Buying house, paying in installments

[Beck1976]

My wife and I are considering purchasing the house, we are currently renting (for 8 years now). I am fully aware, that it will all be in her name, and I will have no claim, so by "we", legally everything is "her".

 

The owner have currently mortgaged the property at the local Islamic Bank. They hold a lien for about 50% of the discussed purchase price. Remaining debt is only 35% at the moment.

We have done a title deed search at the land office, there are no other liens or mortgages, and there is nothing to indicate problems with chain of ownership.

 

Downpayment would be 15% of the purchase price

The payment plan discussed is downpayment now, 6 years of monthly installments, and a final big payment at the end, to pay off the mortgage, and have the lien removed.

I, of course, want to make sure we cant get cheated.

 

As I understand it, the chanote will not be transferred to my wifes name, until the final payment is made. Is this normal procedure here with private financing? ( I had expected title transfer now, and he would then have a lien on the house as collateral)

In that case, what is the best way, we can protect ourselves? I want to make sure, that he is unable to either obtain additional mortgage (that would then have to be paid off, before a title transfer could be done), or outright selling it to someone else. We will of course have a contract regarding the deal, receipts for payments etc, but would obviously prefer to make it as difficult as possible for him to pull any tricks, should he have any ill intentions

Can we have a lien registered on the chanote, to "secure" our downpayment? Perhaps updated yearly to represent the additional monthly payments that have been made? How should we go about this?

 

He suggested that we could pay off the mortgage now, and then hold on to the original physical chanote (currently held by the Islamic bank), but I fail to see how it offers us much protection? I understand he need the original to sell the land, obtain mortgage etc. But if he approaches the land office, claims it have been lost in a fire, wouldnt they eventually issue him a new one? And the only way we would be informed about something like this, is if we have a claim registered on the chanote?

And if the Islamic Bank feel they need to hold on to the physical chanote, is it even  possible for us to register a lien? Ours would of course be secondary to theirs claim, but unsure how it would even be done practically.

 

Second issue, it turns out part of the driveway and garden is outside the area designated by the chanote (been like that for many, many years). It have been extended to close to the road so is encroaching on public land. So there is a change the local OrBaTor at some point will reclaim that part of the land, which I have factored in regarding the price. But are there any risks of a penalty or fee because of this? Or would we simply be ordered to tear down the wall, and then re-erect it within the correct chanote designated area?

 

All advice and comments welcome, let me know if more info is needed.

[stubuzz]

17 minutes ago, Beck1976 said:

Is this normal procedure here with private financing? ( I had expected title transfer now, and he would then have a lien on the house as collateral)

There are 2 ways of doing this one is below.

https://magnacarta.co.th/home/faq-section-2/sale-with-the-right-of-redemption-kai-fak/

20 minutes ago, Beck1976 said:

Second issue, it turns out part of the driveway and garden is outside the area designated by the chanote (been like that for many, many years). It have been extended to close to the road so is encroaching on public land. So

Pay to have re-measurement done and markers put in.

 

[blackcab]

Q: Is this normal procedure here with private financing?

 

A: Yes. You don't get the title deed until the final payment is made.

 

Q: What is the best way, we can protect ourselves?

 

A: There is no real way of protecting yourselves. This is why the scheme you propose is not at all common between private individuals in Thailand.

 

Q: Can we have a lien registered on the chanote, to "secure" our downpayment?

 

A: No. The property already has a mortgage registered against it, so no further encumbrance can be added without the permission of the original mortgagor. The original mortgagor will never agree to this.

 

Q: He suggested that we could pay off the mortgage now, and then hold on to the original physical chanote (currently held by the Islamic bank), but I fail to see how it offers us much protection?

 

A: It offers no protection. The owner can report the original chanote lost and then apply for a replacement. Physically holding a chanote if you do not have an encumbrance registered on it means nothing.

 

In addition, you would not get the chanote the same day you paid off his mortgage for him. The bank holds his chanote, and it would take a few days to get it back before your encumbrance could be placed on it. During that time you are completely at risk. In addition, the owner could simply refuse to register it. At this point you would have to pay to take him to Court. By the time you received a judgement, the house could have been sold on and you would have zero chance of ever getting your money back.

