Real Estate Agents Inflating Prices?

[Nigel M]

There are at least 3 foriegner run real estate places in town now.

Are they responsible for inflating prices? To gain a bigger fee?

I have to say i believe so.

Without mentioning any particular site, there was one that featured what looks like one of those shacks the rice farmers keep at the edge of a paddy, for rent at 5000 baht per month!

If all these property and real estate folks keep telling owners they can get more, they've falsley raised their hopes and inflate a market.

They do provide a good service, they can be helpful for finding places, but the prices need to be realistic.

Especially with land purchase prices. They are absolutely absurd relatively speaking. Million baht for a rai.

[mumbojumbo]

There is one in town that has a house for rent in Sintanee 2 for 9500 a mo. The going rate for houses for rent there is 3500-5000. I think i am going to become a realtor.

[soap]

There is one in town that has a house for rent in Sintanee 2 for 9500 a mo. The going rate for houses for rent there is 3500-5000. I think i am going to become a realtor.

hello mumbo

before you become a realtor,i would make sure your figures add up.

lets say a house in sintanee 2 cost 1.5 million, if you take a morgage out over 20 years at even 5% pa you pay back 3 million baht, so you only want to pay say 4,000 bpm say 50 thousand a year rent.

so in one year you will pay rent of 60,000 baht so i think it will take the owner 50 years to recoup what he pays the bank.

so if the owner pays 12,000 baht a month or a 150,000 baht a year morgage to pay off the 3million bank loan over 20 years he has to subsidise the rent you want to pay at the rate of 7,000 baht per month for 20,years.

seeing that most banks are giving 5% plus interest on your money at present so i think the 5% morgage figure i quoted is a little on the low side.

so with figures like this i would think twice about going into the realtor business

[Rinrada]

All to do with when the red mist decends.....

[cclub75]

Your demonstration speaks by itself !

The bug is what you call the "cost". At least, the "price" that was given to you...

1.5 million is wayyyyyyyyyy to high.

As for interest rate, you're right : the MLR (minimum lending rate) is more than 7%.

before you become a realtor,i would make sure your figures add up.

lets say a house in sintanee 2 cost 1.5 million, if you take a morgage out over 20 years at even 5% pa you pay back 3 million baht, so you only want to pay say 4,000 bpm say 50 thousand a year rent.

so in one year you will pay rent of 60,000 baht so i think it will take the owner 50 years to recoup what he pays the bank.

so if the owner pays 12,000 baht a month or a 150,000 baht a year morgage to pay off the 3million bank loan over 20 years he has to subsidise the rent you want to pay at the rate of 7,000 baht per month for 20,years.

seeing that most banks are giving 5% plus interest on your money at present so i think the 5% morgage figure i quoted is a little on the low side.

so with figures like this i would think twice about going into the realtor business

[lukamar]

Are they responsible for inflating prices? To gain a bigger fee?

Probably the answer is yes and no. Agents always try and get the best price for property so they make the most on their commission and Thia's also know not to give away their property anymore for a new scooter.

When Thia's see foreigners looking at their property they often see a bottomless pit of money, which is often not the case, and inflate the prices themselves for that group. The house we have in Phayao would have been twice the price if I was the one to buy it, rather than my wife independently, I never saw the place, other than pictures and a drive by, until we owned it. We learned years ago not to have the seller know there is a foreign guy involved or the price goes up drastically.

Many foreigners do not have the network of family or a good understanding of the Thai language and have to use agents to find property. Right from the get go, the price is high because the seller and agent knows that foreigners will be the ones buying the property. Thus the big discrepancy in pricing.

We are thinking of building/buying in CR and saw a new property we liked, my sisterinlaw could save use about 400,000 by dealing direct without an agent. That says it all I think, but in the end we passed on it anyway because of the land size.

[fxm88]

Agents always try and get the best price for property so they make the most on their commission...

Do they really?

[lukamar]

Agents always try and get the best price for property so they make the most on their commission...

Do they really?

Maybe not, if you are talking the US and US Dollars, but we are not.

Average house in USA $300.000 - Sales commission @6% - $18,000 USD or 720,000TBT.

Above average Farang house in Northern Thailand 3 million - Commission @ 3% - $2250 USD or 90,000TBT.

There is a great difference in the average house sale in the west and in Thailand or Chiang Rai. A $10, 20 or 30,000 USD drop in the house price in the US, which has a fast inflating market, is totally different than a similar percentage drop in a house price in the Thai market, which has not shown much growth in years and is rather stagnant especially in the upper price ranges. In Thailand the Realtor has to try and get the most for the property or they won't be a Realtor for long with a 3% commission on sales in Thai Baht.

[In the Rai!]

You also have to look at what is in it for the realtor. How many houses do you think they are renting a Month.

I would not imagine that many. so in order to get their cut monthly they need to put a little bit on it. I personally dont think it is the realtor IMO, as most of the houses that are getting rented are owned by Thais. The Thais are going to these Farang realtors knowing they they could probably get more return by renting to a farang than a Thai.

Why rent to a Thai and get 4000 Bt return a Month when you could get a farang who might not know any wiser and pay 8000 or 9000 Bt a month.

