Housing Prices

[Jimbo]

I work for a real estate developer and we also deal with the sponsor in question. They are absolutely right about the point that they get a lot less then 10%. I know the market well and 10% or anything near that I have never encountered.

[LivinLOS]

Never ???

I know many 'agents' who would think nothing of inflating an undervalued plot or exploiting a keen buyer by 10% or more in collaboration with the seller. Industry norm no (3 - 5) but never ?? Well..

[Jimbo]

Never ???

I know many 'agents' who would think nothing of inflating an undervalued plot or exploiting a keen buyer by 10% or more in collaboration with the seller. Industry norm no (3 - 5) but never ?? Well..

If you are looking at new developments such as Layan Gardens, Ocean Breeze, Luna then I dare say that the developers not pay anything close to 10%. If you are selling a piece of land or reselling your home then of course you might have a certain agreement with a real estate agent that could be 10% comm. however with brand new developments I have never seem 10% comm. paid.

[Abrak]

Talking of commissions.

I am looking to sell my place (as I am building a new one).

I expected estate agents commissions to be of the order of 3% with some discount (bear in mind on my property this works out in excess of US$60,000).

Surprise, surprise agents are asking up to 5% which in the age of the internet seems ridiculous. Asking them to justify these prices doesnt seem to get you too far.

Given the number of useless farangs running round the island calling themselves property dealers you would think the business would be more competitive.

[Zpete]

I have read so much in this site.

My wish would be to go and live in Phuket.

The land business is so confuzzling.

Possibly just leasing a property could be a solution,. as an old codger.......LOL.

Then at my age, why bother buying, just lease my home and use the proceeds to live on Phuket.

Mite be worth investigating next year when I return.

We will see.

[LivinginKata]

I know a private owner advertising in the Gazette for 3 million. A supposed buyer calls round, takes many photos, then admits he has a real estate office, says that he is going to post nice pics up on his company web site for 3.3 million. He takes the 300 K and the 3 million to the owner. I've actually viewed his web site, and the 3.3 million price. That sure seems like 10%. And pleeeze, nobody justify because of high business overheads. IT'S STILL 10% ...

[Jimbo]

Talking of commissions.

I am looking to sell my place (as I am building a new one).

I expected estate agents commissions to be of the order of 3% with some discount (bear in mind on my property this works out in excess of US$60,000).

Surprise, surprise agents are asking up to 5% which in the age of the internet seems ridiculous. Asking them to justify these prices doesnt seem to get you too far.

Given the number of useless farangs running round the island calling themselves property dealers you would think the business would be more competitive.

Abrak is correct about the level of comm. which are in line what is being paid by real estate developers as well on new projects. Generally the real estate market is broken up in price brackets and the higher the price bracket then lower the comm. percentage that is paid. A 5 million THB home or condo would fall under 4-5% comm. whilst If you were selling a 20 Million THB + home then it would be around 2.5%

Edited December 3, 2007 by Jimbo

[Jimbo]

I know a private owner advertising in the Gazette for 3 million. A supposed buyer calls round, takes many photos, then admits he has a real estate office, says that he is going to post nice pics up on his company web site for 3.3 million. He takes the 300 K and the 3 million to the owner. I've actually viewed his web site, and the 3.3 million price. That sure seems like 10%. And pleeeze, nobody justify because of high business overheads. IT'S STILL 10% ...

There is a difference in between an agent getting a certain comm. percentage off the official published sales price (for example a new project) which Siam Real Estate does for example and some real estate guy seeing a home for sale and putting in on his site with his own mark up. This is not an industry standard comm. but rather a real estate guy doing his own mark up.

[LivinLOS]

I know a private owner advertising in the Gazette for 3 million. A supposed buyer calls round, takes many photos, then admits he has a real estate office, says that he is going to post nice pics up on his company web site for 3.3 million. He takes the 300 K and the 3 million to the owner. I've actually viewed his web site, and the 3.3 million price. That sure seems like 10%. And pleeeze, nobody justify because of high business overheads. IT'S STILL 10% ...

There is a difference in between an agent getting a certain comm. percentage off the official published sales price (for example a new project) which Siam Real Estate does for example and some real estate guy seeing a home for sale and putting in on his site with his own mark up. This is not an industry standard comm. but rather a real estate guy doing his own mark up.

