Buying a condo apartment - How to handle paying a deposit, or transferring insufficient funds?

[thaitanic]

I am struggling to understand how to comply with the rule, as I understand it, that funds for a condominium apartment purchase by a foreigner must be transferred in a single payment from overseas.

 

Scenario A: Imagine I find an apartment in a condominium for 10 million Baht. I make arrangements to have the money sent from overseas IN ONE 10 million Baht TRANSFER, to comply with the rules. The transfer will take one week to reach my Thailand account and be available. But the seller wants a 10% deposit sooner than that and I have enough cash for that already in my Thailand account. How can I pay the deposit and still be within the rules of transferring/paying in one payment? Would I still have to transfer the full 10 million despite paying the 1 million deposit? Or would I get a refund of the deposit? What is the normal procedure?

 

Scenario B: I transfer 10 million Baht to buy an apartment in a condominium but it turns out the apartment I want is 11 million. Do I have to send the money back and bring it in as a single 11 million Baht transfer?

 

 

[Salerno]

37 minutes ago, thaitanic said:

as I understand it, that funds for a condominium apartment purchase by a foreigner must be transferred in a single payment from overseas.

Can be multiple transactions.

[soi3eddie]

I bought my Bangkok condo in 2009 for 6 Million THB. Paid a deposit of 5% by my UK credit card. I then transferred the full purchase price to my lawyer's Thai client account in GBP (with a little extra to cover costs and exchange rate fluctuation) from my UK bank. Very important is to get the "purpose of transfer" correctly noted. Normally "for purchase of... (add full unit info and address of the property you are buying)". You will need to show this document to Lane Department to transfer ownership to your name. Some say it is not necessary to show full address but for avoidance of issues with Land Department I put full property address and info. The extra money to cover deposit amount was used to pay lawyer's fees, taxes and to furnish my condo. I would try to get deposit amount reduced to 5% if I was you as there's few buyers in the market right now. As for your scenario B, then you would be OK if you simply put as reason of transfer "To purchase Condominium" and hope that Land Department will just accept that.

   

[scubascuba3]

A deposit is just to prevent you from changing your mind, you don't have to pay one, could offer a lower amount if you want to, say 50k. If something dodgy comes to light during the transaction you may want to cancel. Deposits aren't refundable, that's the idea. Alternatively don't pay a deposit until you've done your checks.

 

Check your thai bank branch can include more than one transaction for the land office letter, usually it's fine.

 

Remember the transfer needs to be done correctly so it's processed as "International"

[Gottfrid]

No there is no rule or law that state your transfer must be in one piece. However, most people find it more easy.

It´s very important that you sign the purpose for the transfer/transfers and always best if they are made to a lawyer that handles your business.

Most sellers will ask for a deposit, whish is only used to reserve the condo for you. It´s up to you to pay. If only one condo left I would recommend paying deposit when asked for. If they have a lot of condos, then just wait and pay every thing at the day of purchase.

[Charlie]

This is how I bought my Condo in Bangkok. The S & P was 6.5 million Baht. I paid all the "DEPOSITS", and a few months by instalments, and whatever in THAI BAHT. Finally, when everything was ready, I sent the Developer the "Full Amount" as stated in the S & P. With that full amount as stated in the S & P, the Land Dept will issue me the "Title Deed" (Chanote). After all that, the Developer will "Return Me All The Balance" which I had paid earlier.  The issue here is this. The Land Dept is only interested that the Full Amount of the S & P must come from your home country. You Don't need a lawyer to do all this - unless you buy from a Private Owner. The "Rule of Thumb" : The LAND DEPT is not interested on how you pay the Developer. The Land Dept will only issue you the "Title Deed" (Chanote) if you can show proof that the Full Amount as stated in the S & P must come from your HOME COUNTRY. Please take note.
 

[Charlie]

Additional Info. The Full Amount sent to the Developer in the S & P must be in your NAME and for the Purpose of Buying “The Name Of The Condo”. This is most important. Please take note. Khap Phom.

[Peterw42]

As others have said, it can be multiple transactions and deposits, over any amount of time. So long as it adds up to the land office price for the property. 

Often what is paid for a property and the amount declared to the land office is not the same amount. you only need to show funds for the land office price.

 

[newnative]

5 hours ago, scubascuba3 said:

A deposit is just to prevent you from changing your mind, you don't have to pay one, could offer a lower amount if you want to, say 50k. If something dodgy comes to light during the transaction you may want to cancel. Deposits aren't refundable, that's the idea. Alternatively don't pay a deposit until you've done your checks.

