Once I've Found The Condo I Want To Buy, What Comes Next?

[yeti]

Hi,

I am presently looking for a condo to buy. Seen nice ones.

What will come next once I've found one I like.

I know I'll check the whole building to see how is the maintenance.

Anything else I can check? Anything required?

Most owners ask for a 10% deposit then the full payment with the property transfer a week later.

Normally what comes first, the money transfer or the property transfer. Where is the property transfer done, in a lawyer office, a government office?

Thxs for any info.

[naturalpoints]

Hi,

I am presently looking for a condo to buy. Seen nice ones.

What will come next once I've found one I like.

I know I'll check the whole building to see how is the maintenance.

Anything else I can check? Anything required?

Most owners ask for a 10% deposit then the full payment with the property transfer a week later.

Normally what comes first, the money transfer or the property transfer. Where is the property transfer done, in a lawyer office, a government office?

Thxs for any info.

Get a lawyer...................

[thaihome]

transfer is at land office. You will need a fluent Thai speaking person that has your interest in mind. An independent lawyer is a good start.

TH

[fisherd3]

10% deposit and hand over balance at land office on transfer. You need a reasonable lawyer in Pattaya PM me. and remember to transfer the whole amount to your bank account from outside Thailand, and state on Swift transfer 'To purchase condominium' and when you go to draw it out to pay tell them you want the form that conforms you sent the money in, used to be called a 'TOR TOR 3' now called something like 'international currency transfer confirmation'. This a) enables you to put the condo in your name (subject to ownership quota in condo ) and if you at some stage want to export the money again enables you to do it. (So they say!). It is all reasonably painless when you do it right. If the amount is under US$20k (equivilant) you cannot get above form and request a letter confirming transfer instead.

[billaaa777]

OK, let me tell what really goes on and piss off all the real estate agents reading this. And then listen to their BS telling you this is not the case with all/their agencies.

First, the real estate agent will ask you for a 10% deposit. But that does not mean your going to be able to buy the condo you’re putting the deposit on. Some of the agencies keep all the deposit hoping you won’t close so they can keep the deposit. Some of them will only offer the seller half of the deposit.

By giving a real estate agent in Pattaya a deposit on a condo only means you’re pretty much locked into that agent, but by no means are you guaranteed the owner of the condo ever received the deposit, or signed the sales contract.

Since the owner of the condo never receives the deposit they will often sell their condo to someone else. Then go ahead and try to get your deposit back from that real estate agency, they will try and show you 10 more condos and give you excuse after excuse why they can’t give it back.

A little additional information, some of the biggest and supposedly most respected are the largest abusers of this little tactic.

To solve this problem and ensure your going to be able to buy the condo you want and are putting the deposit on tell the agent you want to give the deposit to the buyer at the same time both of you sign the sales contract. Even they can't find a lie to get around this one,

You really only have two other issues to deal with. One have all the condo association fees, utilities, etc. been paid to the management firm running that particular building. Second are there any leans on the property at the land office.

Before, putting down a deposit try and find out these two facts. When you are viewing the condo with the agent you can ask the office at the condo about the funds owed to them. Most of the offices will tell you. Next, have the real estate agent check the dead at the land office to see if there are any leans on the property.

Of course you could have a lawyer do this for you, and if you’re a first time buyer I would recommend it. The top property attorney in Pattaya only charges me 5,000 to transfer a property. They are at the land office every day, so it is easy for them to check the dead to your property. Just get a copy from the seller, most will provided it willingly.

To close on the property the seller has to provide a letter from the condo management saying there is no debt on the condo. I am always a little leery when fees have not been paid for years on a condo and hesitate to put down a deposit until I understand from the seller how are these going to be paid. Sometimes I pay them out of the deposit to ensure the closing.

Besides the money, you will need a copy of your passport and a letter from the bank saying the funds where transferred from abroad to buy the condo.

It is pretty much standard with both the agencies and attorneys that the dead is transferred first and then the final payment is made. If you are using an attorney you can just sign a power of attorney and give them a bank check and tell them to only give it to the seller after the transfer has been completed.

That is if you want to miss the wonderful experience of sitting at the Pattaya land department for 4 or 5 hours on the day of the closing. But, then again if you don’t have anything else to do, don’t mind being bored for a while and just want to see how everything works try a visit to our lovely land department.