 

Q: And the only way we would be informed about something like this, is if we have a claim registered on the chanote?

 

A: You wouldn't be informed at all.

 

Q: Or would we simply be ordered to tear down the wall, and then re-erect it within the correct chanote designated area?

 

A: And pay to make good the public area.

 

In addition, the main point you have not considered is that any contract you have with the owner would not be a real property right. What this means is that if the owner died, you would have to make a claim against the deceased's estate. You may or may not be successful as you would be an unsecured creditor.

 

It's a similar situation if the owner was declared bankrupt. Or divorced. Or became mentally incapacitated.

 

These sorts of agreements between private individuals are absolutely fraught with risk, and the risk is all yours.

[Beck1976]

Thank you very much for the answers. 
Although i didnt get the answers I was hoping for ????

A couple of follow-up questions:
 

Quote

A: No. The property already has a mortgage registered in it, so no further encumbrance can be added without the permission of the original mortgagor. The original mortgagor will never agree to this.

Wouldnt our claim be registered as ranking second, and therefore not affect the primary mortgagors claim? Or is secondary/tertiary etc claims not really a thing here?

 

Quote

In addition, you would not get the chanote the same day you paid off his mortgage for him. The bank holds his chanote, and it would take a few days to get it back before your encumbrance could be placed on it. During that time you are completely at risk. In addition, the owner could simply refuse to register it

Wouldnt we run the same risk, if we paid the entire amount right away instead of installments? Either way, the mortgage needs to be paid of and the chanote released. 

 

 

 

[DrJack54]

OP, you have some excellent informed replies above. 

My advice is far less technical. BTW in the last couple of months I did basically exact same thing. One difference is that I paid for it all (including makeover) in cash. That's not a brag, it's more that if/when I kick it my Thai partner would have zero debt and mortgage commitments etc.

You did not mention what the price is that your paying and your timeframe to complete payment and have full ownership.

Sounds like a mine field to me.

 

[blackcab]

Q: Wouldnt our claim be registered as ranking second, and therefore not affect the primary mortgagors claim? Or is secondary/tertiary etc claims not really a thing here?

 

A: Secondary mortgages are possible, but only with the consent of the primary mortgagor. No primary mortgagor is ever going to grant that consent in Thailand as it makes any potential Court action more complex if there is a default.

 

Why would a primary mortgagor agree to any encumbrance that will weaken their position? Believe me, you will never receive consent.

 

Q: Wouldnt we run the same risk, if we paid the entire amount right away instead of installments? Either way, the mortgage needs to be paid of and the chanote released.

 

A: There is zero risk doing it this way. In fact it is the way nearly every property with a mortgage is transacted. This is the process:

 

You and the seller agree a price and a sale date. The seller informs their bank of the sale date. The bank informs the seller of the exact amount required to redeem the mortgage on that day. The seller passes this information on to the buyer. The buyer prepares two bank cheques. The first cheque is payable to the seller's bank and is in the exact amount to redeem the mortgage. The second cheque is payable to the seller and is for the difference between the redemption figure and the sales price.

 

On the day of the sale the bank will send an employee to the land office with the physical chanote. The bank employee verifies your cheque in their favour then hands the chanote over to the land office. When the land officer is satisfied of everyone's identity and that the sale should proceed you hand over the second cheque to the seller. At this point the buyer and seller sign the sales agreement which is witnessed by the land officer.

 

The taxes and fees are then paid, and the receipt given to the officer to verify. Once the land officer is happy the government has received their slice the title deed is officially endorsed. The first endorsement is the removal of the mortgage. The second endorsement is the sale from the seller to the buyer.

 

When the chanote is handed back the transaction is complete. The chanote will be handed back the same day.

 

This exact procedure happens literally tens of times a day in every land office in the country. In Bangkok it can happen literally hundreds of times per day, and I am not exaggerating. Consider that every single new condo is sold this way. One payment to the developer's bank to redeem the mortgage, and the balance to the developer.

