1 Million Down Payment & Then The Balance Intrest Free ?

[diggerdo]

I have just seen an advertisement on a reputable estate agents website of a property for sale for 7 million baht, it then goes on to say 'Finance available, 1 Million baht move in, balance interest free'.

How do schemes like this work, surely there must be a catch or is this just a really good deal ?

In my experience if it sounds too good to be true ..............

[David48]

Someting is missing ...

Finance available, 1 Million baht move in, balance interest free

How long is the interest free period?

If it's up to 6 months it maybe absorbed by the developer.

I own Quality Home Shares QH:TB listed on the SET (Stock Exchange of Thailand)

In their recent documents they report working on a 30% profit margin.

If it's a longer period, the interest component is probably built into the loan and you are paying the interest up-front as part of the purchase price. It would have been a discount that you might have been able to get if you had haggled enough.

Or ... if the finance is arranged through one of their 'friendly' lenders, there maybe an initial interest free period after which you are slugged with a higher the otherwise commercially available interest rate and the initial unpaid interest is clawed back over time as you are locked into the loan for an extended period.

Just 3 reasons why ... amongst others.

Want to know more about

Fish Farms or a simple Australian Visa Application ?

[David48]

... or they could just be having a slow day.

[PattayaPhom]

Many people bought or developed properties and they just can sell them, 1. they are in a bad location miles from anything. 2. They are asking too much....they drop the prices but still nobody is interested, so they offer finance which will then appeal to a wider market. ..There isnt anything dodgy but ask yourself, if the current owner is struggling to sell, more than likely you will have the same problem in the future if you wish to move...

[Darrel]

"'Finance available, 1 Million baht move in, balance interest free'.

..... surely there must be a catch ..... "

Of course there is. The asking price is way over the top and they cant sell it at that price to anyone with cash in the bank (ie anyone with a brain).

[Soutpeel]

"property for sale for 7 million baht"

and the catch is.....the property in reality is only worth 5 million...

Edited May 28, 2012 by Soutpeel

[yoshiwara]

Some developers tell you an apartment is such a good investment that they are prepared to guarantee the monthly rental payments for a period of two years. Discounting for the moment the difficulty of enforcing such an agreement if the company reneges on the agreement, if one adds up such payments you may find that they total the equivalent of a discount on the asking price.

[Darrel]

Some developers tell you an apartment is such a good investment that they are prepared to guarantee the monthly rental payments for a period of two years. Discounting for the moment the difficulty of enforcing such an agreement if the company reneges on the agreement, if one adds up such payments you may find that they total the equivalent of a discount on the asking price.

This is certainly true. There are several big agencies in Pattaya currently promoting rental guarantee nonsense and from what I can make out they are all selling the same guy's units. The guy will do the management (for a fee) taking care of repairs via his own tradesmen (also for a fee) and there is no specific indication of the duration of the rental guarantee anyway.

I wouldn't touch this with a bargepole.

[london]

Any developer that guarantees you a fixed period of rental income, be it 1 year or 2 years at "x" % is indicating that they can't sell the units. Its THAT simple.

Why else offer that "incentive" ?

The fact is that this supposed "return" is already incorporated into the price. YOU are paying for it.

Darrel is 100% correct: don't touch it with a bargepole.

[chiang mai]

And of course, ownership of the title will likely not pass to the buyer until all outstanding sums have been paid, I personally wouldn't take that risk alone, whatever the true value of the property.