If you are considering buying a property in Thailand then it is wise to be aware of the payment terms for the sake of planning. These differ whether you are buying a unit off plan or unit that has already been built.
For the case of resales condominium units, the process is relatively straightforward. Once a sale price has been agreed between the buyer and seller, the buyer is required to pay a deposit to the seller.
The percentage of which forms part of the negotiation but one percent is considered to be a normal figure. At the same time, both parties sign the sales and purchase agreement which details the sale transaction and change of ownership including payment terms.
The transfer of ownership goes through once the full selling price has been paid to the seller in the form of a cashier’s cheque and when the new owners’ name is registered on the property’s titles deed. This happens at the local land office and is the official point of transfer of ownership.
For foreigner investors, a foreign exchange document is also required for any payment coming from outside of Thailand as per the Condominium Act.
Since off plan projects are purchased ahead of the building being completed, the process varies slightly. It is often the case that the sale of the units fund the construction of the condominium too so it is recommended to buy from a reputable developer for a less risky investment. Whilst the payment plan will be dictated by the developer, typically a reservation fee is paid to secure a unit.
Next, the first deposit is due to between 10 and 20 percent which is paid once the sales agreement is signed. Going forward, the buyer must pay instalments throughout the construction phase with the final lump sum payment of usually 50 percent of the sales price, due once the condominium is finished which is when the new owner can be registered on the title deeds.
This staggered payment system opens up speculative investors and those who need time to finance their purchase. Since the price is determined on the exact size of the unit, it might be that once the condominium has been built that this amount will vary every so slightly thus affecting the price.
The land office will measure each unit upon completion and this figure is used to alter the price, assuming that there is a relevant clause in the sales and purchase relating to this.
Read more insights about Bangkok property market and home tips, check out DDproperty Property Index Report, DDproperty Property Market Outlook Report and Property guides