[1FinickyOne]

If you feel uncomfortable with this deal then either restructure it or be prepared to feel uncomfortable for the next 6 years...

 

I would not feel comfortable either... 

 

Can you get a loan elsewhere and pay in cash in full? 

[KKr]

16 hours ago, Beck1976 said:

it turns out part of the driveway and garden is outside the area designated by the chanote (been like that for many, many years). It have been extended to close to the road so is encroaching on public land

could it be that a road improvement i.e. widening is upcoming ?

[Beck1976]

Thank you all for the replies.

 

@DrJack54

Im only mid-forties, and the payment would be done in 6 years maximum, so I definitely hope Im still around by then.

The purchase price is 3.5 million fwiw. That is already an attractive price for the place, and since he was willing to do interest free installments, the effective price is even lower.

 

@1FinickyOne

For now Im just trying to understand the various risks, as this is the first time Im doing a RE purchase, where the seller arent paid in full right away. 

I was unable to mortgage a property I own in Denmark, as I havent lived or worked inside EU for many years now.

If international travel restrictons are lifted, we can pay the full amount in a year, but that is out of my control, so dont want to rely on that.

Furthermore he dont want to wait that long, as he need the downpayment to pay of debt to his family. 

 

@blackcab

I wasnt aware the court action would become more difficult. In that case I fully understand the primary mortgagor wont allow it.

 

The way you describe a normal land transaction is pretty much how I imagined it.
What I meant was, that in any case we would need to hand over a cheque for the amount of the existing mortgage, as well as the remaining sum. But since that will be in front of several witnesses, I can see how that will be completely safe.

 

I am willing to assume some risk, to make the deal happen, as long as I know what the risks are. While I would obviously hate ending up in court, I believe we would stand a good chance of recovering our money, as he owns a few more properties (at present time debt free, although that can change of course).

 

If we pay of the mortgage, assuming he still cooperates, we would then be able to place a lien on the house, for the amount we had paid, right? 
Exactly how would that lien protect us? We would be able to block any further encumbrances on the property, as well as preventing him from selling it?

Would we be in a better position, should he pass away? If he got divorced?

Would we need a property lawyer, or can it be done with just the seller and my wife present at the land office? And what kind of costs/taxes are associated with this?

I havent been able to find information, how its practically done.

 

Thank you in advance.

[1FinickyOne]

4 minutes ago, Beck1976 said:

he need the downpayment to pay of debt to his family. 

this is not really a good sign to me... someone w/financial problems is not someone I want to be doing business with.. even if it cost a bit more, can you get a bank loan, either here or back home? This sounds like someone I never want to see again... you have been renting from him for a long time, why doesn't he have money? 

[Beck1976]

1 hour ago, KKr said:

could it be that a road improvement i.e. widening is upcoming ?

it have of course crossed my mind, but I dont think so. He have been asking us for several years, if we were interested in buying the property, but his asking price was way to high.

 

Furthermore, they have been putting in drainage between the road and the wall, this last year, for a long stretch of the road, so I doubt there are any plans to widen it. Also, there is not that much traffic, so a widening isnt necessary.

Finally, there is an electricity pole, that the wall was build around back then, that the electric company will move outside the wall beginning of next week.

 

[Beck1976]

3 minutes ago, 1FinickyOne said:

this is not really a good sign to me... someone w/financial problems is not someone I want to be doing business with.. even if it cost a bit more, can you get a bank loan, either here or back home? This sounds like someone I never want to see again... you have been renting from him for a long time, why doesn't he have money? 

I fully get your point, but find his situation "believable", in lack of better word.

He build a 4-unit apartment building, right next to his house, which was financed by selling another house 3 years ago, and then a smaller loan from family. He only got one tenant so far though, who recently moved in, at 9000/month I think. We are in one of the tourist villages on the west coast of Phuket, so a lot of vacancies due to Covid. We've been paying 15k/month, and both he and his wife are retired, so have been relying on rental income.

