Buying Condo Off Plan

[eddibabyyeah]

Hello,

Apologies, if this question has been answered elsewhere. But I could not find the answer.

I am looking to buy a condo in Thailand. I looked on the English version of the developers website and it says:

30,000 - Reservation deposit is required

12% of property value - Signing fee (payable very 30 days after deposit)

Balance on completion (October 2015)

There are a few other bits to pay and all seem clear.

When I contacted the agent I was told that the reservation deposit is 50K and the signing fee is 30% because I am a foreigner. I asked why, she said this is the law for foreigner. The difference between 30k & 50k is no issue. But I am wondering if the agent is trying it on because I am a falang. Both the agent and developer are well established companies.

Does anyone know if it is indeed the law that a falang has to pay 30% signing fee?

Thanks

Ed

[wym]

Just rent!

Really. . .

[isawasnake]

It does not sound right to me at all, you should pay the same price as advertised. Perhaps this is a bullet dodger. I would do quite a bit of research before buying. I have been recommending LPN developments recently. I am a condo owner, and I have looked at a couple and I really like them. They are well built, well priced, yet they are not always in the best locations. I would classify ananda as a cut or two below them in build quality, but their locations are very nice. I guess it all depends on what you are looking for.

[i claudius]

Buy off plan at your peril ,how many condo blocks here are years behind? I know that the waterfront at Bali Hi was supposec to have been finished and the punters living in it by 2010 at the latest , lucky if its finished in 2016 the way things seem there ,and there are more

Edited January 26, 2014 by i claudius

[gibson123]

It does not sound right to me at all, you should pay the same price as advertised. Perhaps this is a bullet dodger. I would do quite a bit of research before buying. I have been recommending LPN developments recently. I am a condo owner, and I have looked at a couple and I really like them. They are well built, well priced, yet they are not always in the best locations. I would classify ananda as a cut or two below them in build quality, but their locations are very nice. I guess it all depends on what you are looking for.

I have bought in LPN in Naklua and very happy with them, and the area.....However, the project has just completed and now not off plan. I've bought off plan before from a foreign project...and after buying, communication stopped, and as said...the price was different from Thais....i had to sell my condo myself, was not happy with the company at all.....LPN is the same price for Thai and foreign.....sorry for the dot dot dot...my keyboard has a problem with the shift key.....

[isawasnake]

Op could just offer them the Thai fee, and if they say no just walk. I have always thought it was good if you like a condo (or anything), give the people your number, and if they change their mind (ie units are not selling) and they call back, you have got some serious leverage cus you know they need your sale.

On a side note, I find Thais to be some of the hardest people in the world to negotiate with. I have heard Chinese are the best negotiators in the world, but when you deal with Chinese, at least you know slightly what they are thinking. They lowball you and hold out, keep a straight face, you gotta just hang in there and get what you want. It is kinda textbook.... not easy, but one can deal with it. Thais are just totally illogical in my opinion when it comes to negotiating. That same standards do not apply. It is like they would rather lose a sale and profits to save face and not "give in to the farang". I don't know, I find their "negotiating" good at times, but very hard to deal with, which either means they are better than I think, or much worse??

Edited January 26, 2014 by isawasnake

[3NUMBAS]

many who bought of plan get ripped so its not advisable to do this ,anything could happen in the meantime .

[rhodie]

Buy off plan at your peril ,........

+1

Do your homework and be very careful. Good luck.

Edited January 26, 2014 by rhodie

[Bender]

this is a buyer market... you dictate your rules, end of connversation!

Is she is not happy, she can go look desperatly for others customers.

Mostly these people dont have the full budget, so they try to extract as much money from gullible people like you!

[CMTourist]

If you buy from a publicly listed developer its not risky. Buying from a private developer is very risky as you could lose all the money you put down.

The payment of 30% is not a law its a matter for the developer alone.

[isawasnake]

Buy off plan at your peril ,how many condo blocks here are years behind? I know that the waterfront at Bali Hi was supposec to have been finished and the punters living in it by 2010 at the latest , lucky if its finished in 2016 the way things seem there ,and there are more

The contracts actually put the buyer in a nice position when the developer is behind. You're in a position where you can hold it, or get your money back. It is actually nice to have that time to be able to change your mind. That was the situation I was in anyway.

Edited January 26, 2014 by isawasnake

[KittenKong]

"When I contacted the agent I was told that the reservation deposit is 50K and the signing fee is 30% because I am a foreigner. I asked why, she said this is the law for foreigner. The difference between 30k & 50k is no issue. But I am wondering if the agent is trying it on because I am a falang. Both the agent and developer are well established companies."