Its business. If you dont like the price dont buy it or rent it. Keep looking and you WILL find something you like eventually at the right price.

In The Rai!

[buddhafly]

there is nothing wrong with a realtor trying to make money. its a job. and a good agent can help you find stuff you otherwise wouldn't. and we all would be happier with a little more money for our efforts.

the problem would be if the agent were giving a seller a false sense of what the price should be, in order to get a higher commission, and then the seller misses out on many buyers, who would have bought at what the seller would originally have been satisfied with.

[lukamar]

the problem would be if the agent were giving a seller a false sense of what the price should be, in order to get a higher commission, and then the seller misses out on many buyers, who would have bought at what the seller would originally have been satisfied with.

I've seen this quite often unfortunately. A Realtor has a house listed for a specific price but if you go directly to the owner the price is often hundreds of thousands less. At the moment one Chiang Rai Realtor has the same new property listed on his website and also on another site. same pictures, same blurb but the price is 300,000 (approx) different and I'm betting if you went to the builders show home you'd save 250,000 over the lowest price the Realtor had listed.

[Thanks2Dell]

There are at least 3 foriegner run real estate places in town now.

Are they responsible for inflating prices? To gain a bigger fee?

I am considering on moving to CR from the USA. I have been in CR for several days trying to find a place to live. So, I hope I do not sound to picky when I state the following.

I read a magazine named 'CommuniThai' which has an advertisement on the back cover for a real estate agent. Unfortunately it does not appear that this agency is in existance! See below an email that I sent to the agency but received no reply. Does anyone no of another agency? I will be leaving CR on 28 Sep to return to the USA. It is my intention to return to CR if I can find housing.

MY Email: "We are Experienced Real Estate Agents Based in Chiang Rai, Specialist ……………" Is this a joke! Nobody answers phones or email. The office that ‘was’ shown in the ‘CommuniThai Magazine’ is no longer there and no indication as to where the office moved!

I am probably wasting my time with this email as it appears there is no ‘human body’ that will read it. What I find amazing is that someone (Farang ?) spent a lot of time and money to develop and implement a well designed web-site. There was also a lot of effort put into taking pictures of real estate ‘supposedly’ available for rent and sale.

Now then, people like myself who desire housing ‘as you have indicated in your web-site’ cannot contact anyone by phone, walk-in or email to enable these people to view the property you have listed. There are several listings in the Baan Den Ha Area as shown on your web-site that I am interested in.

Maybe these are just ‘ghost’ listings! Maybe the area ‘floods’ every year and you do not want to show these houses after several days of rain! I have noticed that many of the houses are coming up for rental in November. Is this because of a ‘flooding’ problem?

The rental houses that I am interested in are SH15 (10,000 ), RH 15 (8,000 ), RH16 (8,000 ), and RH17 (10,000 ). If I cannot view the property within the next 2 days (Monday-Tuesday, 25-26 Sep) then I will no longer be interested in ‘your’ houses or services.

Thank You

Edited September 24, 2006 by Thanks2Dell

[johnnyk]

Thai businesses are notorious for not replying to falang e-mails.

Its likely that an office staffer sees the e-mail, doesn't unnastan and doesn't want to lose face by admitting s/he doesn't unnastan so the e-mail gets binned.

Never mind e-mail, if you are in CR walk around, look in windows and find some falang hangouts where you can start gathering info.

I found an apartment in Khon Kaenby asking at the reception desk of my hotel and they steered me to a nice block with vacancies.

[Joel Barlow]

If you are not here, and do not have local connections, you will pay more. That seems to be why Farang seem to be able to offer realty service (which may be illegal; its included on the King's list of proscribed activities).

That this thread accepts that real estate here has been stagnant mystifies me. Yes, there is a lot of (relatively) low-price property available - in large part due to economic "bubbles" and both foolish buying and lending. But undeveloped land has gone up dramatically over a fairly short period - well, I mean land with road access, which can connect to the water, sewer and electric grids. To do your own 'utilities' is price prohibitive (for most, anyway).

I recommend buying a fixer-upper a bank has repossessed - at auction. This requires intelligent help (not that of a bar girl and her family - no offense intended). And another place to live for a while...

[MrOzark]

Did everything with the Ad and the magazine get straightened out?

I'm sure if you contacted CommuniThai, they would be sure you got your questions answered.

The new contact for the real estate agent is named 'Eddie'.

[geoffphuket]

There are at least 3 foriegner run real estate places in town now.

Are they responsible for inflating prices? To gain a bigger fee?

I have to say i believe so.

Without mentioning any particular site, there was one that featured what looks like one of those shacks the rice farmers keep at the edge of a paddy, for rent at 5000 baht per month!

If all these property and real estate folks keep telling owners they can get more, they've falsley raised their hopes and inflate a market.

They do provide a good service, they can be helpful for finding places, but the prices need to be realistic.

Especially with land purchase prices. They are absolutely absurd relatively speaking. Million baht for a rai.

I remember when you could buy a rai of land in Phuket for a million Baht....Ahhh those were the days