 

Despite sufficient networth and income, we have not been able to obtain a loan, unfortunately. My wife is a stay-at-home mom for many years, and I make my income primarily from rental income from Denmark. Thai banks wants us to work in Thailand, and Danish banks wants me to live and work within EU.

[natway09]

If you wish to proceed, your first port of call is his bank.They can & will restructure for both of you & ensure you are protected  (they hold the title deed now? )

Make any arrangements through them with your lawyers approval & only pay any monies to the bank.

They can pay the old owner any residual

[blackcab]

Q: I believe we would stand a good chance of recovering our money, as he owns a few more properties (at present time debt free, although that can change of course).

 

A: I am sure the seller and his family are honourable people and that you will have no problems at all.

 

I would point out though that a final judgement of Court in matters such as these can take up to ten years, and then you have to have the judgement executed.

 

Importantly, you will have to pay your own legal costs every step of the way, which could be a very substantial su of money indeed. And then when you finally take possession of your property the house itself could be totally stripped bare of everything apart from the walls.

 

Or you could take possession and find a tenant in situ with a 3 year lease. You would then have to pay to take the tenant to Court to evict them (and there would be very little chance of the Court evicting a tenant in this situation).

 

Q: If we pay of the mortgage, assuming he still cooperates, we would then be able to place a lien on the house, for the amount we had paid, right?

 

A: Yes, but only if the seller grants you permission to do this.

 

Q: Exactly how would that lien protect us? We would be able to block any further encumbrances on the property.

 

A: No, because you would not have a mortgage. You would have a different type of encumbrance, which would allow the owner in some circumstances to place other types of encumbrance against the property without your consent.

 

Q: ...as well as preventing him from selling it?

 

A: You cannot stop the owner selling their property. They do not need your consent to do so, but they must repay you any money owed before the sale is officially recorded. If you refuse to accept the money or you are not available the owner can pay the full sum to the land office who will keep the money until you claim it from them.

 

If your encumbrance is for 1 million, but towards the end of the contract you have paid 3 million in total, the owner can pay you 1 million, sell the property and keep the additional payments of 2 million. You would have to pay to take the owner to Court for the 2 million and hope they had any assets left to claim against after the Court case was finally completed.

 

Q: Would we be in a better position, should he pass away? If he got divorced?

 

A: Yes, because you would have a real property right, but only for the sum encumbered.

 

Q: Would we need a property lawyer, or can it be done with just the seller and my wife present at the land office?

 

A: It can be done without a lawyer. Thai people do not use lawyers unless the transaction is especially complicated. The land office officials are really helpful if you give them a little thank you money.

 

Q: And what kind of costs/taxes are associated with this?

 

A: It's impossible to answer this. You need to ask at your land office. Fees and taxes are not a secret; they will tell you if you ask.

[khunPer]

About deed registration and ownership 

To my experience and knowledge, a title deed cannot be transferred to a new registered owner, before all debt and interest declared as servitude (i.e. mortgage) has been fully paid.

 

In theory you, or rather your wife, owns nothing. You have an agreement with the seller, and if anything goes wrong it’s a question of taking the seller to court and claim compensation.

 

So it’s a question of thrust between the parties – the bank holding the mortgage servitude will act accordingly to the law – however, often people are trustworthy, but you don’t have a guarantee; i.e. what if the owner dies and you are going to negotiate with heirs about “your home”?

 

The best way would be to pay off the mortgage, and fully pay the seller for the property, move the title deed to your wife’s name, and obtain a new mortgage registered as servitude. This might also be what you are used to from your home country, so it is in my home country. The bank will normally hold the title deed, and in principle the bank is the owner of the property, as the bank might also have a power of attorney to move the title; i.e. when you have a mortgage, you don’t really own your home, but isn't that’s how it is almost all over the World?

 

About land occupying public area 

Concerning some of the land being on public land, which might cause a problem in the future, it might also widely depend on how it’s locally handled, and other external circumstances. In older time the land was not measured very correctly, and later upgrades to higher title deeds often changed the land borders, so when for example upgrading from Nor Sor Sarm-title to Chanote-title, the borderline could have been moved; the process could have been over a number of various titles from originally claiming land, or a family being granted land.

