Buying Condo Off Plan

[danmarnj]

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 ........

Might be helpful to have a thai attorney that knows real estate in your corner that will look after your interests.

[KittenKong]

As a tax contributor and a contributor to Thai society in general, I think my status is fine. I will have permanent status soon.

Wow. That "permanent" means nothing. Anyone without a Thai passport is here only under sufferance and could be deported at any time without any reason being given, and that includes me. I dont lose any sleep over this because I know that I could just drive to Cambodia and live there, but I dont imagine that Thailand lets me stay here for any reason other than wanting my money. And one day my money may not be enough.

And if they decided to kick me out, I could sell my condo for a nice profit.

Maybe. But what if they decided to kick all the other farangs out with you? Who would buy your condo then and at what price?

From my condo balcony I can see dozens of beach-front condo units that were built over 5 years ago but have never sold because they are in Thai quota and no Thai wants to pay the asking price. So how low would the prices have to go to get Thais interested? I doubt that any Thai would buy my farang-name condo for more than two-thirds of what it last sold for, possibly even less.

[mortenaa]

As a tax contributor and a contributor to Thai society in general, I think my status is fine. I will have permanent status soon.

Wow. That "permanent" means nothing. Anyone without a Thai passport is here only under sufferance and could be deported at any time without any reason being given, and that includes me. I dont lose any sleep over this because I know that I could just drive to Cambodia and live there, but I dont imagine that Thailand lets me stay here for any reason other than wanting my money. And one day my money may not be enough.

And if they decided to kick me out, I could sell my condo for a nice profit.

Maybe. But what if they decided to kick all the other farangs out with you? Who would buy your condo then and at what price?

From my condo balcony I can see dozens of beach-front condo units that were built over 5 years ago but have never sold because they are in Thai quota and no Thai wants to pay the asking price. So how low would the prices have to go to get Thais interested? I doubt that any Thai would buy my farang-name condo for more than two-thirds of what it last sold for, possibly even less.

My goodness.. Another one..

Ofcourse Thais wouldn't buy in a farang village, and neither would I. I live in Bangkok, were most condos aren't close to meet the foreigner-quota.

[F4UCorsair]

Rent!! Rent!! Rent!! Rent!!!

There's a romantic notion about owning property in an exotic location, much of it bought on a whim after a vacation there, and when one buys, it's usually with the intention of holding it for some time, but that isn't always what happens. My bet is it will cost less to rent over five years than to cop the outgoings and holding costs, before any potential loss on sale, and all the ills that go with owning a property. The bonus is that when you rent, you can walk out on a month's notice.

I can't gt rid of the multiple line spacing!

Edited February 4, 2014 by F4UCorsair

[balo]

Never buy off plan !!! I repeat : Never buy off plan!!!!

If you want to buy your own condo please look at the finished buildings , yes I know they will tempt you with cheaper prices buying off plan , ok so maybe you save 300k baht. But the big problem in new condos is the noise ! Not only from your neighbours because the developer use cheap material so you can hear everything happening next door, but also the noise outside , did you ask for a pool view or outside view? I did the big mistake buying off plan , outside view and now I have construction noise and soi dogs barking , karaoke music , can't sleep at night , you name it!

I will sel if I can find a buyer and then I will rent , rent , rent !

Never buy off plan!

[DepDavid]

Balo good advice. There is a lot to consider besides the money.

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[fifthcolumn]

I have only gone in to look at a few new projects but the salesgirls strike me as a huge impediment to sales. My hunch as with the op case, going quiet is that despite this guy being serious about buying, sge does not see her commission and therefore has shut him out.

For my years in Thailand, just knowing the Thai let slone the laws and property markets - renting makes good sense but if you wish to buy, purchase something built and not simply a plan. And yes, Im married to a Thai.

Before anyone buys anything they should google:

Condo bubble Bangkok 2013

and

"One bedroom" condo bubble Bangkok

There must be nearly 50k empty condos in BKK at the moment. Completed and under construction, not incl off plan.

Land is totally overpriced to begin with. Huge parcels of vacsnt land exist in central BKK with other massive amounts of crappy property that could be cleared. Land is held by very few and they trickle it out like the diamond trade.

