Buy condo on auction? And general advices about buying a condo

[cecca]

Curious to know if anyone here has experience on buying a condo on auction. How does it work and is it worth it?

Is legal execution department the only place to look for such auctions or there are more?

Can I partecipate directly as a foreigner or do I need a thai nominee?

This would be my first condo in Thailand so also looking for general advices about buying a condo. What should I be careful about?

What are the papers to bring to Land Office for the change of ownership and how long does it take? How to change from thai quota to foreigner quota assuming foreigner quota is available?

What's the range for maintenance fees in different condos? Where I stay now is 30thb/sqm/month which translates to approximately 1.5 months of rent, possible to find something less expensive?

[Love_to_eat_Thai]

No idea about auctions in Thailand, but there are heaps for sale if you go talk to some local agents.

Same cautions in Thailand apply as in most any other country, location, noise, build quality, maintenance, fees, building management (Juristic) competence and financial state.  Due to oversupply there is very little growth in condo prices, so negotiate hard on price, but don't expect to make any profit if you have to sell later.

The agent you use will walk you through the process, the paperwork is pretty much a copy of your passport, the purchase agreement and FET form from the bank to show the money came in to Thailand from abroad as well as a cashier's cheque for the declared property value.  The seller will arrange a letter from the Juristic to show there's no outstanding fees and that it's within the foreign quota for the building.

The process at the land office takes at least an hour, buyer and seller sign about a dozen forms all in Thai, you go pay the transfer tax/fee and take the receipt back and await for the chant to be updated into your name (in Thai).  You get the blue book, keys, etc. after you hand over the cheque to the seller after you leave the land office.

Ask at the Juristic what the maintenance fees are.  10b/sqm/m is the cheapest I found, but I've heard some of the newer builds are outrageous.

[gusincebu]

Don't have any advice for you, just curious about this " auction" ? 

Is it online , or physically onsite ? 

Though I don't really follow real estate that much, I've never heard of a property auction here ( with the exception of one which was a whole condominium building of derelict units , about 8 years ago ) . 

[Fired Up Paul]

4 minutes ago, gusincebu said:

Though I don't really follow real estate that much, I've never heard of a property auction here

Same.

Just sale by private treaty here as far as I ever heard.

[Fired Up Paul]

16 minutes ago, Love_to_eat_Thai said:

The seller will arrange a letter from the Juristic to show there's no outstanding fees and that it's within the foreign quota for the building.

The process at the land office takes at least an hour, buyer and seller sign about a dozen forms all in Thai, you go pay the transfer tax/fee and take the receipt back and await for the chant to be updated into your name (in Thai).

To save on Tax, some people arrange 2 x prices. The agreed to price and the Land Office price - the latter being smaller but no smaller than the condo has ever been sold for in the past. The tax is paid for by the seller in cash and the difference is often split between the buyer and seller.

[kd_traveller]

The best advice I can give is go and talk to a number of the longer established foreign owned estate agents.  When I was looking I found them all very helpful, even if they had not got what I was looking for they were very willing to explain the process and each one provided additional advice and background as to how things work in Thailand.

This advice included how as Fired up Paul explained that there can be two prices for the land office, how the foreign quota works and if a property can be transferred to this quota.  The Juristic office will know if any condo space is available to be transferred and agents keeping in contact with various Juristic Offices will know this.

It is also usual in Pattaya for many agents to be selling the same property and not always at the same price!

If you are dealing with a reliable estate agent they will have contacts within the Land Office and that process only takes a couple of hours.

 

[penboy]

The auction that I have heard about arise from ''repossessions''. This happens when the owner has fallen behind with the maintenance fees on their condo. The juristic office do the relevant legal steps, condo gets sold, fees get paid and the difference is held until owner or next of kin turn up.

Auctions are not well advertised and from what I hear difficult for farangs to get involved (not sure why). Also heard that there is a place on Theprassit road in Jomtien where the auction takes place.

I'll be following this thread with interest (I like a bargain if possible)   and hopefully someone will a good understanding or actual experience will be able to chip in. 

