banks selling foreclosed properties

[logon1]

in the past at one of the malls ALL of the banks had a display of the properties that they were selling off. It was quite a big deal and they actually moved quite a bit of inventory. Does anyone know it they have continued this practice 

[Peterw42]

I have never seen anything like that. I have often wondered about what the banks do with foreclosed property. Its not really in their best interest to dump property and devalue all of their mortcages. I was always under the impression that the banks just held the property.

How long ago did you see this ?

[chiang mai]

The banks do this as a group from time to time, typically in a mall, alternatively, many of the larger branches have displays set up on a permanent basis. Finally, if you look for a very large branch bank, particularly Bangkok Bank, they often have an entire floor dedicated to this, typically a branch that has a mortgage and business section on an upper floor.

[NanLaew]

That looks like a local initiative by the CM banks. I haven't seen similar in my neck of the woods. Bangkok Bank does have a page of foreclosed properties on their website but the last time I looked, virtually all of them were in Bangkok and suburbs. The listing was also in Thai-only and the web page wasn't properly indexed without any sort capability so it was a real chore looking for anything beyond scrolling forever. It would be interesting to know if other banks have similar web listings. Maybe check at the local branch and see how they handle or advertise local foreclosures?

[cyberfarang]

No one gets land and property from the banks at marked prices. They are sold to the highest bidders, type of auctions.

 

Many of these properties have problems, sitting tenants or the homes at still occupied by the previous owners that refuse to move out, meaning a court case is required to have them evicted. Where I live there is a huge amount of land that was repossessed by the banks years ago. Then over the years men have appeared with mechanical diggers and stolen the soil. The area now looks like a crater on the moon and anyone thinking of buying that land would have to spend millions of bahts to have it all filled in. 

 

 

[trainman34014]

Bangkok Bank branches usually have a notice board with pic's and details/prices etc of houses and land for sale.   Ten years ago when i was looking to buy i made arrangements to view several homes and was offered them at prices below list for cash, even though they had already been reduced previously.  They were all empty but were in bad condition as left by previous occupants.  The banks don't do any work to these properties, even cleaning, and the way a lot of Thai's live and treat homes the property is often in a disgusting condition.

[bark]

6 hours ago, Peterw42 said:

I have never seen anything like that. I have often wondered about what the banks do with foreclosed property. Its not really in their best interest to dump property and devalue all of their mortcages. I was always under the impression that the banks just held the property.

How long ago did you see this ?

They have been doing it for years.  Most Thai neighbor hoods, will have a few house with Bank signs.

Normally you can save 20-30 percent. But a lot of work to fix them up.

[Baerboxer]

There are several properties that have been foreclosed by various banks in our mobaan. Nice big detached with 3 or 4 bedrooms and bathrooms etc. They have been allowed to stay empty for 3 to 5 years with absolutely no maintenance to the property, gardens and in some cases have semi finished extensions which are open to the elements and wildlife. 

 

It was cost a very large amount to fix them up now. And never seen any interested potential buyers visiting.

[chiang mai]

18 minutes ago, bark said:

They have been doing it for years.  Most Thai neighbor hoods, will have a few house with Bank signs.

Normally you can save 20-30 percent. But a lot of work to fix them up.

 

That is simply not true, by law the banks are not allowed to discount mortgaged properties they have repossessed.

[kaptainrob]

We bought repossessed land from KTB bank at their list price.  It was the last of 4 lots they had remaining in what was originally one parcel.  Had to submit our offer 'in writing' and wait a month as part of legal proceedings but it was otherwise a seamless exercise.

 

KTB on Mahidol Road heading away from Airport Plaza and on left side just as overpass and entry ramp merge.  Kasikorn Bank down Hang Dong Rd, western side, have a book and/or display of properties and one can make appointment to view.

[Minnehaha]

7 minutes ago, chiang mai said:

 

That is simply not true, by law the banks are not allowed to discount mortgaged properties they have repossessed.