You have been told a load of <deleted>. You have to bear in mind that when it comes to property in Thailand most people involved in a sale will be lying most of the time, and no one apart from you will ever have your interests at heart.

The contract is what you make it. If you dont like part of it, cross it out and write something you do like. If the developer doesnt like what you wrote, just walk away. There is always another condo building next door so you have nothing at all to lose.

[eddibabyyeah]

Thanks for the advice guys.

The developer is a pretty big company with lots of past and future developments on their portfolio. I know a couple of reputable thai people who have used them before. As for the agent, I don't know.

I think the agent I am dealing with is taking the P1ss out of me because I am not Thai. When I questioned her about the prices, she replied with a couple of sentences in big bold font to make a point. Childish and completely unprofessional. I will tell her that I know nothing of this law and I will pay the advertised price or nothing.

[Langsuan Man]

Are you sure that the salesperson told you that you had to pay more because you were not a Thai or because as a farang you are buying into the farang quota, which is always higher than the Thai quota

[speedtripler]

Thanks for the advice guys.

The developer is a pretty big company with lots of past and future developments on their portfolio. I know a couple of reputable thai people who have used them before. As for the agent, I don't know.

I think the agent I am dealing with is taking the P1ss out of me because I am not Thai. When I questioned her about the prices, she replied with a couple of sentences in big bold font to make a point. Childish and completely unprofessional. I will tell her that I know nothing of this law and I will pay the advertised price or nothing.

have a trusted thai person call or email her about the same property and see if you get the same prices quoted

i always test them to see if im getting the farang tax or thai price on all major purchases

they will try absolutely anything to fleece you if they think you have more money than sense ........

[steveromagnino]

in property negotiation you are either a good negotiator or at the mercy of a good negotiator. People who find Thai developers to be illogical negotiators are probably not great at negotiation and are approaching the transaction with the wrong mindset - illogical means opportunity to find a weird compromise deal. Not taking a low ball price is not illogical obviously BTW.

The usual standard is each developer has their own agreement - in most cases for condos the structure is as you described, with a deposit, a sizeable amount on signing the contract about a month later, and then instalments during construction taking you up to 10-35% depending on the developer. And yes, the developer can use that cash unless you specifically ask (and they agree) to put into escrow which is not common here.

If you are not a resident here, and without a work permit etc, there are some obligations that are a little different when you transfer AFAIK, including the need to show that the cash paid came from abroad via what used to be called a TT3 form/FET form - to HELP you some developers will offer you the opportunity to pay everything in a single lump but usually they will also have some incentive for you to do this e.g. free XXXX or very slight discount. If you are paying up now, then the currency might encourage you to do this now depending on how you believe the THB will move. However, it is uncommon to make you go through with this all in one go just because you are a foreigner - however not unheard of. Obviously, some developers are dealing with a problem that foreigners go AWOL and they cannot easily get in touch with them to force them to pay up - this is a more substantial problem than with Thais, since there are more ways a developer can use to force/encourage an errant local buyer (Thai or person working here) to settle.

The issue of foreigner allocation is something that resort towns deal with and will often have better terms for the Thai quota that they cannot sell; likewise some developers that struggle to sell to Thais for certain developments e.g. Raimon Land at the River might be more strict because 'they can' (example only, I have no idea if they are) or looking in reverse, will offer incentives/discounts to try to get the Thai buyers up to 51% as required by law.

If the agent is CBRE or another big one, chances are the developer has their own ideas of how to deal with foreigners and the agent is just relaying it. If a smaller developer, then who knows. Try contacting the developer directly if they have a website using a different name to see if you can see if it is actual policy.

Needless to say, both sides are looking for a solution. If its under 20m the amount of negotiation room is relatively low unless it's close to completion or they are struggling to sell. Above that, anything is possible. All depends on how you want to negotiate. If you want, feel free to PM me and I can tell you a little more about the specific project and developer if I know them.

[KittenKong]

.... you are buying into the farang quota, which is always higher than the Thai quota

Make that "very often". Not all buildings have a higher list price for farang-quota units.

[KittenKong]

Needless to say, both sides are looking for a solution. If its under 20m the amount of negotiation room is relatively low unless it's close to completion or they are struggling to sell. Above that, anything is possible.

When you have seen 1.3MB off-plan condo units being advertised at "300,000 Baht off today only" as I have, it becomes painfully obvious that there is room for negotiation at all price levels. The agent's commission (often around 8%) is a good place to start, I think.

[aveabeeror2]

Buy off the plan and that could be all your end up with , the plan. Buy established, you end up with a condo. No rocket sience there. (sience ??, spelling police please) Make that "rocket knowledge", no probs. spelling that.