 

I have personal experience from land covering area owned by the Marine Department, the owner of most, if not all, Thai beaches; i.e. kind of public land. In older time coconut palms were planted in the corners to mark the land borders. So was my land marked, and the Nor Sor Sarm title deed cement markers were fairly close to the palms. The previous owner had made a beachfront protection by cement rings, but in a line with the palms, which were little outside the cement markers, to stop erosion during monsoon season; the cement rings had been there for 20 years or longer when I bought the land.

 

Before building anything I wanted the land upgraded to Chanote title and full ownership, which include acceptance from all neighbors, satellite measure of land borders and new cement markers. However, the new beachfront markers were about two and a half meter further back from the beachfront, and thereby the erosion protection. Shortly after a lot of important looking people in uniforms showed up, and said they came from the Marine Department, and that my land and erosion protection was occupying public beach. This claim was caused by incident a few years earlier with tsunami on the Phuket side of the Malacca Peninsula, where lots of land were illegally used to close to the beachfronts, and therefore damaged by the tsunami. So it was not only me, but almost all beachfront landowners with erosion protection occupying public beach.

 

We were all taken to court, a quite long lasting process, where we had to explain our cases, and finally pay fines. Some years later the beachfront landowners could apply for use of the illegally occupied area, and pay a rent for using it. In my case I was lucky, having plead guilty from the beginning, and could document that I haven’t raised the erosion protection, which was part of the property when I took over, but if I had removed it, I would have damaged the neighbor's land during monsoon storms. My fine was minor compared to some of the other landowner’s that were fined more than 15 times as much for even a smaller occupied beach-area. 10 years years later I eventually I got a written permission to use the beachfront land without paying any fees.

 

I.e. amazing Thailand: In worst case you might not only be asked to remove whatever is occupying public land, but you could also be both fined, and asked to pay compensation.

In best case scenario nothing at all happens...????

[chilly07]

Refinance entirely through another bank and both your wife and the new bank will be registered on the chanote removing the current owner from any claim. You can get your name on the title with a usufruct but will need a lawyer for that

[1FinickyOne]

3 hours ago, Beck1976 said:

I fully get your point, but find his situation "believable", in lack of better word.

He build a 4-unit apartment building, right next to his house, which was financed by selling another house 3 years ago, and then a smaller loan from family. He only got one tenant so far though, who recently moved in, at 9000/month I think. We are in one of the tourist villages on the west coast of Phuket, so a lot of vacancies due to Covid. We've been paying 15k/month, and both he and his wife are retired, so have been relying on rental income.

 

Despite sufficient networth and income, we have not been able to obtain a loan, unfortunately. My wife is a stay-at-home mom for many years, and I make my income primarily from rental income from Denmark. Thai banks wants us to work in Thailand, and Danish banks wants me to live and work within EU.

sounds like you know the business... and the guy involved... make your own judgments - go with your gut but if you have even small misgivings, forget it... there are countless other properties for sale in Phuket and even more business opportunities for investment... 

 

best of luck to you.. 

[blackcab]

5 hours ago, khunPer said:

...and in principle the bank is the owner of the property, as the bank might also have a power of attorney to move the title; i.e. when you have a mortgage, you don’t really own your home, but isn't that’s how it is almost all over the World?

 

Actually not. A fundamental principle of a mortgage is that the bank does not own the property.

 

Ownership of the property remains with the purchaser while the bank has an encumbrance over the property.

 

This is a very important distinction as the bank has no right to evict you from the premises without first following due legal process.

 

What you refer to in your post is, "Sale with the right of redemption"; a very different procedure indeed.

[MadMuhammad]

I recently purchased a property under ‘owner finance’

We paid a 3mil deposit on a 5mil property (discounted from 6.5). We attended the land office and the chanote was registered in my wife’s name with the finance stipulation recorded on the back. We also signed a contract that laid out the finance, 30K a month over 3 years with 3-5% interest and a final payment of 1.08mil and loss of rights with 60 day default of payment. 
We were sure to do due diligence with a reputable lawyer before going ahead. 