[Jebb]

Alex @Essexlad79 at Runway Bar has had extensive experience in Real Estate and may be able to give good advice.

[cecca]

4 hours ago, Love_to_eat_Thai said:

No idea about auctions in Thailand, but there are heaps for sale if you go talk to some local agents.

Same cautions in Thailand apply as in most any other country, location, noise, build quality, maintenance, fees, building management (Juristic) competence and financial state.  Due to oversupply there is very little growth in condo prices, so negotiate hard on price, but don't expect to make any profit if you have to sell later.

The agent you use will walk you through the process, the paperwork is pretty much a copy of your passport, the purchase agreement and FET form from the bank to show the money came in to Thailand from abroad as well as a cashier's cheque for the declared property value.  The seller will arrange a letter from the Juristic to show there's no outstanding fees and that it's within the foreign quota for the building.

The process at the land office takes at least an hour, buyer and seller sign about a dozen forms all in Thai, you go pay the transfer tax/fee and take the receipt back and await for the chant to be updated into your name (in Thai).  You get the blue book, keys, etc. after you hand over the cheque to the seller after you leave the land office.

Ask at the Juristic what the maintenance fees are.  10b/sqm/m is the cheapest I found, but I've heard some of the newer builds are outrageous.

If that's all I have to do I don't think an agent is necessary, what's their cut normally? I guess somewhere between 1-3%? That's a lot of money for not much work.

Do I necessarily have to trasfer the money to my thai bank first? Do I risk any tax payment request on that?

What if I transfer directly to seller account after signing purchase agreement and they provide FET from their bank? Would that work?

[cecca]

4 hours ago, gusincebu said:

Don't have any advice for you, just curious about this " auction" ? 

Is it online , or physically onsite ? 

Though I don't really follow real estate that much, I've never heard of a property auction here ( with the exception of one which was a whole condominium building of derelict units , about 8 years ago ) . 

On the website of the Legal Execution Department you can see all the property for sale, starting price and auction date.

I think you have to book your participation and partecipate physically, I'm not really sure about the exact procedure. 

[kd_traveller]

19 minutes ago, cecca said:

If that's all I have to do I don't think an agent is necessary, what's their cut normally? I guess somewhere between 1-3%? That's a lot of money for not much work.

The agent involved is usually the Sales agent on behalf of the seller so you don't have any say in whether you use one or not!

The choice for you is whether you wish to employ a lawyer to check all the documentation is correct, after all it is written in Thai, so you would have to fully trust the sales agent that all is correct and as the process is relatively straight forward, it is up to you whether you employ a lawyer or not.  A sales agent or usually a Thai member of staff will go with you and possibly the seller if they have not given the sales agent power of attorney to act on their behalf. At the land office it is all very straight forward.

From experience, cheques have to be used for the final payment although an EFT may be used for the deposit.  However, you cannot send funds directly to the seller, they have to go through your bank first as the bank has to issue a certificate confirming that the funds have originated overseas for the agreed amount at the land office. The land office also wanted sight of the cheque, so an EFT is not possible!

As I stated earlier a few short visits to a number of agents will be able to answer all your questions probably way better than many on this forum as with Thailand procedures can change often and they will be the ones most up to date on what is currently required. If you don't wish to fully trust an agent then you have the option of employing a local Thai lawyer to act on your behalf.

[Harry Brown]

Do banks do cheques these days?  I thought an EFT into the property conveyancer account the bank would want to know the reason for the transfer , which would not be that hard to show. 

[Essexlad79]

1 hour ago, Jebb said:

Alex @Essexlad79 at Runway Bar has had extensive experience in Real Estate and may be able to give good advice.

Thanks mate I did previously work for one of the bigger agents in town. I have to say auction properties seem to be mainly a Thai affair here  as it’s the banks that repossess properties and the lenders sell them on and I havent seen many advertised at all. The auction house someone mentioned is called Collingbournes but I have never seen any properties  advertised on  their website.

As someone else mentioned an agent is paid by the Seller and they generally charge between 3% - 5% of the sale price.