Remember 1997

Thai's do not like sharing with outsidets. Don't wait around for that Thai passport or ten year visa.

Finally, with the US Fed unwinding, bubble in China (India, Indonesia, Philippines) and huge economic and political problems in Thailand, the thb has nowhere to go but down.

[johninbkk]

I'll give you a tip Eddie,

After you have decided which condo you will buy, then go to a few different agents and ask for a discount on their commission, Yes that's right, to get the business they will cut each others throat.

Happen to me.

Some commissions on these condos are as high as 10%. Do the numbers on your purchase.

[KittenKong]

Ofcourse Thais wouldn't buy in a farang village, and neither would I. I live in Bangkok, were most condos aren't close to meet the foreigner-quota.

Not sure that Jomtien can be described as a "farang village" but either way, it's where I and many other farangs and Thais live. Personally I wouldn't live in Bangkok if you paid me to and from your description many farangs seem to agree with me.

Bangkok seems to me to have an even bigger over-supply of condos than Pattaya does, which doesnt augur well for future prices.

[mogo51]

There is a huge over supply of condos, as advised, buying off the plan is very dangerous and should be travelled carefully.

Many bargains to be had with existing properties from westerners who have been duped by Thai gf and want to go home, try spending time finding them, depending where you are looking - some good advice here for you on this forum. be very careful.

[bobobo]

What You buy is not a condo, what You buy iis a piece of paper....good luck mate.

[Asiantravel]

Why don't you at least wait until you can see the outcome of the current emerging markets instability before making any decision?

One of the mainstays ( or so they keep saying ) of the pattaya condo market ( i.e. Russians ) are now starting to get hit financially and if there are less of them around to buy all these empty condos then I can't see where the demand is going to come from?

http://www.washingtonpost.com/world/europe/ruble-weakens-as-emerging-markets-get-hit-making-russians-wary-of-costly-food-phones/2014/01/25/1d8805a8-85ce-11e3-b85b-b305db87fb90_story.html

[Ulic]

I just bought two condos off plan. Initial 5,000 booking deposit on each condo. 30,000 on each condo upon signing the contract..... 2,750 on each condo every month for 1 year and 11 months when completion is due, plus an extra 30,000 extra payment on each condo every eight months. In total...I should have paid 160,000 on each condo by date of completion....balance to be paid in one lump sum when taking over the condos.

Sounds like a great payment plan. Would you mind posting the name of the development and were it is.

[Cheapman]

Buildings will replace ponds, many ponds between 2nd road and sukumwit along jomptien beach by example, so where the water will go? In the streets? Streets are already flooded during rain season. How will you drain thousand of gallons if there is no ponds anymore...?

Water will stand around these building attacking the base of the building. Some contain salty water I think.

Cracks after a few years, cement injection... Who is going to pay?

All these building will turns green after a while. And may even collapse. Yes, it could be very bad.

Why Traditional Thai houses are on pilotis ?

[dotpoom]

I just bought two condos off plan. Initial 5,000 booking deposit on each condo. 30,000 on each condo upon signing the contract..... 2,750 on each condo every month for 1 year and 11 months when completion is due, plus an extra 30,000 extra payment on each condo every eight months. In total...I should have paid 160,000 on each condo by date of completion....balance to be paid in one lump sum when taking over the condos.

Sounds like a great payment plan. Would you mind posting the name of the development and were it is.

Ulic....The name of the developers are...."COO"...and the project is is being developed on Pattaya Thai (South Pattaya Road). Coming from Big C and heading down Pattaya Thai it is situated on your left hand side, just before Cat Internet and the Service Station which would be on your far side. It is a small project with just two blocks with 5 floors on each block. It is mainly because of where it is situated why I was attracted to it, very central for either living or renting out. Hope this is of help to you,.... Good Luck.

[wym]

Just rent!

Really. . .

Not a smart reply to someone who wants to buy and stop being a cheap charlie renter.

A lot smarter to recommend to buy a condo that is already built !

No, IMO the only people who should invest in Thailand are professional businessmen with long experience lots of capital and personal local connections.

