max69xl]

On 5/28/2020 at 4:08 PM, banagan said:

It's not a new condo or development.

 

I bought from the same owner already and paid in installments over 4 months. The property agent I used prepared all documents we both signed, stating the terms. 

 

Wouldn't a legal document like this not protect both parties?

 

Why do you say you won't buy a condo at 2019 prices? Imo, it was cheaper last year compared to 2015-2016. 

[simon43]

For example, what happens if the owner dies before the final payment is made when the title is transferred into your name? It could get very messy indeed.

 

A problem similar to this happened to me about 15 years ago in Phuket.  My Thai GF and I intended to buy a plot of land to build some golf condos.  The purchase contract was prepared and we paid the lawyer who promised to place our payment of 2.5 million baht in an escrow account.  In fact, they paid the money to the Thai seller of the land!  However, he was an honourable man, and went to sign the papers at the land office.  On the way, he dropped dead of a heart attack! (true).  After a long delay, his estate was sorted out, but his family refused to sign off this plot of land to my GF, even though they acknowledged that their father had received full payment for it.  I paid various lawyers to resolve the problem, all who took my money and ran.....

 

My GF never got that plot of land, my 2.5 million baht and lawyer fees all down the drain.

 

So be careful - the worst thing can and does sometimes happen....

[banagan]

On 5/29/2020 at 9:00 PM, Max69xl said:

Why do you say you won't buy a condo at 2019 prices? Imo, it was cheaper last year compared to 2015-2016. 

Not this building, prices were cheaper back in 2014 - 2016