New Condo, Question About Price

[IsaanUSA]

There are a ton of new condo developments that have recently opened or opening soon. I see a lot of 1 bedroom units around 40 sq meters, 120 meters from the BTS for around 3 million Baht.

How negotiable is that? Can I make an offer of 2.2 million and tell them to keep the free iphone? Or should I be happy with a 100k discount?

I assume it matters how many years it has been vacant and how desperate they are to make the sale?

[PattayaPhom]

You want 800k off the price in return for not receiving a 20k iphone....why not ask the seller, good luck!

[IsaanUSA]

No, I'm asking ThaiVisa how the normal negotiation process goes on a new condo.

[Delight]

No, I'm asking ThaiVisa how the normal negotiation process goes on a new condo.

The process of buying is a skill that goes back thousands of years.

Those with the better buying skills get the best deals.

The weakest sellers are those that are most desperate to sell.

You have to do research over time to find them.

If I were buying now I would employ the services of an agent –ideally a friend that I can trust.

That agent would have limited authority. He can agree a sale but only up to a financial limit that I specify. The seller has to be aware of this limitation.

This puts pressure on the seller to make a decision.

Even if the deal is not accepted –the process at least will give you information.

I will be acting as an agent next year. The condo (new) has been on the market for about 2 years. The asking price is 5 m . I have authority for 2.5 m max.

If you are dealing with a salesman he will have very limited authority to discount. In such circumstances you have to find a higher authority..

If you cannot reach this higher authority -then bid via an independent agency. The boss there will have access to the higher authority.

If you fall in love with your potential purchase-chances are you will pay too much.

Edited December 21, 2012 by Delight

[CMTourist]

How can it have been vacant years if its a new development or opening soon?

[rgs2001uk]

No, I'm asking ThaiVisa how the normal negotiation process goes on a new condo.

The process of buying is a skill that goes back thousands of years.

Those with the better buying skills get the best deals.

The weakest sellers are those that are most desperate to sell.

You have to do research over time to find them.

If I were buying now I would employ the services of an agent –ideally a friend that I can trust.

That agent would have limited authority. He can agree a sale but only up to a financial limit that I specify. The seller has to be aware of this limitation.

This puts pressure on the seller to make a decision.

Even if the deal is not accepted –the process at least will give you information.

I will be acting as an agent next year. The condo (new) has been on the market for about 2 years. The asking price is 5 m . I have authority for 2.5 m max.

If you are dealing with a salesman he will have very limited authority to discount. In such circumstances you have to find a higher authority..

If you cannot reach this higher authority -then bid via an independent agency. The boss there will have access to the higher authority.

If you fall in love with your potential purchase-chances are you will pay too much.

I will be acting as an agent next year. The condo (new) has been on the market for about 2 years. The asking price is 5 m . I have authority for 2.5 m max.

An agent for who, the seller or a potential buyer?

[Delight]

No, I'm asking ThaiVisa how the normal negotiation process goes on a new condo.

The process of buying is a skill that goes back thousands of years.

Those with the better buying skills get the best deals.

The weakest sellers are those that are most desperate to sell.

You have to do research over time to find them.

If I were buying now I would employ the services of an agent –ideally a friend that I can trust.

That agent would have limited authority. He can agree a sale but only up to a financial limit that I specify. The seller has to be aware of this limitation.

This puts pressure on the seller to make a decision.

Even if the deal is not accepted –the process at least will give you information.

I will be acting as an agent next year. The condo (new) has been on the market for about 2 years. The asking price is 5 m . I have authority for 2.5 m max.

If you are dealing with a salesman he will have very limited authority to discount. In such circumstances you have to find a higher authority..

If you cannot reach this higher authority -then bid via an independent agency. The boss there will have access to the higher authority.

If you fall in love with your potential purchase-chances are you will pay too much.

I will be acting as an agent next year. The condo (new) has been on the market for about 2 years. The asking price is 5 m . I have authority for 2.5 m max.

An agent for who, the seller or a potential buyer?

The Buyer

Different Tactics if I represent the seller

[IsaanUSA]

How can it have been vacant years if its a new development or opening soon?

No demand. Nobody bought it. Building is 80% sold.

[BlackPuddingBertha]

No demand. Nobody bought it. Building is 80% sold.