[Gary A]

No way would I put down ten percent regardless of what the agent says. I put down 10,000 baht earnest money AFTER I checked that the maintenance fees and utilities were paid up to date. At the same time I found out if the unit in the complex was eligible to be owned freehold by a foreigner. Make sure the person representing the property owns it or is authorized to sell it. It's a nice little scam to collect down payments on property that they don't own and then skip out. Ask other expats what attorney they used. DON'T trust a seller's attorney. If the condo is able to be owned freehold and you have reached an agreement the next step is the government land office. The unit I bought had a lien on it. I had to have two separate bank checks, one for the owner and one for the bank. If you find the owner is way behind on the maintenance payments find another complex because it is likely the security and grounds maintenance is not up to standard or will suffer in the future. Make sure the general fund has a healthy balance. That information IS available to the unit owners. You pay for the unit at the land office AFTER you see your name on the chanote. Be assured that if there are any problems anywhere, the property will NOT be transferred. It sounds complicated but it is actually pretty simple. Just make sure your attorney checks everything properly. One minor thing is a telephone line. In Pattaya there are no telephone numbers available and you will have a difficult time getting a phone line. I had to go with the owner to the telephone office to have the number transferred to my name. A former farang friend (note former) sold his condo including the telephone line. After the sale he went to the phone office and had it transferred to another property.

[dsfbrit]

Ask if the condo is owned by a non-Thai via the company mechanism - some are to get around the rule relating to majority ownership of a block of flats by Thais - consider if you really want this additional hassle.

[dave111223]

Be sure that both you and the seller have a clear unstanding of who is paying the taxes at the land department. This can add up to a LOT of cash. And you dont want to get to the land department and have them say "So you got the 150,000 to pay for the tax?" (and already be holding your 10%)

(Obviously make sure you get a contract with all the details down on paper before handing over the 10%)

We didnt use a lawyer, but just paid close attention to detail, and didnt have any problems.

[taxexile]

lots of good advice above .

definately deal directly with the owner , (price negotiations and payment of deposit) even if you have been through an agent , the agent should have no reservations about letting you deal with the owner.

it is the owner who will be paying the commission to the agent , and the commission gets paid at the time of sale , not before.

if a bank have a lean on the property , a bank representative must turn up at the land office at the time of sale to receive money owed and to fill out the appropriate paperwork.

the juristic office of the condo will give you paperwork to show that all maintenance charges and utility bills have been paid and that the foriegner quota of the building has not been exceeded.

if this is your first buy then a TRUSTWORTHY legal representative should also be present and they will have checked all your paperwork beforehand.

Edited October 22, 2006 by taxexile

[rak sa_ngop]

Not related to money but for me two important considerations easily overlooked before buying, based on personal experience.

Firstly, which way does your condo face, i.e will you be getting morning, afternoon or maybe all day sun? I would rather keep my condo cool in the morning without aircon but maybe you have different preferences.

Secondly, consider external noise, especially if there is a swimming pool nearby. Kids can be very noisy, especially during the hot season build up to Songkran.

Unless you will be renting out in which case not so important.

[samtam]

As one of the earliest replies suggested: "Get a lawyer". It doesn't cost that much, and is well worth it. You would do that in any other country, so especially true here. Obviously get a reputable lawyer. As to the property itself, the advice about noise is valid. Apart from the outside noise, is it located near to a vacant lot? There is huge redevelopment in Bangkok/Thailand, and you have to be as sure as you can, that there isn't going to be construction going on around you. Also, be sure about soundproofing in the building - upstairs neighbours (difficult to assess in a new building, or if it's a quiet time), proximity to maids areas - they tend to chat a high decibel levels. Good building management and maintenance are key...observance of house rules etc.

[yeti]

Thanks for all those usefull answers.

Is there a way to know beforehand how much does the property transfer costs?

Is it a % of the price paid?

Concerning advices given about the letter from the bank saying the funds where transferred from abroad to buy the condo, I guess that apart allowing me to transfer back the money out of the country, it's related to taxes?

I don't see in what it could be related to being able to put the condo on my name? Or would that mean that you cannot put the condo at your name if you buy it with money earned in Thailand? Anyway as for me the money will come from abroad, I'll ask for this.

Anyway I'll probably be asking some more questions here soon, thxs.

[samtam]

The funds for a farang to buy a condo have to come from overseas to satisfy foreign exchange regulations. Even if you have the money in Thailand at present you would have transfer it out and then remit it back in, ("bed & breakfasting" it). I'm not sure the exact reason for foreign funds being required, but I'm sure someone will tell you. It's not really the point - it's the regulation, if you want to repatriate the funds out of the country after any sale of the property. It does not affect your title to the property. As I said....GET A LAWYER! From memory they only charge about USD1,000 to do all conveyancing etc etc.