 

Discount from what price? I mean, how is the sale price determined? Amount left on the mortgage at time of foreclosure or sale date? Value of the asset on the bank's books? How would you know for sure what that amount it?

 

There are properties around that have bank sale signs on them, as has been pointed out. My experience is that upon inquiry one is told by the team who handles this at the mortgage company the "sale price" and then one is standing at the first question I asked in first paragraph. 

 

In case it is not obvious.... I don't know the answer. But I do know from experience that it is always negotiable and only if one does extremely good due diligence on the asset to determine valuation, can one come close to what 'should' be paid for the property. This is always lower than the list price - 20% , 30%, 50%, or 10%. I have seen it all. 

 

More to the OP question ....

Particularly outside Bangkok, foreclosed properties are auctioned or sold off and quite often it is first offered to friends of the Bank. These guys get first pick, or can call their cousin or friend who gets first pick. This happens and then day of auction POOF! the property listed as for sale is suddenly listed as SOLD and never made it to the block. I would like to be one of these guys who knows the mortgage company / bank because I know there are many opportunities that are not offered publicly. This is especially true when there is a kick back to the bank mgr. 

 

In general, in countries where there is more transparent market forces at play, banks do not want to keep these assets on the balance sheet. THE ARE DEPRECIATING ASSETS as long as they are not kept up or lived in. Banks need to go in the other direction. They cant rent them out or borrow against them. They are dead weight and only cost the bank, so the bank or mortgage company would want to get them off the books. 

[chiang mai]

19 minutes ago, Minnehaha said:

 

Discount from what price? I mean, how is the sale price determined? Amount left on the mortgage at time of foreclosure or sale date? Value of the asset on the bank's books? How would you know for sure what that amount it?

 

There are properties around that have bank sale signs on them, as has been pointed out. My experience is that upon inquiry one is told by the team who handles this at the mortgage company the "sale price" and then one is standing at the first question I asked in first paragraph. 

 

In case it is not obvious.... I don't know the answer. But I do know from experience that it is always negotiable and only if one does extremely good due diligence on the asset to determine valuation, can one come close to what 'should' be paid for the property. This is always lower than the list price - 20% , 30%, 50%, or 10%. I have seen it all. 

 

More to the OP question ....

Particularly outside Bangkok, foreclosed properties are auctioned or sold off and quite often it is first offered to friends of the Bank. These guys get first pick, or can call their cousin or friend who gets first pick. This happens and then day of auction POOF! the property listed as for sale is suddenly listed as SOLD and never made it to the block. I would like to be one of these guys who knows the mortgage company / bank because I know there are many opportunities that are not offered publicly. This is especially true when there is a kick back to the bank mgr. 

 

In general, in countries where there is more transparent market forces at play, banks do not want to keep these assets on the balance sheet. THE ARE DEPRECIATING ASSETS as long as they are not kept up or lived in. Banks need to go in the other direction. They cant rent them out or borrow against them. They are dead weight and only cost the bank, so the bank or mortgage company would want to get them off the books. 

 

Only in Thailand is it NOT a depreciating asset!

 

Mortgages in Thailand are regulated by the BOT which sets limits on the amount that can be advanced based on the appraised value of the asset, for example:

"

The loan criteria for buying land must meet with the following objectives:       7.1 To buy a vacant plot of land only in housing projects that the Bank supports.       7.2 To buy a vacant plot of land adjacent to an existing residence for the purpose of extending one’s own home, etc.       Loan criteria for 7.1) and 7.2) are:              1) The loan shall not exceed 70 percent of the land’s appraised value and not exceed a maximum of THB5 million.              2) The area shall not exceed 3 rai.              3) The maximum installment payment term shall not exceed 10 years.       7.3 To buy land from recovered debt settlements of KBank.       7.4 To buy land from auctions of the Legal Execution Department (mortgaged assets with KBank).       7.5 To buy land as foreclosed property held by KBank and or an asset management company established by KBank.       Loan criteria for 7.3 and 7.5 are:              1) The loan shall not exceed 90 percent of trading price and not exceed 85 percent of the land’s appraised value.              2) The maximum amount of the loan must not exceed THB10 million, but is unlimited in area of land to be purchased.              3) The maximum installment payment term shall not exceed 10 years 8. According to the Bank of Thailand Regulation - If the trading price of the collateral is more than THB10 million, the allowed loan shall not exceed 80 percent of selling price. - If the collateral is Condominium, the allowed loan shall not exceed 90 percent of selling price. - If the collateral is House, the allowed loan shall not exceed 95 percent of selling price".