 

Check your thai bank branch can include more than one transaction for the land office letter, usually it's fine.

 

Remember the transfer needs to be done correctly so it's processed as "International"

    It's not quite correct to say deposits aren't refundable.  A contract can have any terms the buyer and seller want in it, as long as both parties agree to it.  Most contracts will have a clause that states the buyer will be refunded his deposit if the seller does not, for any reason, go through with the sale, for example.   

    I agree that, unless things have changed, you can use more than 1 international money transfer for the condo purchase.   I know several times I put together 3 or 4 wire transfers to do a purchase.

[Harveyboy]

11 hours ago, Salerno said:

Can be multiple transactions.

paid for mine in 4 seperate payments no probs

[scubascuba3]

3 hours ago, newnative said:

    It's not quite correct to say deposits aren't refundable.  A contract can have any terms the buyer and seller want in it, as long as both parties agree to it.  Most contracts will have a clause that states the buyer will be refunded his deposit if the seller does not, for any reason, go through with the sale, for example.   

    I agree that, unless things have changed, you can use more than 1 international money transfer for the condo purchase.   I know several times I put together 3 or 4 wire transfers to do a purchase.

Yeah so in your example deposit is refundable only if seller doesn't go through with it, so therefore not refundable if buyer does a U turn, so better not to pay it

[lkn]

9 hours ago, Gottfrid said:

It´s very important that you sign the purpose for the transfer/transfers and always best if they are made to a lawyer that handles your business.

There is no such requirement, and I did not state any purpose of the more than a dozen USD/EUR transfers that collectively made up the sum I used to buy my condo.

 

And I would strongly recommend you do *not* transfer to an account not in your name, because *then* you do risk getting into problems, as your Thai bank can’t give you a letter stating you have imported x million baht into the country, because, technically you didn’t, you sent them to someone else.

[thaitanic]

Thank you all very much for your replies. That's really helpful.

 

Not too keen on trusting a developer "returning me all the balance" if I can avoid it. I think I'll try and avoid paying a deposit and just pay in one go, unless I feel a place has a lot of competition for it or I find my ultimate, unique, dream home that I can't afford to lose. I should be able to get the funds over here in a week or so.

 

What is "S & P" (apart from  a restaurant chain that does nice salmon over rice)?

[Gottfrid]

2 hours ago, lkn said:

There is no such requirement, and I did not state any purpose of the more than a dozen USD/EUR transfers that collectively made up the sum I used to buy my condo.

 

And I would strongly recommend you do *not* transfer to an account not in your name, because *then* you do risk getting into problems, as your Thai bank can’t give you a letter stating you have imported x million baht into the country, because, technically you didn’t, you sent them to someone else.

Where did I say it was a requirement? I said that it is important, as it generally makes things more easy and smooth. I am sure it is possible without, as you state you did. Never said it was impossible without. What I also said is that you will benefit from letting a lawyer handle the business. Why not? If you are buying a condo for 2,5 - 10 million baht, how much will a little bit of lawyer fee hurt you?

 

And then again, I strongly advise you the read before you post. Never posted it was a requirement.

[DefaultName]

I bought last year - not 10m though! - paid the deposit from funds already here, then transferred in more than the full purchase price.  That way the "it came from overseas" paper from the bank showed enough ฿.  I had no problems - used a solicitor of course, I don't have the money to risk anything going wrong.

[lkn]

1 hour ago, Gottfrid said:

Where did I say it was a requirement? I said that it is important, as it generally makes things more easy and smooth. I am sure it is possible without, as you state you did. Never said it was impossible without. What I also said is that you will benefit from letting a lawyer handle the business. Why not? If you are buying a condo for 2,5 - 10 million baht, how much will a little bit of lawyer fee hurt you?

Requirement or “very important” (as you wrote): It should be neither. Is this for the bank (to issue letter) or Land Office?

 

You are not the first to repeat this belief, but I just don’t see where it would matter. The banks I have used don’t even show the subject line on any of my statements, but even if they did, you don’t give the Land Office a bank statement or transfer slip, you give them a letter from the bank, or a FET form provided by the bank (yes, I have been through the process, so speaking from experience, subject line never came up).

 

Regarding lawyer, up to you if you want to hire a lawyer, what I said was that it is important you transfer the money to an account in your name, as your comment read as if you suggest transferring money to the lawyer’s account.