[bojo]

If it was me, I would want to keep it simple and if it couldn't be, then I would walk away....there always another deal..........

[Pmbkk]

 

If it doesn't feel right( too many ifs and buts that can't be answered) - it isn't.

 

Stop now and stop wasting time and effort.

[Beck1976]

Once again, thank you all for the replies, I am very grateful.

 

 

Quote

 

Q: I believe we would stand a good chance of recovering our money, as he owns a few more properties (at present time debt free, although that can change of course).

 

A: I am sure the seller and his family are honourable people and that you will have no problems at all.

 

I obviously dont expect him to be a bad actor, but just trying to get a grasp of what we possibly could be facing.

 

Quote

 

Q: Exactly how would that lien protect us? We would be able to block any further encumbrances on the property.

 

A: No, because you would not have a mortgage. You would have a different type of encumbrance, which would allow the owner in some circumstances to place other types of encumbrance against the property without your consent.

 

So even with a lien, our claim would be different, than a bank holding a mortgage? Could he obtain further debt (mortgage the house again)? Or are you referring to leases, usufructs and similar? 

 

 

Quote

 

Q: ...as well as preventing him from selling it?

 

A: You cannot stop the owner selling their property. They do not need your consent to do so, but they must repay you any money owed before the sale is officially recorded. If you refuse to accept the money or you are not available the owner can pay the full sum to the land office who will keep the money until you claim it from them.

 

If your encumbrance is for 1 million, but towards the end of the contract you have paid 3 million in total, the owner can pay you 1 million, sell the property and keep the additional payments of 2 million. You would have to pay to take the owner to Court for the 2 million and hope they had any assets left to claim against after the Court case was finally completed.

 

So if we had a contract, stating that he had agreed to sell the house to us, and the encumbrance were related to that, if he insisted on selling it to a third party, we would have to take him to court, if we wanted him to honor the original contract. Could he still sell the property while the court proceedings was going on? 

This is relevant to me, as I believe we buy it at a good price (partly due to him wanting to pay of other debt, and partly covid), but the property could potentially be worth more in 3-4 years, but before the payments are finalized and the deed is in my wifes name.

Basically, if we after 4 years have paid 3 million (out of a total price of 3.5 million), and he happened to find a buyer who wanted to pay 4.5 million, then what? Would the sale be obstructed until it was settled in court? or would he still be able to sell it, and the very best we could hope for (after potentially years of court appearances and associated costs), was to recover the 3 million paid?

 

 

21 hours ago, khunPer said:

About deed registration and ownership 

To my experience and knowledge, a title deed cannot be transferred to a new registered owner, before all debt and interest declared as servitude (i.e. mortgage) has been fully paid.

 

In theory you, or rather your wife, owns nothing. You have an agreement with the seller, and if anything goes wrong it’s a question of taking the seller to court and claim compensation.

 

So it’s a question of thrust between the parties – the bank holding the mortgage servitude will act accordingly to the law – however, often people are trustworthy, but you don’t have a guarantee; i.e. what if the owner dies and you are going to negotiate with heirs about “your home”?

 

The best way would be to pay off the mortgage, and fully pay the seller for the property, move the title deed to your wife’s name, and obtain a new mortgage registered as servitude. This might also be what you are used to from your home country, so it is in my home country. The bank will normally hold the title deed, and in principle the bank is the owner of the property, as the bank might also have a power of attorney to move the title; i.e. when you have a mortgage, you don’t really own your home, but isn't that’s how it is almost all over the World?

 

About land occupying public area 

Concerning some of the land being on public land, which might cause a problem in the future, it might also widely depend on how it’s locally handled, and other external circumstances. In older time the land was not measured very correctly, and later upgrades to higher title deeds often changed the land borders, so when for example upgrading from Nor Sor Sarm-title to Chanote-title, the borderline could have been moved; the process could have been over a number of various titles from originally claiming land, or a family being granted land.

 

Snip...

 

Seller finance may happen in my home country rarely and then only for a small amount of the price, usually the remainder of what the mortgage and downpayment can cover. It is a safe way for the buyer though (although expensive), as the deed is transferred, and the seller is then holding a debt claim against the buyer.

