What To Offer On A Ff Condo?

[texanaust]

Ok, I'm new to the Thai property market, but not new to real estate. I am planning on purchasing an older resale foreign freehold condo between 6-9 million baht probably in Pattaya or nearby. My question is what sort of offers do people put in on places in Thailand? I.e. How much lower than the asking price does the average place go for?

In the USA, its pretty easy to find out market prices, what the place sold for previously, and what has sold recently. I am going to predict that there is no such resource in Thailand except for word of mouth. Here in the USA, 10% is pretty common and most home sellers pad their price accordingly. Of course since the housing crisis, people have been willing to accept a lot more than 10% off their asking price just to get rid of their place.

How about Thailand? Obviously I know that I can lowball and see what happens, but I'd be interested about real-life experiences. Thanks in advance for any advice.

[Khun Jean]

Having real estate experience in your own country does not help much in Thailand.

It works very differently here, so much so that you will be amazed, angry, insulted, flabbergasted etc with what you will experience.

If you not spent a decent amount of time in a certain area, you will know as good as nothing and will be considered a 'newbie' and ridiculous prices will be asked.

The only way to know what realistic prices are is doing the footwork. Most what you see on internet is not what you will find in real life. Internet is mostly for the lazy ones and with too much money and too little sense.

I suggest to only use it to get familiar with buildings, pictures can help but many times they were taken when everything still looked nice.

Time is on your side, so use it to get familiar and knowledgeable about what is for sale, which areas are good, how quick something sells etc.

Do not be worried you will miss a good deal. There will be more even better deals waiting for you.

One of the 'tricks' is to go rent a unit in a building you like, get friendly with the guard/management. Also with guards/management from other buildings you studied and liked.

Then wait for an opportunity.

Good luck.

Edited January 26, 2013 by Khun Jean

[USNret]

The prices asked online seem to be pretty random, based on the sellers mood but little else. As stated above, you will find no rhyme or reason to the asking price. Therefore, a fixed idea of a 10% reduced counter-offer is also random and you would likely end up paying too much.

The best way I can think of to manage this is get familiar with the price-per-square-meter of new condos in the area. Do a lot of legwork, until you understand the value range per square meter for upscale and more basic models. This will give you a sense of the going price. Also learn what sort of promotions impact these asking prices for new homes.

Armed with that knowledge gives you a starting point. The other big consideration is that -- from all I have learned on TV -- the resale market in Thailand is very weak. People, esp Thai, don't seem to want to buy "used" condos. For this reason, any seller would be lucky to have you talking to him. For a foreigner selling a condo, their big fear & expectation is that they won't be able to find a buyer at any price.

Use this to your advantage. With price-per-meter as you TOP end, start working down from there. I would go maybe 20-25% below that to see how desperate the seller is. It has no bearing on the asking price; it is just based on the square footage adjusted for amenities of the particular property. Don't be too attached to any one property. Try this with 5 or 6 properties; one of them will bite, and you'll have yourself a good deal. In the end, you will buy from some who is just glad to get anything at all to recover their losses.

Just my opinion; YMMV.

[BlackPuddingBertha]

It works very differently here, so much so that you will be amazed, angry, insulted, flabbergasted etc with what you will experience.

Very true.

I would say that Pattaya has two sorts of condo seller: the ones looking to make a large profit (or cover a previous large loss) from a pigeon and the ones who actually want/need to sell.

The latter group will probably settle for 30-50% less than than the asking price of the former group. As far as I'm concerned these prices are the real ones and everything else is just fantasy. There is a lot of fantasy in Pattaya and I think there may be some very unhappy people around as all these new builds get near completion.

[PattayaPhom]

There's a lot of fantasy posted on here also. If the op wants a bargain then he must realise when he wants to sell the boot is on the other foot. However if he is prepared to pay for a condo that is in high demand and a waiting list of buyers he will pay the asking price

[BlackPuddingBertha]

If the op wants a bargain then he must realise when he wants to sell the boot is on the other foot.

As long as he paid a sensible price in the first place this will not be a problem. He will be able to sell for a similar price quite easily, just as one does in farangland. The problem here is that most asking prices are not sensible. Not even close to being sensible in fact. Pattaya really is a vast Ponzi scheme where yesterday's pigeon is desperately seeking today's so that he can be bailed out.

However if he is prepared to pay for a condo that is in high demand and a waiting list of buyers he will pay the asking price

Ah. I would be interested in knowing where this fantastically desirable condo is? I would also be interested in knowing why, if it is really so desirable with a waiting list of buyers, the owner just wouldn't bump the asking price up even higher?

Where I come from desirable properties are sold at auction, with lots of interested bidders. Here the only "desirable" properties attracting much interest are the ones that have been discounted down by 40% because the owner is dead/dying/going home/getting divorced/in jail/on his uppers etc.

[PattayaPhom]

Quite a few in Baan Amphur,

[BlackPuddingBertha]

Yes, in amongst a lot of rubbish there are a couple of nice buildings in Baan Amphur that dont come up very often. But that's going quite a long way from town to find something desirable.