Call it what you like but it happens all the time on Phuket and I would say is far more the norm than an exception when you count all the 100's of amateurs calling themselves agents. Only a post or two you had never heard of it happening, I am not in the biz and I see it, so I have to now doubt all you say.

[Jimbo]

LivingLos, as I wrote in my previous post: "with brand new developments I have never seen 10% comm. paid." My statement is correct and check with any real estate developer. For members to post incorrect information and especially those not even involved in the business is not fair. You can doubt what I say but I know I stand correct with my statements.

[LivinginKata]

Ha Ha, we really have these guys wriggling on a stick, trying to justify agent prices. The folks trying to broker rental contracts (I know, getting off topic) are the worst. They all demand 10%, and the first year all up front. I had to laugh a one potential rentor coming round with a Thai agent. Agent quickly speaks to my wife in Thai to arrange her cut. We agree, and we just add the 10% to our normal price. A few days later the same potential rentor comes with an entourage of 3 agents from different offices, AND THEY EACH WANTED 10%. I politely told then all that I was dealing with none of them, and bade the lot of them goodbye.

[Jimbo]

LivingKata I am in no way trying to justify any agent prices. All I tried to say that with new developments such as in the Laguna area the develop offers a lot less then 10% to real estate agents. Of course if you were to contact the developer directly without the use of a real estate agent then you could try to negotiate a discount on the basis that the developer does not have to pay any agent but this fee lies in between 2-5% and not in the 10% region. This is the way things work with brand new projects as the developers publish the prices through their own websites and advertising so real estate agents cant mark up above these prices.

[Abrak]

BY the way is everyone talking like with like here.

In my experience if you are renting your house the rental agent will take a minimum of 10% for his efforts and as much as 25% if he is providing concierge services. Rental agent fees of 10% are of course very different from sales agent fees of 2-5%.

[LivinginKata]

BY the way is everyone talking like with like here.

I aready apologised for going off the purchase topic.....

And it amuses me that some folks continue to wriggle .... I'm taking about second market, private sales, on 3 - 5 million baht range. Give it up, you have all made your points based on mid to high end properties.

[Abrak]

Well Livinginkata your 10% figure for a Bt3-5m house doesnt totally shock me. That is Bt500k commission at the top end.

I am being asked for a minimum of 4% on a Bt70m house which is Bt2.8m bottom end - and to be honest there is not a lot of difference in the work required in selling the two.

I think both rates are outrageous...

[Iolare]

The twist in this thread into the area of commissions is an interesting one to me, too. I’ve been here almost a year now, so I’m new and still learning, but but I’ve always been a real estate investor, and even had a real estate business for awhile in the US, so I come to the table with some background experience. There we worked mostly under exclusive agency contracts in which the sales office had an exclusive right to offer the property for sale for a set period of time. The deal was that you would advertise and market the property for the entire listing period until it sold or the listing expired. It was all pretty cut and dried--if the property sold a commission was earned.

But this is Thailand and everything is different. First of all, anyone can be an agent. If you mention that you’re in the market to buy property to anyone--be it your street food vender, haircutter, yard maintenance guy, or your maid, that will start a chain of people that will lead to someone who has property for sale. Everyone in the chain no matter how long it becomes will have a hand out when time comes to pay the commission,. It’s amusing to witness that resolution conclave at a closing, as I have.

On one piece we bought, our offer came back with a counter offer 250,000 baht higher, which we discovered was just the middlemen trying to get a bigger slice of the pie; our original offer never was presented to the seller. I’ve since learned that it is common practice to get a land owner to commit to a price that he would be satisfied with, then for the middlemen to re-price it to the farang buyer at a price even in excess of a 10% premium. Back in the US that is called double escrowing, and has been illegal for quite awhile. So it really is a swashbuckling business here.

I think expat businessmen in the real estate business here have to be plugged into this informal system of Thai finders and land men. And the alliance between the expat and the Thai network is tenuous at best. Several times when we were out looking at property, my wife (who speaks Thai)has been taken aside and slipped a phone contact number and told to call back later for a better price. Or if we’ve gone back ourselves for a second look, and we’ve been spotted by the locals, same thing--no loyalty to the farang salesman.