 

Regarding occupying public land, Im fully aware that at any point they could claim it back, and we would lose the right to use it, I have factored that in to the price.

It is more the prospect of possibly being sued, and repercussions that worries me. The owners comment was "nobody have ever complained about it" and he seemed surprised that I actually found it to be a problem ????

Several other houses in the area have built just as close to the road, but whether they are outside their chanote, I dont know.

 

 

9 hours ago, MadMuhammad said:

I recently purchased a property under ‘owner finance’

We paid a 3mil deposit on a 5mil property (discounted from 6.5). We attended the land office and the chanote was registered in my wife’s name with the finance stipulation recorded on the back. We also signed a contract that laid out the finance, 30K a month over 3 years with 3-5% interest and a final payment of 1.08mil and loss of rights with 60 day default of payment. 
We were sure to do due diligence with a reputable lawyer before going ahead. 

This is exactly, how I at first thought it would be done. Transfer of deed to my wife, and he would then hold a debt claim towards us, with the property as collateral.

 

7 hours ago, Pmbkk said:

 

If it doesn't feel right( too many ifs and buts that can't be answered) - it isn't.

 

Stop now and stop wasting time and effort.

So far I have gotten very informative answers to all my questions.

If nothing else, this is a great learning experience for me, how real estate transactions are done here, and which pitfalls there can be.

[MadMuhammad]

28 minutes ago, Beck1976 said:

 

This is exactly, how I at first thought it would be done. Transfer of deed to my wife, and he would then hold a debt claim towards us, with the property as collateral.

 

 

the vendor was hesitant at first but with a bit of persistence they went through with the name charge. As always polite but firm with any negotiating. Good luck 

[chrisandsu]

Taking financial advise from people who put their home in their wife’s name wouldn’t be my go to . 

[Beck1976]

On 2/13/2021 at 12:21 AM, MadMuhammad said:

I recently purchased a property under ‘owner finance’

We paid a 3mil deposit on a 5mil property (discounted from 6.5). We attended the land office and the chanote was registered in my wife’s name with the finance stipulation recorded on the back. We also signed a contract that laid out the finance, 30K a month over 3 years with 3-5% interest and a final payment of 1.08mil and loss of rights with 60 day default of payment. 
We were sure to do due diligence with a reputable lawyer before going ahead. 

So after some talk back and forth with the seller, we came to an agreement.

Downpayment now, monthly installments for a year, at which point, we pay out the mortgage he has, and the chanote is transferred to my wifes name. After that we would still pay 50 monthly installments.

I found the risk acceptable this way.

 

The plan was to have his lawyer draw up a contract, I would then run it by my guy, just to make sure everything was ok.

 

We had a quick meeting with them, and despite knowing nothing about our financials, his lawyer was afraid, we wouldnt be able to make the payments. The seller had no concerns about it at all.

However, we have now been noticed, that according to his lawyer, it simply cant be done this way. That the chanote cant be transferred untill all payments are done. Not that the lawyer advised against it, but simply "cannot make such contract!"

 

I find that odd? It is a simple payment plan, with amounts and dates for both payments and transfer of ownership all determined and agreed upon.

 

Are there any actual reason why such a contract cant be made?

 

Or is it just the lawyer, who is either making up his own rules or advising the seller against it, and the seller then presents it as a rule?

[chrisandsu]

6 hours ago, Beck1976 said:

So after some talk back and forth with the seller, we came to an agreement.

Downpayment now, monthly installments for a year, at which point, we pay out the mortgage he has, and the chanote is transferred to my wifes name. After that we would still pay 50 monthly installments.

I found the risk acceptable this way.

 

The plan was to have his lawyer draw up a contract, I would then run it by my guy, just to make sure everything was ok.

 

We had a quick meeting with them, and despite knowing nothing about our financials, his lawyer was afraid, we wouldnt be able to make the payments. The seller had no concerns about it at all.

