Buying Repossessed Land From A Bank

[Sophon]

We are looking to buy 1-3 rai of land up north (Lampang or Chiang Mai) to build a house on, and are considering maybe buying repossessed land from a bank. Since we don't have any experience with this, it naturally brings up some questions:

1. The bank's websites don't always mention what kind of title the land has, but having been accepted as collateral by the bank I assume that all plots will be either Chanote or Nor Sor 3 Gor. Am I assuming too much? Also, is there any significant practical difference between owning land with these two title types?

Obviously, before actually buying any land we will confirm the title type.

2. How firm do you think the sales prices posted by the banks are? I realize that this will vary from bank to bank and for different land plots, but some of the banks have already discounted some of the plots with up to 30-45% which leads me to believe that similar discounts might also be possible on some of the not yet discounted plots.

3. You can make an offer for a plot of land, and if that offer is less than the posted sales price the bank will take the offer to a committee that will accept or reject your offer. Is there anything preventing you from making a new offer if your original bid is rejected (e.g. first offer = sales price minus 30% and when that is rejected trying for sales price minus 20%)? Any limits to how many times you can bid on the same plot of land?

4. I am assuming that buyer will probably have to pay for any transfer costs. Is that correct, and what kind of costs are we talking about for vacant land (as a rough percentage of the sales price)?

Are there any other pit falls to avoid or advice you can give if buying repossessed land from a bank?

The land will obviously be in my girlfriends name as will the house when we build it (she will be paying part of the cost). She is wellcome to keep both land and house should we split up one day.

Thank you in advance for any information or advice you can give.

Sophon

[dragonfly33]

I am doing the same thing so here are a few points:

1. Some banks, like Krungthai, have sales every few months in which they regularly reduce the price. But you can always make an offer when the sale is not on. IAs far as I understand, you can make offers as many times as you want. In reality, however, it appears that if you are to make too low an offer, the bank will tell you at the very beginning that they will not submit it. But in general, you should be able to get substantial discounts from the listed price. (Note though that some banks operate by auction.)

2. I think the land should be the type of land deeds that you say, but you must ask them.

3. The way bank land sales seem to work is once you buy it the bank is responsible for nothing. You really have to check the place yourself before buying it, preferably more than once. In many cases, the former owner is still living there, and the bank takes no responsibility for having them leave. Also, of course, if the former owner has lots of relatives in the area where you are buying the land they might have a lot of resentment both for the bank and the new owner. If this is the case, best scenario is they will make it impossible for you to live there. Worst is they will kill you.

4. I don't mean to scare you. However, because the responsibility is entirely on you and not the bank, the more you investigate the property before you buy it, the better. The truth is that many of the land for sale come with history and problems. Not all--- but they need serious checking out.

[wayned]

Good advice, I know somebody that bought repossesed land and built a house. All was fine while he was building the house but when it was finished he was informed by his neighbors, with pistols in there belts, that the land that he had been crossing to gain access to his property was theirsand that he could no longer cross it. In the end, after a short legal battle, he was granted acces via a narrow footpath from the road which was about 300 meters away but he would have to park his vehicles in the street.. He never moved in. Of course the neighbors were all relatives of the previous owner and when he didn't move in the previous owner moved in to his new house. True story, it happened in Samui about 8 years ago.

I am doing the same thing so here are a few points:

1. Some banks, like Krungthai, have sales every few months in which they regularly reduce the price. But you can always make an offer when the sale is not on. IAs far as I understand, you can make offers as many times as you want. In reality, however, it appears that if you are to make too low an offer, the bank will tell you at the very beginning that they will not submit it. But in general, you should be able to get substantial discounts from the listed price. (Note though that some banks operate by auction.)

2. I think the land should be the type of land deeds that you say, but you must ask them.

3. The way bank land sales seem to work is once you buy it the bank is responsible for nothing. You really have to check the place yourself before buying it, preferably more than once. In many cases, the former owner is still living there, and the bank takes no responsibility for having them leave. Also, of course, if the former owner has lots of relatives in the area where you are buying the land they might have a lot of resentment both for the bank and the new owner. If this is the case, best scenario is they will make it impossible for you to live there. Worst is they will kill you.

4. I don't mean to scare you. However, because the responsibility is entirely on you and not the bank, the more you investigate the property before you buy it, the better. The truth is that many of the land for sale come with history and problems. Not all--- but they need serious checking out.

[Sophon]

I am doing the same thing so here are a few points:

1. Some banks, like Krungthai, have sales every few months in which they regularly reduce the price. But you can always make an offer when the sale is not on. IAs far as I understand, you can make offers as many times as you want. In reality, however, it appears that if you are to make too low an offer, the bank will tell you at the very beginning that they will not submit it. But in general, you should be able to get substantial discounts from the listed price. (Note though that some banks operate by auction.)

2. I think the land should be the type of land deeds that you say, but you must ask them.

3. The way bank land sales seem to work is once you buy it the bank is responsible for nothing. You really have to check the place yourself before buying it, preferably more than once. In many cases, the former owner is still living there, and the bank takes no responsibility for having them leave. Also, of course, if the former owner has lots of relatives in the area where you are buying the land they might have a lot of resentment both for the bank and the new owner. If this is the case, best scenario is they will make it impossible for you to live there. Worst is they will kill you.

4. I don't mean to scare you. However, because the responsibility is entirely on you and not the bank, the more you investigate the property before you buy it, the better. The truth is that many of the land for sale come with history and problems. Not all--- but they need serious checking out.

Thank you very much for you advice. Once we have a found a plot of land that seems interesting, we will certainly check everything out as thoroughly as possible (road access, electricity, water, internet being some of the most important factors).

I had thought about misplaced possible resentment from the earlier owners, and we do intend to go around talking to the neighbours to get "the lay of the land". But I imagine that this would be more of a problem if buying a repossessed house than when we are talking about empty land. And many of the properties advertised for sale on the bank's websites seems to be projects that have gone bankrupt rather than land from individuals. Thank for the pointer, though.

Sophon