So without exclusive listings, many web sites will have the same property shown, but beyond that, it’s probably not worthwhile to spend much money marketing a property. When I’ve called about a property listed on a web site , usually the salesman will have to call the owner or the Thai land man to see if it’s still available. Almost 50% of the time for whatever reason, it’s not available to be shown.

So I think it’s a tough business for an expat real estate salesman here, and I admire those who can make it work. It’s also a treacherous market for a novice buyer, so if an experienced agent actuallly guides someone through the entire process successfully, that is rendering a worthwhile service.

[LivinLOS]

LivingLos, as I wrote in my previous post: "with brand new developments I have never seen 10% comm. paid." My statement is correct and check with any real estate developer. For members to post incorrect information and especially those not even involved in the business is not fair. You can doubt what I say but I know I stand correct with my statements.

However thats not what you initially said is it ?? what you said was...

I work for a real estate developer and we also deal with the sponsor in question. They are absolutely right about the point that they get a lot less then 10%. I know the market well and 10% or anything near that I have never encountered.

If you know the market so well you will also know thats complete bullshit.. On many transactions, bare land sales, aftermarket resales, etc the shady amateur ragtag collection of people that call themselves 'agents' can and do often dream up whatever number or slices they can hope to get away with. I even know 'agents' who would find a cheap large plot, lay a 10% for 1 year option on it, subdivide and attempt to spin that out into profits in the 100% and up range, youve never heard of this ?? Knowing the market so well ??

The fact you later attempt to qualify your statement to mean only new new build, new developer segment of the market does nothing to change the fact that the quoted statement is not the reality I have seen.

[tom yum goong]

I think expat businessmen in the real estate business here have to be plugged into this informal system of Thai finders and land men.

this is the main problem when looking to buy land, particularly larger plots here in Phuket. its very rare that you will ever get to deal directly with the owner. usually there will be a number of middle men, relatives etc. who all want their cut.

[LivinginKata]

[

this is the main problem when looking to buy land, particularly larger plots here in Phuket. its very rare that you will ever get to deal directly with the owner. usually there will be a number of middle men, relatives etc. who all want their cut.

It is possible to buy direct if you have a diligent Thai wife keeping her ear to the ground. For a farang doing it alone, then no chance of buying at the true cost price. Too too many middle people, with their fingers in the pie.

A very good tip is to find land in the hands of a bank taht has secured a loan. Then you deal with the bank and can be sure that the bank has comprehensively checked out the land title and value. Payment for the land is made directly to the bank, to clear the loan, and the bank deals with transfer at the land office, accompanied by the sellor and the buyer.

[DanBlack]

Overall, very good advice. Thanks. I get the impression getting a fairly good deal on a piece of good property is/will be a good investment.

Though I wish I could stop hearing that stupid advice of not buying what you're not willing to lose. It is only an excuse for people who do not invest here.

Its not a casino.

[LivinLOS]

Its not a casino.

No it isnt.. The odds are much harder to accurately calculate !!

Never, ever, forget the big three rules.

Thailand is for Thais.

Dont bring into Thailand more than you can afford to lose.

Dont be worth more dead than alive.

[LivinginKata]

Thailand is for Thais.

So why do you live in Thailand.....

[DanBlack]

Its not a casino.

No it isnt.. The odds are much harder to accurately calculate !!

Never, ever, forget the big three rules.

Thailand is for Thais.

Dont bring into Thailand more than you can afford to lose.

Dont be worth more dead than alive.

There's that advice again.

It's great in theory, but what do you think I will do if I lose everything here? Jump on my plane and go back to one of my other houses in Canada

[LivinLOS]

Thailand is for Thais.

So why do you live in Thailand.....

Because I find I can balance out that I will remain a second class citizen with less rights and protections with money.. With that money I can attain a nice standard of living in a climate I like.

But I dont for one second think I will ever be anything other than a second class citizen.

[LivinLOS]

Its not a casino.

No it isnt.. The odds are much harder to accurately calculate !!

Never, ever, forget the big three rules.

Thailand is for Thais.

Dont bring into Thailand more than you can afford to lose.

Dont be worth more dead than alive.