 

If you transfer to a third party, maybe you can salvage it, if the transfer states the exact purpose of the transfer, and that is why there is this myth that the purpose must be stated.

 

But just transfer the money to an account in the name that you want on the title deed.

[Gottfrid]

4 minutes ago, lkn said:

Requirement or “very important” (as you wrote): It should be neither. Is this for the bank (to issue letter) or Land Office?

 

You are not the first to repeat this belief, but I just don’t see where it would matter. The banks I have used don’t even show the subject line on any of my statements, but even if they did, you don’t give the Land Office a bank statement or transfer slip, you give them a letter from the bank, or a FET form provided by the bank (yes, I have been through the process, so speaking from experience, subject line never came up).

 

Regarding lawyer, up to you if you want to hire a lawyer, what I said was that it is important you transfer the money to an account in your name, as your comment read as if you suggest transferring money to the lawyer’s account.

 

If you transfer to a third party, maybe you can salvage it, if the transfer states the exact purpose of the transfer, and that is why there is this myth that the purpose must be stated.

 

But just transfer the money to an account in the name that you want on the title deed.

I have been trough the process to as I deal with real estate in Thailand. Never mind go on with your life. I was giving recommendations to the OP, not to you.

[lkn]

10 minutes ago, Gottfrid said:

I have been trough the process to as I deal with real estate in Thailand. Never mind go on with your life. I was giving recommendations to the OP, not to you.

Why so hostile?

 

I asked where the subject line would matter, and this is your reply?

 

But I strongly disagree with your recommendation of transferring money to a third party, this is bad advice, as we all know, the buyer should be the one to import foreign currency, and this is trivial to attest, if foreign currency was deposited to the buyer’s bank account.

 

Banks do not receive enough information to uniquely identify the sender, so I would be very surprised if they are willing to issue any letter stating who the money were *from*. Think about it, it would allow a double-spend: If you send me money to my account in Thailand, I can get a document stating you sent these money, and I can get one, saying I received these money, now we have two documents based on the same money transfer.

 

That said, I don’t say it is impossible for e.g. a property lawyer to receive money from abroad, and get his claim/document accepted by the Land Office, But you are taking an unnecessary risk by doing it this way.

[Gottfrid]

1 hour ago, lkn said:

Why so hostile?

 

I asked where the subject line would matter, and this is your reply?

 

But I strongly disagree with your recommendation of transferring money to a third party, this is bad advice, as we all know, the buyer should be the one to import foreign currency, and this is trivial to attest, if foreign currency was deposited to the buyer’s bank account.

 

Banks do not receive enough information to uniquely identify the sender, so I would be very surprised if they are willing to issue any letter stating who the money were *from*. Think about it, it would allow a double-spend: If you send me money to my account in Thailand, I can get a document stating you sent these money, and I can get one, saying I received these money, now we have two documents based on the same money transfer.

 

That said, I don’t say it is impossible for e.g. a property lawyer to receive money from abroad, and get his claim/document accepted by the Land Office, But you are taking an unnecessary risk by doing it this way.

bla...bla...bla.....

[ababidoo]

From my experience

 

When I decided to buy a condo, I transferred a sum of money to my bank account in Thailand, and later I found a better and more expensive apartment, so I made a second transfer, and what I think is important is that the bank to which I transferred the money will send you a form to explain the reason for the transfer and it must be the reason for the transfer (to buy a property)

[YT3k72Em]

On 10/11/2021 at 3:23 PM, Charlie said:

if you can show proof that the Full Amount as stated in the S & P must come from your HOME COUNTRY. Please take note.

This is not correct. It needn't be your home country (however that is defined). It can be from any country or multiple countries. As long as it comes in as foreign currency.

[thaitanic]

Thanks again for the replies.

 

A 1st follow-up question... Am I right to think that the funds have to be transferred in the foreign currency, which means I will have to use my overseas bank and not a currency exchange service such as Wise etc.?

 

A 2nd follow-up question... After the funds have arrived in my Thai bank and I have my FET, what is the usual method of actually transferring the cash from my Thai bank account to the seller's bank account? An electronic transfer? A cheque from my bank with the seller's name on it? A cash cheque from my bank with no name on it? A suitcase full of notes? And at what exact point does that actually happen? As a condo-purchasing virgin I have visions of a) a scary, paranoid journey from the bank to the land office with a cash cheque in my underpants, and b) a comical 3-2-1 countdown at the land office before exchanging cash/paperwork/keys.

[couchpotato]

21 minutes ago, thaitanic said:

Thanks again for the replies.