Like condo developers - certainly not buying them retail just to live in. Just doesn't make sense financially at Thailand's rent-price ratios.

For me, peace of mind is owning my own place. Its mine, and no one can force me out. The economy in the building is excellent. No leaks, no noise. Lifts we maintain on a service contract. We check fire systems, electrical systems. High occupancy rate. Who on earth wanna throw their money away renting, when they can be a home owner ???

Do you think you're throwing money away shopping at the supermarket rather than buying farmland to grow your own rice?

Roof over your head is just like food, and rent is such a tiny expense here.

Great logic! Rent for free.. That money you could put down on a mortgage, and owning the place within 10 years. Owning a place means you can modify it, improve it, change it. You can live, and feel free. Coz it yours. And I can keep "the crap" I love. For me this is an important part of life.

If you can well afford the extra EXPENSE of buying yourself that warm fuzzy feeling of ownership pride and "security" then fine.

Just don't think it's a smart investment from a financial POV.

[Cheapman]

They say on brochure ROI is 8 to 12 percent...!

[balo]

They say on brochure ROI is 8 to 12 percent...!

So they told me it would be a good investment. I can't even sell at market price .

Even if I rent out for 10 years I will not get my money back!

[Cheapman]

You can not sell something at market price or higher price when it has been used and when you have thousand of new condo for cheaper price around.

As long you have new constructions around , prices will not get higher as there are more condo than buyers.

The price increase that we have seen these last 5 years are fixed by builders and not by economy logic. So prices we see are big BS!

It s just a way to make you believe there is a demand. You inflate the price so people logically want buy before the price got higher due to the "high demand", the truth is there is no demand at all. It' s an illusion... lady sellers will tell you "my boyfriend bought 6 condo and rent them", Suuuure my lady, but that s pure bullocks.

Glossy brochures and nice sexy ladies venting these buildings attract lot of males in need of Thai affection. Come back to earth guys! These companies doesn't offer you anything. They make big bucks and drive all nice car with your money!

Their condo worth 3 times to 5 times less, that s the real value. Anybody who buy off plan have been scamed.

I counted last year over 20 new constructions with a total of 700 to 1000 condo(8 floors 6 buildings,...) . Do you really think they will sell 20000 condo in pattaya like that? Get real!

The biggest risk would be that Thailand turns to a civil war like Syria.

In this case, say bye bye to your purchase. If not, enjoy the swimming pool. You paid for it.

[dotpoom]

I sometimes smile to myself when I read all these calculations about owning v renting...the ups and downs of it all....how the markets will fair...etc.' etc., etc., It is my view that nobody owns anything, if we do have some possessions or material things.....we simply have a "loan" of them....for a short time. The way most people seem to think is that we will have these things for all eternity ........so better get it right.

I have some condos and a house...Why? I use the rent from the condos to enable me to live....I couldn't give a rat's a-- if they go up or down in value, I simply try to live my life one day at a time and today I have enough to eat and a place to sleep (there was a time when I had neither). When my time is up on this planet , hopefully I will have something left to pass on the "loan" to someone else. Why did I buy a house?...because I decided after meeting my wife that I would be staying in Thailand for the rest of my life....so....having decided that...I chose to live my remaining days in a house rather (as I seen it) than in a four walled box. With owning a house I could re-model it to my own satisfaction, put my own stamp on it and turn it as best I could into a mini retreat for reading and relaxing with plenty of flowers, water and all those lovely novelty cement figure'ens that can be bought in all the garden shops.....That is exactly what I have done.

I remember once getting the advice many many years ago....wherever you decide to live....make sure it is a place that you really enjoy going home to. I can honestly now say that when I am away from my house for more than a couple of days I really miss it....but most importantly I have also learned how to "detach" from material things. If for some reason I had to leave it....so be it....I enjoyed it while I have it.....and nobody can ever take that away from me. I do not spend my days worrying about things that might never happen. Any, it is presumptuous of anybody to assume there is another day in store for them so best enjoy the now and if you really want to be miserable....at least put it off till tomorrow....but as the song says...."Tomorrow never comes".