http://www.kasikornbank.com/EN/Personal/Loans/KHomeLoan/Pages/KHomeLoanKasikorn.aspx

 

 

As a result of the above the book value is nearly always less than the appraised value and individual banks are not permitted to discount that amount. As a result the general public only ever sees full value repossessed properties for sale, better value properties never reaching the open market.

 

[dotpoom]

I remember a time when I was looking into buying a property like you are talking about.....I was told  from more than one source that the best bargains are bought up by the bank staff and the rest is left for the public. I gave up because there seemed to be some truth in this as i never really seen any good bargains.

[Sparkles]

They used to be on some banks web sites and today some posted outside KTB's branch Big C Mae Hia . Try asking Managers. The sceptics will tell you people connected to the banks will get the specials,not sure thats correct.

Edited October 5, 2016 by Sparkles

[Liquorice]

The SIL is an deputy branch manager for Krungthai Bank.

 

Her family rented a house, but the owner/landlord defaulted on payments and the bank (not Krungthai) repossessed the house.

The SIL offered the owner 1 million baht, knowing she was in financial difficulties, before the bank repossessed, but the owner insisted on 1.2 million.

The house went to auction........the SIL found out the highest bid was 800,000.....so she offered 805,000.....SOLD!

It was worth about 1.6 million.

 

Working for a bank certainly has it's advantages when house hunting.

[chiang mai]

50 minutes ago, dotpoom said:

I remember a time when I was looking into buying a property like you are talking about.....I was told  from more than one source that the best bargains are bought up by the bank staff and the rest is left for the public. I gave up because there seemed to be some truth in this as i never really seen any good bargains.

 

Exactly that, it's considered to be a banking benefit here in Thailand.

[SOTIRIOS]

...believe what you want....

 

...'from the horse's mouth'.........any good deals are already spoken for internally.....them and their friends/investors.....

 

...case closed......

 

...lucky if you get an extra soy sauce sachet with your congee around here.....

 

 

[Bulldozer Dawn]

I found the following when looking for foreclosed properties.  It is a page with links to all of the foreclosure listings from 12 of the major Thai banks.

 

There is also a link to the foreclosed properties listed by the Legal Execution Department of Thailand.

 

The page is located here:

 

How to Find Thai Property Foreclosures

 

 

Edited October 5, 2016 by Bulldozer Dawn

[chiang mai]

If you don't believe the banks behaviour regarding the sale of repo's, perhaps you'll think about the sale of government bonds through the banks. Heavily advertised they offer one of the best returns around and are very safe, large tranches are offered from time to time and details of when and where are published in advance.

 

Show up at any Bangkok Bank branch and try to buy one of those bonds , even at the point of opening and you will be met with, "sorry, all sold out".

 

I'm in no way knocking Thailand, banks or the system, you just have to be aware that it's what it is and work around it.

[Think2Mutt]

54 minutes ago, Bulldozer Dawn said:

I found the following when looking for foreclosed properties.  It is a page with links to all of the foreclosure listings from 12 of the major Thai banks.

 

There is also a link to the foreclosed properties listed by the Legal Execution Department of Thailand.

 

The page is located here:

 

How to Find Thai Property Foreclosures

 

 

That should cheer up the 'It's NOT possible to find repo.properties in Thailand' brigade!