 

A 1st follow-up question... Am I right to think that the funds have to be transferred in the foreign currency, which means I will have to use my overseas bank and not a currency exchange service such as Wise etc.?

 

A 2nd follow-up question... After the funds have arrived in my Thai bank and I have my FET, what is the usual method of actually transferring the cash from my Thai bank account to the seller's bank account? An electronic transfer? A cheque from my bank with the seller's name on it? A cash cheque from my bank with no name on it? A suitcase full of notes? And at what exact point does that actually happen? As a condo-purchasing virgin I have visions of a) a scary, paranoid journey from the bank to the land office with a cash cheque in my underpants, and b) a comical 3-2-1 countdown at the land office before exchanging cash/paperwork/keys.

With the type of questions you are asking, you really shouldn't be buying anything.

Naivety like this can be very problematic....

[lkn]

30 minutes ago, thaitanic said:

A 1st follow-up question... Am I right to think that the funds have to be transferred in the foreign currency, which means I will have to use my overseas bank and not a currency exchange service such as Wise etc.?

Must be from abroad, yes. But when you transfer more than a million, Thai banks tend to give you a pretty good exchange rate, in fact, I am quite sure that I have gotten better rates than what Wise offered for many large transactions.

 

32 minutes ago, thaitanic said:

A 2nd follow-up question... After the funds have arrived in my Thai bank and I have my FET, what is the usual method of actually transferring the cash from my Thai bank account to the seller's bank account?

You get a cheque from your bank and then you go with the seller to the Land Office where the cheque will be exchanged for adding your name to the title deed.

[thaitanic]

2 minutes ago, couchpotato said:

With the type of questions you are asking, you really shouldn't be buying anything.

Naivety like this can be very problematic....

Yes I'm naive because I have never bought a condo here before. It would be more naive to just wade into a purchase, trusting everyone, without doing my research into the process (I'm sure it wouldn't really be a case of carrying a suitcase of cash and doing a countdown). So please educate me.

[thaitanic]

2 minutes ago, lkn said:

....You get a cheque from your bank and then you go with the seller to the Land Office where the cheque will be exchanged for adding your name to the title deed.

Thank you. And does that cheque bear the seller's name? If we don't have a written agreement, what happens to that money if the seller pulls out at the last minute and doesn't accept the cheque? Or is it normal/essential to have a written agreement in advance of visiting the Land Office?

[soi3eddie]

29 minutes ago, thaitanic said:

Yes I'm naive because I have never bought a condo here before. It would be more naive to just wade into a purchase, trusting everyone, without doing my research into the process (I'm sure it wouldn't really be a case of carrying a suitcase of cash and doing a countdown). So please educate me.

I advise you to get a good, reliable and trustworthy lawyer to assist and advise you. Property purchase for foreigners has many potential pitfalls in Thailand. I would not conduct a property transaction without professional help. I have completed two condo purchases and a land purchase for my then wife (since ex). 

 

[lkn]

28 minutes ago, thaitanic said:

If we don't have a written agreement, what happens to that money if the seller pulls out at the last minute and doesn't accept the cheque?

Then you go back to your bank with the cheque and get it refunded. It should btw be a cashier’s cheque, but your bank will probably know this, if you tell them it is for property purchase. And ask the seller what he wants as payee.

[thaitanic]

2 minutes ago, soi3eddie said:

I advise you to get a good, reliable and trustworthy lawyer to assist and advise you. Property purchase for foreigners has many potential pitfalls in Thailand. I would not conduct a property transaction without professional help. I have completed two condo purchases and a land purchase for my then wife (since ex). 

 

Thank you. I did ask for recommendations on another thread but unfortunately did not get any. So I have little to judge "good, reliable and trustworthy" by. My experience of lawyers so far in Thailand (1 small time lawyer in Phuket and 1 big western name in Bangkok, neither on property issues) has been absolutely terrible.

[lkn]

5 minutes ago, soi3eddie said:

I advise you to get a good, reliable and trustworthy lawyer to assist and advise you. Property purchase for foreigners has many potential pitfalls in Thailand. I would not conduct a property transaction without professional help. I have completed two condo purchases and a land purchase for my then wife (since ex). 

Any example where your lawyer provided assistance that made him worth his fee?

 

There are pitfalls, but I would rather focus on a) the building/condo itself (i.e. with someone who is knowledge about construction, plumbing, electricity, and the typical problems in Thai condos), b) the building’s finances, and c) how well the committee and general meetings work.