Edited January 28, 2014 by aveabeeror2

[eddibabyyeah]

The usual standard is each developer has their own agreement - in most cases for condos the structure is as you described, with a deposit, a sizeable amount on signing the contract about a month later, and then instalments during construction taking you up to 10-35% depending on the developer. And yes, the developer can use that cash unless you specifically ask (and they agree) to put into escrow which is not common here.

Thanks for the info.

The developer in question is called Sansiri. From what I have read and heard they are a fairly big company. I have read lots of info on the website of the condo development. Basically, its 30K to reserve a unit then 12% on signing and then balance on completion. I was happy with this agreement until the agent told me that because I am farang that its 50K upfront and 30% on signing. When I questioned this, I was told it is the law. Since I questioned the agent she has gone silent and wont answer my questions anymore (very childish, I think). As, I am interested in the development I really dont want one childish agent to put me off. I think my next step is to forward the email directly to the developer and ask for clarification of what I have been told by the agent.

[Aussieroaming]

Mate if your alarm bells are ringing that this could be dodgy, then why proceed? Is the agent you are dealing with the sole agent?

[Cheapman]

Thai will say YES to everything you ask. Ask dumb questions, they will say yes.

How do you want deal with them?

They guys who have been happy here with their purchased condo are happy because their condo are new.

In 5 years. They will change their mind, in 10 years, they won't get nothing except a leaking and stinking room.

Been 5 years in thailand and everyday I hear Horror stories.

Plus we risk a big crisis... Last crisis was in 2008, I would not be surprised if we get a worldwide crisis around this summer.

Best would be to buy gold, bitcoins, and rent.

If you want buy a condo , don't buy these rooms with huge swiming pools with children around.

Buy something which has the look of a hotel.

Edited February 1, 2014 by Cheapman

[robertthebruce]

There is so much New Condos sitting vacant, have a look around and if you see one that suits your needs, go and have a look, and bargain for it, and for sure, you will get it..

as mentioned, Lots sitting empty...

[Neilcnx]

Escrow is coming soon!.

Until you can buy a property off plan using escrow - don't do it. The only law involving condos and foreigners is that foreigners can't own more than 49% of the units in the buidling.

San Siri is a public company. They recently had serious construction issues on a Sukhumvit condo. http://www.bangkokpost.com/news/local/367346/sansiri-faces-heat-over-shoddy-wall-construction

Also, check out this artical from the Post Bangkok Post - Project failures.pdf

[mickjn]

Just rent!

Really. . .

Agree in toto

[eddibabyyeah]

Escrow is coming soon!.

Until you can buy a property off plan using escrow - don't do it. The only law involving condos and foreigners is that foreigners can't own more than 49% of the units in the buidling.

San Siri is a public company. They recently had serious construction issues on a Sukhumvit condo. http://www.bangkokpost.com/news/local/367346/sansiri-faces-heat-over-shoddy-wall-construction

Also, check out this artical from the Post Bangkok Post - Project failures.pdf

What is escrow?

[wym]

A trusted third party holds the buyer's money for the seller until it's confirmed everything's OK.

Will never happen here because the developer needs the customer money to actually build the place - so when there are financial problems it's the end user buyers that are stuck with the problem

[wym]

Very very rare for this to be a good "investment".

If the rent you'd pay is less than 1/15th - to my mind given extra risk, poorer quality in Thailand 1/12th - of the fully loaded costs including maintenance (open-ended on the upside!) you're better off renting and investing in something else + more secure.

And rents here are SO low this will almost always be the case.

[eddibabyyeah]

A trusted third party holds the buyer's money for the seller until it's confirmed everything's OK.

Will never happen here because the developer needs the customer money to actually build the place - so when there are financial problems it's the end user buyers that are stuck with the problem

Thanks.

I guess even a trusted third party may not be that trustworthy for a falang. As we have no rights. If its me against a thai company. I doubt I would win

[Cheapman]

And if there is a change of law in immigration, you may be one day to ask to leave Thailand.

You are not home, you are in a foreign country.

When all condo vacant. Who is going to pay for the swimming pool or holes in the roof?

Have you seen the number of building taking fire due to bad electrical quality.? Do you know why?

Think about karaoke place in front of your window.

Unbalanced fan from neighbour.

Leaking sewage from top neighbour

Lift to maintain

...

Why not rent instead and free your mind? You pay little more but much safer.

200k at 5%=10000$

You can even rent a nice house with that and keep your cash.

Edited February 1, 2014 by Cheapman