VT5D in Jomtien is significantly unsold over 5 years after it was completed, as are VT3, VT7 and VT8.

Q) The reason?

A) The prices are too high.

Q) Why doesn't the developer drop the price in order to sell them and move on, rather than incur unnecessary expenses every day?

A) This is Thailand and they are bonkers.

Probably the same applies in Bangkok.

[IsaanUSA]

Probably the same applies in Bangkok.

Yeah, that's why I was asking to see what kind of wiggle room exists. It sounds like I need to talk to my real estate agent to get a better idea. I just wasn't sure if we are talking 100k or several hundred thousand.

I suppose if there were two units left they would be eager to make a deal for the simple fact that they could then close down the sales office and get rid of the 8 people working in the sales office.

[BlackPuddingBertha]

Have you considered resales?

Individual owners may be more flexible, depending on their circumstances.

[sotsira]

No demand. Nobody bought it. Building is 80% sold.

VT5D in Jomtien is significantly unsold over 5 years after it was completed, as are VT3, VT7 and VT8.

Q) The reason?

A) The prices are too high.

Q) Why doesn't the developer drop the price in order to sell them and move on, rather than incur unnecessary expenses every day?

A) This is Thailand and they are bonkers.

Probably the same applies in Bangkok.

The main reason why these condominiums you mention are only partly sold is because once the 49% foreign quoter

sold out (bear in mind that this happened within 3 months of completion) the remaining 51% can only be purchased by Thai

nationals or company ownership.

Only VT 7 i believe is still under 49% sold and i would agree that the price of that one is too high,

but all the others sold out the 49% within months of completion as the prices were much lower too.

[sotsira]

Probably the same applies in Bangkok.

Yeah, that's why I was asking to see what kind of wiggle room exists. It sounds like I need to talk to my real estate agent to get a better idea. I just wasn't sure if we are talking 100k or several hundred thousand.

I suppose if there were two units left they would be eager to make a deal for the simple fact that they could then close down the sales office and get rid of the 8 people working in the sales office.

If your real estate agent is selling new projects, then he will be representing the developer to gain a commission, therefore you won't

get a true representation from them as a buyer.

You would be better off going straight to the developer's sales office and negotiating directly with them, the agent is just a middle man

which in effect will cost you money!

[sotsira]

I would also add that new condominium developments will always remain 30-40% unsold

unless the 49% law is abolished.

Why?

Because Thai nationals prefer to buy houses which are far better value for their money,

and foreigners are reluctant to buy under company ownership.

[IsaanUSA]

Interesting points sotsira, thanks.

But what do you mean the agent would be representing the developer? They have nothing to do with each other. The agent would be representing me (in my belief) and also his real estate company. Wouldn't the sales people be representing the developer?

[BlackPuddingBertha]

But what do you mean the agent would be representing the developer?

In Pattaya agents receive anything up to 8% or more as commission on new build sales. So they dont represent the buyer at all.

I suspect the same applies in Bangkok.

You can save money by approaching the developer directly, assuming that there isnt a sole agent appointed to the building.

[BlackPuddingBertha]

The main reason why these condominiums you mention are only partly sold is because once the 49% foreign quoter

sold out (bear in mind that this happened within 3 months of completion) the remaining 51% can only be purchased by Thai

nationals or company ownership.

Only VT 7 i believe is still under 49% sold and i would agree that the price of that one is too high,

but all the others sold out the 49% within months of completion as the prices were much lower too.

Many buildings do sell out the Thai quota (just look at VT1 and VT2, right across the road, not to mention the new condo buildings that are targeted mainly at Thais in the first place) so I dont think the quota argument is the real reason. The real reason is simply that the prices are too high for both Thais and for farangs who are prepared to buy in company name. (And of course this tends to prove that farangs who buy in the farang quota in these buildings are also paying over the odds.)

Many Thais have bought in Thai quota in Pattaya in order to let the units out to farangs, but they arent doing it much in VT5D (or 3 or 7 or 8) for reasons of cost.

(The last I heard VT8 still has farang quota units available, as does 7, though as you mention, 5 and 3 dont.)

Get the price right and anything will sell, and anything that doesnt sell just has to be overpriced.

[IsaanUSA]

But what do you mean the agent would be representing the developer?