[billaaa777]

To buy a condo in your own name in Thailand you need a letter from your bank saying you can. Go to your bank and ask them what you need. That’s all you need to do. Forget about everything else and all the other supposed expert comments.

As far as the transfer fees, they are impossible to figure out or know before the actual amount is told you by the land department. You can get some kind of estimate from the previous fees for the building you are buying in. The estimate should not be off more than 15%. There are all kind of experts that are going to provide exact formulas on the expected fees, they mean nothing.

This is true; I could not even make this up if I tried. I have the receipts to prove it. In both cases I negotiated with the seller and buyer to pay the transfer fees. Good for me buying, but bad for me selling. I should have sold it for 25,000 more. I bought a condo on 10/9/06 and the fees were 47,000 and change. When I sold it I thought the fees were going to be around 55,000. I sold the condo on 10/17/06 and the transfer fees were 41,000 and change. Go figure, explain how that works?

There is no way to know the fees until the man/woman at the land department brings you the little paper telling you what to pay.

[taxexile]

To buy a condo in your own name in Thailand you need a letter from your bank saying you can. Go to your bank and ask them what you need.

i didnt need one , all i got from the bank was a confirmation of a fund transfer from abroad.

what exactly does this letter state.

That’s all you need to do. Forget about everything else and all the other supposed expert comments

at your own risk.

[thaigene2]

Two quick points. First about the deposit, I would only pay the deposit by cashier cheque from my bank made out to the SELLER not to some agency - A/C Payee Only. Now you have a record.

Second, what worries me is this thing about the Jursitic Person and Management company of the building only providing written confirmation of any outstanding condo fees and the percentage of foreigners in the place - AFTER the deposit is paid. Seems to me your stuffed if it turns out the foreign ratio is more than 49% and/or there are lots of unpaid fees owing - maybe even an assessment for major work that the owner hasn't paid. It happens - everywhere.

I would try to get confirmation of all this before paying the deposit but the management and juristic person resist this..

[taxexile]

I would try to get confirmation of all this before paying the deposit but the management and juristic person resist this..

then , i would ask the seller to authorise the juristic office to release the information you require , if they wont and / or you have any doubts as to the honesty of the seller then just walk away.

its a buyers market and there will be other condos.

[1Rai.com]

If you are unsure of the proper processes involved here, then the best piece of advice that I (not being a real estate agent) can give you is to seek advice from professionals that make it their business to know about these matters.

That includes real estate agents and it most certainly includes lawyers.

Do not go on hearsay. Get professional help.

[Sunbelt Asia]

Hi,

I am presently looking for a condo to buy. Seen nice ones.

What will come next once I've found one I like.

I know I'll check the whole building to see how is the maintenance.

Anything else I can check? Anything required?

Most owners ask for a 10% deposit then the full payment with the property transfer a week later.

Normally what comes first, the money transfer or the property transfer. Where is the property transfer done, in a lawyer office, a government office?

Thxs for any info.

Before you go ahead with anything else, have you checked the building? Have you been there during rush hours to see what the traffic situation is like?

How old is the building?

Did you open pipe shafts and electrical shafts to see their condition? Were they sealed off between floors to prevent a fire rising up the building?

Are there any signs of leaks on ceilings and around windows?

What fire protection and alarms systems are there? Are the fire escapes clear of any stored items? Are all fire exit doors open?

Did you go into the mechanical plant room? Did you look at the jockey pumps for the sprinkler system to make sure there is pressure in the sprinkler system?

Is the building in an area that flood? Were they piles of filled sand bags stored somewhere? Were there "tide marks" on walls? That is a probable sign the street floods badly.

If you have a car, do you get a fixed parking space or not?

Who manages the condominium juristic person? Is it a reputable company? Did you ask to see a copy of the accounts? If not, it would be a good idea to do so.

Have you asked about the sinking fund? What are the charges? Does the condominium juristic person have many accounts receivable? Some condos require a sinking fund payment each year, and others require it 'on demand'. Make sure you know in advance what their policy is and how much it will cost you.

Has the condo management set up an annual insurance premium, and how much is it?

How long has the condo management team been looking after the building?

How much will you be required to pay for the maintenance contract each year?