[ballbreaker]

OP offer below what your willing to pay and if countered or rejected you have room to play.

The price range you picked should have many sellers but few buyers so your in the driver seat.

Remember property is only worth what someone is willing to pay.

[PattayaPhom]

I'd like to know where the older resale rubbish at ops price is?

[texanaust]

Thanks for all the replies. I'm sort of thinking along the lines of USNret, but the problem is that the sqm values of new projects are all over the place making comparison hard. I am looking for something fairly large and there are not very many condos in Pattaya being built new that are large. The large new condos (130sqm and up) have astronomical sqm pricing compared to the newer studio, one bdrm stuff.

Like I mentioned, I won't be buying new, but probably in a complex anywhere from 5-15 years old. From what I understand, older condos are not as popular (especially with thais) and therefore do not command as high a price per sqm. So what sqm price do you put on these buildings? Specifically I am looking at South Pattaya along/near the beach down as far as Baan Amphur.

[PattayaPhom]

Location? Facilities, view and quality all have an effect on prices hence the large margin. Thais do like established condos in s good location. If you think 40,000 Baht Sqm for 135 sqm well kept established condo 30 Meters from Central Jomtien Beach is expensive then you may need to rethink where you want to stat

[ballbreaker]

OP don't get wrapped up in price per sqm because they are all over the ballpark as you have found out. I would be more concerned with how well the building is being maintained and size of unit for the price.

Only buy something you really like regardless of how much time it takes to find.

[Pukehina1]

Good points raised above as to purchasing both new and second hand but when looking at new developments make sure you do due diligence on the developer as there are lots of broken dreams created by some of these less honourable people who are criminals in their own country but amazing what an international flight and some creative marketing and voila the pig in a poke has been remodelled and the consequences of being ripped off are well documented here in Pattaya.

[trogers]

How much you should pay will also be hinged on your reason for buying - speculation, investment or self-occupation?

[rgs2001uk]

It works very differently here, so much so that you will be amazed, angry, insulted, flabbergasted etc with what you will experience.

Very true.

I would say that Pattaya has two sorts of condo seller: the ones looking to make a large profit (or cover a previous large loss) from a pigeon and the ones who actually want/need to sell.

The latter group will probably settle for 30-50% less than than the asking price of the former group. As far as I'm concerned these prices are the real ones and everything else is just fantasy. There is a lot of fantasy in Pattaya and I think there may be some very unhappy people around as all these new builds get near completion.

Seeing as we have at least one involved in the real estate game posting here, I wont need to name the building he will know it.

A building not so far from Jamesons, 100 sq/m 2 bedroom condo, why on the interent are the prices listed from 5 to 7.5 million.

Are the ones listed at 5 million those looking for a quick sale from the true price of 7.5, or are the ones asking 7.5 just dreaming?

[BlackPuddingBertha]

A building not so far from Jamesons, 100 sq/m 2 bedroom condo, why on the interent are the prices listed from 5 to 7.5 million.

Are the ones listed at 5 million those looking for a quick sale from the true price of 7.5, or are the ones asking 7.5 just dreaming?

It could be that. It could also be that the expensive ones have a nice view and are in farang name whereas the cheap ones have no view and are in company name. Or maybe the cheap ones are next to a karaoke bar.

One would need to have a bit more detail about the individual places to be able to tell which.

[Khun Jean]

Seeing as we have at least one involved in the real estate game posting here, I wont need to name the building he will know it.

A building not so far from Jamesons, 100 sq/m 2 bedroom condo, why on the interent are the prices listed from 5 to 7.5 million.

Are the ones listed at 5 million those looking for a quick sale from the true price of 7.5, or are the ones asking 7.5 just dreaming?

Maybe the one posting for 5 million is dreaming and the one from 7.5 million is out of his mind.

It is very hard to tell, the only thing to go by is what is currently selling and how fast.

HIgh season is always the time for higher prices, never know if you catch one fresh from the plane.

[texanaust]

The problem is how do you find out what is selling and for what? BTW, I am purchasing to live in which is why I want a larger place in an older building. I do not want to wait for a new condo and see if my building lives up to the fake "artist impressions" that are posted on every real estate website. The other thing I cannot understand is why some completed buildings still have these "artist impressions" as their main photos. It makes you wonder if the finished product just didn't live up to expectations...

[trogers]

The other thing I cannot understand is why some completed buildings still have these "artist impressions" as their main photos. It makes you wonder if the finished product just didn't live up to expectations...

Probably because many of the units under the Thai quota have not yet been sold.

[BlackPuddingBertha]

The problem is how do you find out what is selling and for what?

That's simple: you can't. I've long believed that an official database report of property sales/prices from Land Offices as is available in many developed countries would make fascinating reading here.

[JomtienEats]

I would say that Pattaya has two sorts of condo seller: the ones looking to make a large profit (or cover a previous large loss) from a pigeon and the ones who actually want/need to sell.