In Pattaya agents receive anything up to 8% or more as commission on new build sales. So they dont represent the buyer at all.

I suspect the same applies in Bangkok.

You can save money by approaching the developer directly, assuming that there isnt a sole agent appointed to the building.

I see. Thanks.

The agent told me that if I bought a place that all the legal work, paperwork, etc is included in the price. So if I went in on my own and purchased a place, I imagine I would have to pay extra for all the legalwork, etc?

[krisb]

100k discount is alot in Thailand.

[BlackPuddingBertha]

The agent told me that if I bought a place that all the legal work, paperwork, etc is included in the price. So if I went in on my own and purchased a place, I imagine I would have to pay extra for all the legalwork, etc?

I would expect the developer to pay for this, regardless of how you buy or how much you pay. Of course you might want to get your own legal advice separately (checking the contract etc) and you would have to pay for this yourself in any event.

[Delight]

If your real estate agent is selling new projects, then he will be representing the developer to gain a commission, therefore you won't

get a true representation from them as a buyer.

You would be better off going straight to the developer's sales office and negotiating directly with them, the agent is just a middle man

which in effect will cost you money!

Your statements sound logical. It however does not reflect potential circumstances.

You state: If your real estate agent is selling new projects, then he will be representing the developer to gain a commission

This is a contradiction in terms . The fact is that the agent does not represent the developer –he represents himself.

If a developer is seen to allow one salesmen to offer high discounts –then all his salesmen will expect that same right.

A deal with an agent can be more covert.

The agent does not care too much if the price is low. It barely affects his commission earnings.

The agent just wants the sale at any price. Therefore it is easier to haggle with an agent.

It all down to his(the agent) skill with the developer and the general state of overall sales activity.

Also , if it goes via an agent then the developer does not pay salesmen commission.

A shrewd buyer can exploit this circumstance to his advantage. Typically the buyer is in a stronger position if he has the bulk of the money to pay up –front. (special conditions apply)

The buyer must always be prepared to walk away from a deal.

Edited December 22, 2012 by Delight

[sotsira]

My point was to explain that when buying new condo projects it isn't necessary to use an agent,

when you can buy directly from the developers sales office.

An agent will charge a commission on the sale and therefore either the buyer will pay a higher price to

cover this or the seller will include this in the sale price, either way someone will pay for this.

Also, IsaanUSA,

If you buy a new condo from the developer, you must ask whether the purchase will be put in your name

as the owner, and not a company owned purchased, as this will reflect the possible resale value.

All legal paperwork is usually conducted by the developer also in the sale price, but always ask for any other

hidden extras.

[BlackPuddingBertha]

If you buy a new condo from the developer, you must ask whether the purchase will be put in your name

as the owner, and not a company owned purchased, as this will reflect the possible resale value.

It's well known that the bulk of units sold in Pattaya in the better-located buildings are bought by farangs, either in farang quota or in company name or via some Thai spouse etc. As a result of this the farang quota in these better buildings often sells out long before the Thai quota does, though the Thai quota will often sell out sooner or later, as previously discussed.

I'm just wondering to what extent the farang quota would be sold out in these "40sqm/3MB/near the BTS" buildings that seem to abound in Bangkok. Hard to imagine that there are so many working farangs prepared to live in small units like that in a big city, and equally hard to imagine that many farangs would want to own a condo like that for holiday use in Bangkok either. It's not exactly a seaside resort and most tourists seem to just spend a couple of days there to see the sights before going to somewhere nicer.

I suspect that most of these buildings have far more Thai buyers than farang buyers at that price level, and that as a result the farang quota may not be an issue at all in them.

[Delight]

Sotsira states;

it isn't necessary to use an agent,

when you can buy directly from the developers sales office.

I agree

I’m simply suggesting that in some circumstances it can be beneficial for the buyer to use an agent. The personal in a typical Thai developers sales office will not do the deal , if it means going beyond their terms of reference with respect to discounts. An agent has no such inhibitions

The key is the fact that the deal is ‘covert;

Sotsira states;

An agent will charge a commission on the sale and therefore either the buyer will pay a higher price to

cover this or the seller will include this in the sale price, either way someone will pay for this

The agent does not ,as a far as I know ,charge commission to the buyer directly.

Edited December 22, 2012 by Delight