Make sure you know whether you are buying leasehold or freehold

Our professional fee is 6,500 Baht for the title deed search and to check the percentage of foreign ownership is not more than 49%. If it is brand new project, we check the details of the land with the Land Office to verify if the land for the project actually belongs to the developer as well as any mortgage on the land. We also do a due diligence search for the corporate and financial information of the company who is the developer of the project. In this regard, we check the corporate documents and balance sheets. We as well verify who are the shareholders and directors. If the development project has a loan with a bank or financial institution, we will point this out to discuss this with the bank or finance company concerned. We also check if the developer of the project has applied for the construction permits with the “Civil Works Office” and also check with the Office of the Environmental Protection, to check if these permits have already been granted to the developer.Unfortunately many condominium buyers in the past have paid deposits only to find the building has either never been constructed or it is standing in a state of being a "ghost building"

As there is no legal requirement for escrow accounts in this country( we do it for our clients), the buyer is at the hands of the developer. Other than taking a civil action against the developer or going to the consumer protection board, there is really nothing you can to do to recover your deposit.

As for existing condo's, the deed search will show the property in question has to match the description in the title deed that represents it, the seller has to be confirmed as the owner of the property and there should be no liens or servitudes registered against the condo that would prevent the unencumbered transfer of ownership

When purchasing a completed property from a seller the standard approach would be to draw up a reservation contract or letter of intent "MOU" This is a contract which binds you and the seller to the sale of the condo at a specific price in accordance to a specific schedule, and will typically set up penalties for default of either party. A deposit of 10%( we argue for a smaller amt) is usually required to secure a property and closing payments will typically be expected within 30 to 60 days. Deposits are typically non refundable, save in the event of default by the seller, so bear in mind that once the deposit is placed you are committed. We argue that this should be held in escrow, some sellerswill allow it. However, if they insist they get the deposit, the contract should state "The deposit will be refunded in full if the Due Diligence report does not come back positive. " There is typically an equal commitment from the seller, where he will commit to refund of your deposit and payment of a penalty of an equal amount if he defaults on the contract.

Our professional fee is 9,500 Baht for reviewing the purchase agreement and making comments.

By the way, if this condo is on the "drawing board", we also check the clauses in reference to all the common areas and utilities to ensure that the developer will not use for its own commercial purposes, (recreation areas, parking lots, club houses and swimming pool, etc.) Some developers are charging for the use of the swimming pool or set up a market in the parking lot for the public. You’ll find some cases of selling the common areas to the 'mafia." Many contracts drafted by developers always contain clauses in favor of the developers for their non-liabilities for breach of contract.

Beyond the price, payment and closing schedules, it's important that a contract includes clauses to cover who will pay the transfer fees and taxes (there is often a business tax and always an income tax assessment made at the point of sale) as well as an understanding of the value at which the sale will be declared - this is typically (for tax reasons) at or close to the government minimum assessed value. You need to sit down with the seller or someone who knows how to do the calculation of these various fees and taxes and then , generally as part of the overall price negotiation, come up with an appropriate formula for sharing these costs. There is no fixed rule, it can vary from buyer pays all the fees to seller pays all the fees, but it's most important that you have resolved this in advance of the transfer date. The last place you want to be working out such details is when you arrive at the Land Office. Our professional fee is 15,000 to be involved with the negotiations. You obtain your best price and then let us negotiate. If you don't at least save an additional 15K, their is no professional fee for the negotiation, We have saved many clients hundreds of thousands and in a couple cases, over a million Baht, after our client had obtained his "best price. "

Remeber when you wire the funds to send over 800,000 Baht at a time to get the foreign exchange certificate. Send this in dollars or euros NOT Baht. The wire must be sent in exactly the same name as that on the purchase contract, i.e. if Adam Smith is the buyer then the name Adam Smith must appear on the remit advice. A. Smith or Smith Co., Ltd are unacceptable. You must state in the remittance advice. This should be "for purchase of a condo located at.....".

Our professional fee is 8,500 Baht for registration at the Land Dept. is legally complied with the proper transaction and the name of the new owner is properly recorded.

Most people would never think of buying a house or condo, in their own country without legal advice. Some however have done this in a foreign country like Thailand and have had problems. Understandably as in Thailand all laws and official documents are in Thai language. What you understand is just what the other told you. What someone tells you about Thai laws should be carefully considered.

This is the minimum due diligence you should have if you wish to avoid the legal issues in Thailand. ( WARNING: In this short post, I have not pointed out all the issues that the you the buyer needs to be aware of )

Most owners ask for a 10% deposit then the full payment with the property transfer a week later.

Normally what comes first, the money transfer or the property transfer.

What should come first is the deed search, review of the % of the units owned by Thais/ Foreigners, then review of the contract, By-laws of the Condo all this before any % is given to escrow or deposit directly with the Seller.

The final payment is done at the Land Office.

Where is the property transfer done, in a lawyer office, a government office?

Land Office

www.sunbeltasiagroup.com