[fifthcolumn]

So what is this percentage that the condo new and used is overpriced in Bangkok? My guess is 45% new and 35% used. If the shtf you could lower both by 10-15%.

There is just a ton of land in Bangkok. Condos could be built non stop for decades.

20000 condos on Rachada corridor.

[Steiner]

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.

8% where did you get that figure???

More uninformed bar knowledge.

Agency commission is generally 3% in Bkk.

[CMTourist]

So what is this percentage that the condo new and used is overpriced in Bangkok? My guess is 45% new and 35% used. If the shtf you could lower both by 10-15%.

There is just a ton of land in Bangkok. Condos could be built non stop for decades.

20000 condos on Rachada corridor.

Even if the land was free prices couldn't fall that much as land is typically 20-25% of the sales price of a condo. Construction is a much bigger component and that is rising, plus the interest on the loans during construction and the sales and marketing cost, taxes and fees, etc which don't disappear.

Bangkok is extremely cheap compared to other capital cities in SE Asia. The big developers are operating on gross margins (i.e. cost of land plus building) of only 30-35% and net margins of 10-15%. So prices aren't much greater than replacement cost

[balo]

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.

8% where did you get that figure???

More uninformed bar knowledge.

Agency commission is generally 3% in Bkk.

And it's 5% in Pattaya. Too much , they just sit there and wait for a buyer. And then collect the fee.

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[CapeCobra]

Renting or buying is a decision determined by cultural background. The percentage of buyers is 70% in England, 80% in Italy and Spain but only 46% in Germany. The rental markets are significantly higher in Germany or Switzerland. One reason is that banks are more conservative and expect you to have at least 20% capital. The other is common sense. Once you take away the" my home is my castle" mentality, the loss of financial flexibility, being stuck in one location, and the overall higher costs and risks prevail. The silly idea to turn the States into an Ownership Society (George W Bush), combined with subprime lending to the lower classes, caused the big crash.

I bought a so-called 5 star condo in Pattaya. I spent about 15m Baht. If I would rent it out, it would take about 30 years to get the money back. I bought off plan. That was a mistake. Thai law and Thai lawyers are incredible; and that is not a compliment. The lower end market (e.g. View Talay boxes) is less dangerous. I know guys that made nice profits by selling units after a few years. The upper end is where great losses happen too often. Anyway, I will not do it again. Renting is a much smarter option.

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[KittenKong]

8% where did you get that figure???

More uninformed bar knowledge.

Agency commission is generally 3% in Bkk.

I was referring to the total commission for off-plan sales in Pattaya, not commission on resales (which is also commonly 5% in Pattaya).

I dont know what happens in Bangkok, nor do I care.

[KittenKong]

You can not sell something at market price or higher price when it has been used and when you have thousand of new condo for cheaper price around.

You can if there is something very desirable or rare about your used condo, and one does come across such places from time to time. The location of old buildings may also make them much more desirable that that of new buildings.

If it is a crappy old box just the same as a thousand crappy new boxes then indeed it may not be so easy, but in my experience old crap was often built better here than the new crap is.

[vento]

Rent??

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[fifthcolumn]

Figure I will buy a condonwhen I am +72 or when the market tanks. 72 would allow me to amortize the cost at 15 years so be net evrn to rent but own the place. Wife will have it rent free after I die and nieces can inherit it thereafter.

I throughly agree that there is abdolutely no limit to the amount of condos that can - and will be built in Thailand. That is what condo developers do.

There is so much land in Bangkok, little boxes for US100k is just folly. Some weeks ago was on bts passing Ari. There is just hectacres of broken and adandoned land within minutes of bts.

If land got crazy, crazy expensive, the govt could sell off its land and move the capital outdide BKK as well.

There

Is

So

Much

Land

[trogers]

So you want to buy a real property in Thailand. And the reasons are...?

Next you are deciding buying off plan or buying off the secondary market. Your reasons are...?

There is no one suit that fits all. Much will depend on your reasons for making the above 2 decisions.

But from an investment point of view, one would buy at a low point of a property cycle, and not at a high point - and the peak and trough of a cycle will be much more for new condos than old ones.