[SOUTHERNSTAR]

It works as follows: All the good properties are bought by bank personnel or their contacts. Those properties left are mostly not worth the asking price or have problems, like being occupied. Most banks have these properties on their websites. You can phone them and ask about these properties. They can't sell these properties at a lower price that the mortgage amount. There are thousands of properties standing empty and in disrepair all over the country. Most are worth less than the asking price and are thus not sold. These properties are however at the mortgage amount on the balance sheet of the banks as level 1 assets and is the ticking time bomb in the Thai banking sector. There are many properties in the bad bank since 1997/98 crisis.

[chiang mai]

12 hours ago, Think2Mutt said:

That should cheer up the 'It's NOT possible to find repo.properties in Thailand' brigade!

 

That brigade doesn't exist, what does exist in spades is a brigade who knows it's not possible for the average foreigner to buy repossessed properties in Thailand at a 20%+ discount to market price. Perhaps consider changing your name to Thinknotenough!

[Bulldozer Dawn]

It is possible to buy cheap property via bank foreclosures.  I have done so.  I bought a thai style 2 bedroom home on 60 talangwah just 30 minutes north from phuket on the mainland for 320,000 all in (girl friends name).  You can hear the surf from the back door of the property.  That is its proximity to the beach.

 

I little while back I also snapped up a bargain house and land (girl friends name) over which I now hold a life usufruct.  You can read about that here (I stopped posting in the thread because of the the TV chicken littles telling me the sky would fall):

 

 

For all of the doomsdayers saying that the bank staff and families  buy up all the good stuff...they are just repeating the mantra of other ill informed TV members.  Fact is that nowadays, even Thais with good jobs who work in banks (and their families) are maxed out on credit.  Buying foreclosed properties has become much easier as a result.  Another TV myth is that banks will not drop the asking price.  

 

If you go to the page link below and then visit the kasikorn property site for example, you will see that they have regular "fire sales" on foreclosed properties that are sometimes discounted down more than 50% from the original foreclosure list price:

 

How to find Thai Property Foreclosures

 

 

 

 

[Grubster]

22 hours ago, bark said:

They have been doing it for years.  Most Thai neighbor hoods, will have a few house with Bank signs.

Normally you can save 20-30 percent. But a lot of work to fix them up.

I would rather not own a house or land that one of my new neighbors had taken away from them. No way.

[Grubster]

In my life time I watched well over 50% of all farms in america, either taken by banks or sold by starving owners to big farm operations. There were very few subsidies if any for these small farmers, but now that the big boys own the land massive amounts of subsidies are paid out to them, I think Thailand will follow suit.

[KhonKaenKowboy]

More misinformation on this thread than usual.  Banks will eventually sell for less than is owed.  They are required to do a balancing act on NPLs...slowly clearing them over time. In some cases, they do go up in value.  Consider that if they had really been worth much more than was owed, the borrower would have sold and saved his credit/face.  It is generally easier to get a good deal from a private party.  There is no mass selling of properties to employees and their families, and the banks will commonly reduce prices on unsold inventory.  There are some remnants from 1998, but many are terrible.  You can offer what you want, but it will take time to get an answer.  And, yes, there are fairs at malls occasionally to promote the sales.  A few months ago, I looked at those commercial spaces on the ground floor of Nakorn Ping Condo....3 or 4 units held by 3 or 4 banks...about 600k each...no toilet though.

Edited October 6, 2016 by KhonKaenKowboy

[KhonKaenKowboy]

22 hours ago, Minnehaha said:

 

Discount from what price? I mean, how is the sale price determined? Amount left on the mortgage at time of foreclosure or sale date? Value of the asset on the bank's books? How would you know for sure what that amount it?

 

There are properties around that have bank sale signs on them, as has been pointed out. My experience is that upon inquiry one is told by the team who handles this at the mortgage company the "sale price" and then one is standing at the first question I asked in first paragraph. 

 

In case it is not obvious.... I don't know the answer. But I do know from experience that it is always negotiable and only if one does extremely good due diligence on the asset to determine valuation, can one come close to what 'should' be paid for the property. This is always lower than the list price - 20% , 30%, 50%, or 10%. I have seen it all. 