However, we have now been noticed, that according to his lawyer, it simply cant be done this way. That the chanote cant be transferred untill all payments are done. Not that the lawyer advised against it, but simply "cannot make such contract!"

 

I find that odd? It is a simple payment plan, with amounts and dates for both payments and transfer of ownership all determined and agreed upon.

 

Are there any actual reason why such a contract cant be made?

 

Or is it just the lawyer, who is either making up his own rules or advising the seller against it, and the seller then presents it as a rule?

I don’t understand why you wouldn’t get the wife to get a loan from the bank ? The banks are as shady as the west and will give anyone with a pulse a loan as long as money is going in and out of their bank . 

[Beck1976]

7 minutes ago, chrisandsu said:

I don’t understand why you wouldn’t get the wife to get a loan from the bank ? The banks are as shady as the west and will give anyone with a pulse a loan as long as money is going in and out of their bank . 

She have had extremely low activity on her account for several years, so not an option.

 

Furthermore, big difference between paying off the house in interest-free installments over 5 years, compared to borrowing the entire sum, and paying interest to the bank,

But for future reference, are you saying, that as long as money is coming in and going out, she could be eligible for a loan, despite not holding a job (and therefore no pay-slips etc)? So I could send her 50.000 every month, she would withdraw it over the course of the month, use it for our regular expenses, and then repeat every month, and then she would qualify?

 

[chrisandsu]

14 minutes ago, Beck1976 said:

She have had extremely low activity on her account for several years, so not an option.

 

Furthermore, big difference between paying off the house in interest-free installments over 5 years, compared to borrowing the entire sum, and paying interest to the bank,

But for future reference, are you saying, that as long as money is coming in and going out, she could be eligible for a loan, despite not holding a job (and therefore no pay-slips etc)? So I could send her 50.000 every month, she would withdraw it over the course of the month, use it for our regular expenses, and then repeat every month, and then she would qualify?

 

The mortgage companies are starving right now . Go to them and give it a shot . Tell them you will be the guarantor (not that that means much in Thai law ) but they will see a possibility of it being paid . If the bank does give you a loan make sure there is no penalty for early repayment .

Edited February 22, 2021 by chrisandsu

[MadMuhammad]

On 2/22/2021 at 3:23 PM, Beck1976 said:

So after some talk back and forth with the seller, we came to an agreement.

Downpayment now, monthly installments for a year, at which point, we pay out the mortgage he has, and the chanote is transferred to my wifes name. After that we would still pay 50 monthly installments.

I found the risk acceptable this way.

 

The plan was to have his lawyer draw up a contract, I would then run it by my guy, just to make sure everything was ok.

 

We had a quick meeting with them, and despite knowing nothing about our financials, his lawyer was afraid, we wouldnt be able to make the payments. The seller had no concerns about it at all.

However, we have now been noticed, that according to his lawyer, it simply cant be done this way. That the chanote cant be transferred untill all payments are done. Not that the lawyer advised against it, but simply "cannot make such contract!"

 

I find that odd? It is a simple payment plan, with amounts and dates for both payments and transfer of ownership all determined and agreed upon.

 

Are there any actual reason why such a contract cant be made?

 

Or is it just the lawyer, who is either making up his own rules or advising the seller against it, and the seller then presents it as a rule?

when we initially agreed to buy we made a 100000 baht deposit with the agreement to be finalise ‘subject to finance’. Our loan was rejected due to 60 baht outstanding on my wife’s credit card from 2 years previous (they were fully paid out by me). Even after being denied the seller was still happy to continue with their financing of the purchase. 
We had them draw up a contract of which we had checked by our lawyers and we also made quite a few changes ourselves to mitigate our risk and then checked once more. 
After we got the ho ahead we drew up a repayment plan so everyone could easily understand the agreement and had all documents witnesses and signed by both husband and wife vendor and myself and my wife. 
One would think the denial of finance would be a concern but there was a 30 day late payment clause added to the contract which gives the vendor full rights to the property should we default.  Everyone walked away happy and comfortable 

[beet man]

If you do buy it rent it on your name . You can do that for 30 years so she can not kick you out like so many others have done. BE SMART.