Have to agree. Many of the listed properties are not really for sale in the sense the owner would accept a near-market price offer. Some owners take the view that having the property listed at an inflated price helps to influence sales in nearby properties upwards as real sellers and buyers look at other listed properties for guidance on price. There's always a small chance they'll achieve the asking price, but my experience is that the more unrealistic the price is, the less the owner is interested in facilitating viewing. Also noticed that this is more often the practice on Farang owned properties on Farang oriented websites.

[ironbark]

I hare looked at buying several times and each time decided against it.

The reasons have all been given here already, but in summary

1. It is really difficult to tell what the true market price is. Generally the price depends on the vendors opinion of theprospective buyer. (Is he a rich pigeon or a poor pensioner)

2. Thais don't like to buy second hand apartments so the resale market is Much smaller.

3. Thais are prepared to bargain but don't make them lose face by being overly critical of the price or condition and then offer a very low figure. Be apologetic and humble for your low offer.

One point not mentioned is building codes & other legal essentials are often not kosher' make sure everythingis legal and in order and then check again.

almost every week I read about another developer that has skipped through after a shady or illegal development.

[texanaust]

I would say that Pattaya has two sorts of condo seller: the ones looking to make a large profit (or cover a previous large loss) from a pigeon and the ones who actually want/need to sell.

Have to agree. Many of the listed properties are not really for sale in the sense the owner would accept a near-market price offer. Some owners take the view that having the property listed at an inflated price helps to influence sales in nearby properties upwards as real sellers and buyers look at other listed properties for guidance on price. There's always a small chance they'll achieve the asking price, but my experience is that the more unrealistic the price is, the less the owner is interested in facilitating viewing. Also noticed that this is more often the practice on Farang owned properties on Farang oriented websites.

Why would owners of inflated price condos want to help influence sales in nearby properties if they do not have a vested interest in said project? I also do not understand why Farang owned properties would be more unrealistic in pricing. I would have thought (perhaps incorrectly) that Farang condo resales would be the best buys. Foreigners need to get out for whatever reason and lower their price to meet the market; Thais hold on because they have no reason to sell unless they make a profitable return.

[BlackPuddingBertha]

Why would owners of inflated price condos want to help influence sales in nearby properties if they do not have a vested interest in said project?

Because it generally talks up the prices. The more ads there are for higher prices, the more the ignorant will be prepared to pay.

This is what is known as a bubble.

I also do not understand why Farang owned properties would be more unrealistic in pricing. I would have thought (perhaps incorrectly) that Farang condo resales would be the best buys. Foreigners need to get out for whatever reason and lower their price to meet the market; Thais hold on because they have no reason to sell unless they make a profitable return.

Go back and read my initial comment which explains the two types of farang vendor. You quoted it in your own message.

[texanaust]

Here is the criteria again: Foreign Freehold condo in not new building. Pattaya south to Ban Ampur, close to or on the beach, larger than 120sqm, min 2bd/2ba.

From my research, under Thb 40,000 per sqm seems like it is approaching fair market value. This is generally for a used condo that appears to be in good condition, renovated and (in some cases) selling fully furnished. Am I still too high or are places in the sub Thb 40,000/sqm becoming decent deals?

[ballbreaker]

I also do not understand why Farang owned properties would be more unrealistic in pricing. I would have thought (perhaps incorrectly) that Farang condo resales would be the best buys. Foreigners need to get out for whatever reason and lower their price to meet the market; Thais hold on because they have no reason to sell unless they make a profitable return.

Texanaust are you aware of the foreign ownership quota of 49 percent? Foreign buyers have a desire to purchase a condo that can be registered in their name not some smoke and mirrors Thai company name so sellers feel it adds value if condo already foreign owned.

[twr404]

The problem is how do you find out what is selling and for what?

That's simple: you can't. I've long believed that an official database report of property sales/prices from Land Offices as is available in many developed countries would make fascinating reading here.

Even if it was available to the public, the information would be useless. Most sale prices on the second hand market are report far below the actual amount to avoid taxes. For example, a unit is sold for 5 million, but report to the land department as sold for 3 million and now only have to pay taxes on the 3 million. I am not say this is right. It is just what I have come across in conversations and real estate dealings.

A Zillow or Trulia for Thailand would be so useful for sellers and buyers but where would they get the real info needed to build a database of actual sales prices?

[farang000999]

It is not that difficult guys.

The easiest trick is to get an idea what the unit you want to buy would cost to rent. while, "for sale" prices may be all over the place, rental prices are much more realistic, unless they are being advertised solely towards farang. Someone might be floating selling their condo for an exorbitant price but trying that with a rental would lead to vacancy and it is very easy to compare rental prices, even in the same building their will be multiple owners renting and you surely have a zillion friends who know what it costs to rent. also, tons of buildings that rent that do not have any BS dual pricing system and have prices on the wall in the office on a map... send a thai if u r paranoid.

anyways, once you have the rental price, you know what the buy price is.

REMEMBER THE VALUE OF REAL ESTATE IS ALWAYS LOGICALLY BASED ON THE RENTAL PRICE...

Edited February 3, 2013 by farang000999

[farang000999]

just read what i wrote over and over again until it sinks in...