 

More to the OP question ....

Particularly outside Bangkok, foreclosed properties are auctioned or sold off and quite often it is first offered to friends of the Bank. These guys get first pick, or can call their cousin or friend who gets first pick. This happens and then day of auction POOF! the property listed as for sale is suddenly listed as SOLD and never made it to the block. I would like to be one of these guys who knows the mortgage company / bank because I know there are many opportunities that are not offered publicly. This is especially true when there is a kick back to the bank mgr. 

 

In general, in countries where there is more transparent market forces at play, banks do not want to keep these assets on the balance sheet. THE ARE DEPRECIATING ASSETS as long as they are not kept up or lived in. Banks need to go in the other direction. They cant rent them out or borrow against them. They are dead weight and only cost the bank, so the bank or mortgage company would want to get them off the books. 

In case. You haven't noticed, land prices have gone straight up.....and in most of the old city, the properties would be worth more without the structure on it.  Structures can even appreciate during times of materials and labor inflation.

[meatboy]

21 hours ago, SOTIRIOS said:

...believe what you want....

 

...'from the horse's mouth'.........any good deals are already spoken for internally.....them and their friends/investors.....

 

...case closed......

 

...lucky if you get an extra soy sauce sachet with your congee around here.....

 

 

its no different to gov.share's,the wife went into the bank who was authorised to sell one hr,before sale time. ALL GONE.

[bangkapi]

As a foreigner, you can buy only the condos.  There are auctions and they are conducted on a regular basis in Thai Language. I have participated in two of these auctions. If you buy a property, you must pay all overdue fees and accept it "as is". In other words, it takes some legwork and due diligence to actually get a deal. I found zero "good deals".  I can confirm that the best deals are taken by the bank employees before the flotsam and jetsam proceed to the auctions.

[chiang mai]

4 hours ago, Bulldozer Dawn said:

It is possible to buy cheap property via bank foreclosures.  I have done so.  I bought a thai style 2 bedroom home on 60 talangwah just 30 minutes north from phuket on the mainland for 320,000 all in (girl friends name).  You can hear the surf from the back door of the property.  That is its proximity to the beach.

 

I little while back I also snapped up a bargain house and land (girl friends name) over which I now hold a life usufruct.  You can read about that here (I stopped posting in the thread because of the the TV chicken littles telling me the sky would fall):

 

 

For all of the doomsdayers saying that the bank staff and families  buy up all the good stuff...they are just repeating the mantra of other ill informed TV members.  Fact is that nowadays, even Thais with good jobs who work in banks (and their families) are maxed out on credit.  Buying foreclosed properties has become much easier as a result.  Another TV myth is that banks will not drop the asking price.  

 

If you go to the page link below and then visit the kasikorn property site for example, you will see that they have regular "fire sales" on foreclosed properties that are sometimes discounted down more than 50% from the original foreclosure list price:

 

How to find Thai Property Foreclosures

 

 

 

 

 

No it's not a case of blindly repeating the mantra at all and if you've lived here long enough you will know that's the way it's always mostly been. Now if you are telling us that the current economic climate, combined with high levels of indebtedness of bank staff and an abundance of repossessed properties has changed the balance, that's believable, albeit it's the first time anyone has reported that.

 

As for banks being able to discount book values of NPL's: it's a long standing BOT rule that has never changed as far as I'm aware, if you are then please provide supportive links to confirm that change.  Frankly I seriously doubt that any foreigner has an inside track on Thai bank retail discounting policies albeit one or two TVF posters do work for Thai banks in consultancy roles and they have never raised this issue, the fact that you claim to know differently and consider the obverse TVF myth is suspicious to say the least!

 

And finally, if you were a bank that was overloaded with repo's I think you might want to advertise fire sales also, highlighting those magical words that all Thai's adore, up to 50% discount, whether or not the words are true is a totally different story.