There's that advice again.

It's great in theory, but what do you think I will do if I lose everything here? Jump on my plane and go back to one of my other houses in Canada

So what your saying is you can afford to lose it.. So there you are problem solved.

[LivinginKata]

Because I find I can balance out that I will remain a second class citizen with less rights and protections with money.. With that money I can attain a nice standard of living in a climate I like.

But I dont for one second think I will ever be anything other than a second class citizen.

What a sad ******* speciman of a life form you prove yourself up to be

[Sir Burr]

^

Sometimes the truth isn't PC. I agree with LivinLOS.

[taxin]

[

this is the main problem when looking to buy land, particularly larger plots here in Phuket. its very rare that you will ever get to deal directly with the owner. usually there will be a number of middle men, relatives etc. who all want their cut.

It is possible to buy direct if you have a diligent Thai wife keeping her ear to the ground. For a farang doing it alone, then no chance of buying at the true cost price. Too too many middle people, with their fingers in the pie.

ha ha ! Not always the case, a mate of mine in Udon just put a swimming pool in his resort, which is a resort that his Thai wife "helped" him build, he thinks the swimming pool cost 700,000 baht, it was actually only 400,000 baht !

The Thai wife banked 280,000 baht and gave the swimming pool company 20,000 baht for supplying her with an inflated invoice ! She then bragged about it to the neighbors how she had made a nice profit !

All he needed to do in order to find out the real price was to get a few quotations, but of course, why do that when you have a Thai wife !?

[LivinLOS]

Because I find I can balance out that I will remain a second class citizen with less rights and protections with money.. With that money I can attain a nice standard of living in a climate I like.

But I dont for one second think I will ever be anything other than a second class citizen.

What a sad ******* speciman of a life form you prove yourself up to be

Nice to see Thaivisa's rules of flaming and insults are applied equally as usual.

^

Sometimes the truth isn't PC. I agree with LivinLOS.

I gave up being PC a long long time ago..

[traveldog]

Dan,

I have been searching for property in Phuket for years....both vacant land and house/land. Every land piece and house was either unaffordable or undesirable..I have strict requirements-and limited budget...... unfortunately-ha ha! Anyway, finally found a decent little house on a tiny plot right in the neighborhood I was hoping for!! bought it...ok in the wife's name of course...and yeah sure it's a risk but I got tired of my rental...and wanted our place...dealt with the owners direct through my wife...I speak and understand thai...but never do in such situations. It was a fairly basic negotiations done in very polite language....we got a small discount and even though a second buyer later over bid our offer they honored ours as it was first.....anyway I think we did pretty well price wise compared to similar in the area..in fact very well. The whole process was quite pleasant and surprisingly straightforward.

If you have found vacant land you can afford and where you desire to live I think that is the best option as you can design build what you want...but there are a few headaches with building as you know from reading here and talking to others-good luck! Where are prices heading??? Well lots of people have opinions and that's about alll that can be said it's just an opinion. I think (here's my opinion) Phuket has many many many flaws...but for me and apparently many others the charms still outweigh those flaws. There are places/options for all kinds of people to want to visit/live the Phuket lifestyle and I think that will be the case for quite some time....and to me that is why long term anyway the prices will appreciate. Short term...and here we are really in the unknown territory there could be a modest drop(I have waited for this for years too!!!!) if there is a serious world financial upheaval....but who knows? Not me? If you aren't in any hurry or you haven't found the right spot....I might wait....but if you find the right spot...well gee I did and there you have it...

I find that saying...."Don't invest in Thailand more than you can afford to lose"....a bit overworked....but sadly it is true for many and maybe the majority of Thai/Farang relationships. My advice to any and all is to invest the time in finding the right mate.....it took me years and lots of experience to finally find the right lady. In some ways I got very very lucky....but also I knew what to look for and what to avoid. I think a lot of the more sad relationships involve people who really never matched...in every possible way and of course that is true the world over. It's also true in many respects that farangs are treated differently than Thais....some good some bad...and you need to balance your investments risks wisely- I keep the majority of my savings/investments off shore as well. To be honest I have lost far more money with scheming lying farangs than Thai but that is just my experience.

Anyway sorry to blather on good luck to all in your house hunting.