Most importantly you need a lawyer that can do all the necessary due diligence as their is a Language difference ; they need to check that the condo for example is the individual’s to sell and that there are no outstanding maintenance charges as potentially you could be liable if these aren’t changed prior to transfer. 
 

The document that’s important to obtain from the bank was called a Tor Tor Sam that proves the money came in from abroad for the purpose of buying a property. In the event that it’s sold in the future it would give you the ability to repatriate the funds to your own country. 
 

Obviously there is a lot of talk about the potential tax implications if you reside in Thailand for longer than 180 Days but as of now these still haven’t been finalized or published in the Gazette. 
 

My advice would be to decide which area that you want to live in and visit the particular condominiums to see if there are units being offered for sale privately along with what’s available through agents to get a feel for pricing. 
 

With regard to Thai / Foreign ownership then that’s down to what’s available on the quota in that particular building. I have heard of units moving from Thai / Foreign ownership but there would be some costs for doing so as Foreign ownership units typically command a premium. You would need to consult the Juristic to see if it’s possible and what the cost would be. 
 

Usually the transfer taxes are split 50/50 between Seller / Buyer but again that’s down to the deal that you agree. 
 

 

Edited July 2, 2024 by Essexlad79
Grammar

[cecca]

6 hours ago, Fired Up Paul said:

To save on Tax, some people arrange 2 x prices. The agreed to price and the Land Office price - the latter being smaller but no smaller than the condo has ever been sold for in the past. The tax is paid for by the seller in cash and the difference is often split between the buyer and seller.

Wouldn't that mean huge taxes on the huge (fake) gain you had from the condo if next buyer doesn't agree on that?

And how seller is guaranteed to receive price 2 if on official documents only price 1 appears?

[kd_traveller]

2 hours ago, cecca said:

And how seller is guaranteed to receive price 2 if on official documents only price 1 appears?

Because you have a contract of sale!

 

2 hours ago, cecca said:

Wouldn't that mean huge taxes on the huge (fake) gain you had from the condo if next buyer doesn't agree on that?

It is a land tax price not an income tax price and apparently the land tax price more on the land value rather than the condo value.

[kd_traveller]

3 hours ago, Harry Brown said:

Do banks do cheques these days?  I thought an EFT into the property conveyancer account the bank would want to know the reason for the transfer , which would not be that hard to show. 

Yes bank cheques still exist in Thailand and cost only 20 or 40 baht each, whereas an EFT between Kasikorn and Bangkok Bank had a 600baht fee.  Makes no sense!

The cheque is needed at the land office as they wish to see a cheque for the land value and a certificate from the bank confirming that the funds for the transfer originated from overseas.

[manni2011]

I know in the past there was a listing of foreclosed properties on the Bangkok Bank website (obviously all in Thai). Supposedly you could also go into a local branch and request a listing of their foreclosed properties.  I have no idea if this is still currently the case.  

[cecca]

10 hours ago, Essexlad79 said:

Usually the transfer taxes are split 50/50 between Seller / Buyer but again that’s down to the deal that you agree. 

Do you mean the transfer fee of 2%? Should I expect them to ask me to pay more than that? I think other taxes such as business tax and witholding tax should only apply to seller

[Essexlad79]

54 minutes ago, cecca said:

Do you mean the transfer fee of 2%? Should I expect them to ask me to pay more than that? I think other taxes such as business tax and witholding tax should only apply to seller

TAX	WHICH PARTY NORMALLY PAYS	AMOUNT
Transfer fee	Buyer	2% of registered value
Stamp Duty	Seller	0.5% of registered value
Withholding Tax	Seller	1% of appraised value or registered sale value (whichever is higher)
Business Tax	Seller	3.3% of appraised value or registered sale value (whichever is higher)

 

[cecca]

2 hours ago, Essexlad79 said:

TAX	WHICH PARTY NORMALLY PAYS	AMOUNT
Transfer fee	Buyer	2% of registered value
Stamp Duty	Seller	0.5% of registered value
Withholding Tax	Seller	1% of appraised value or registered sale value (whichever is higher)
Business Tax	Seller	3.3% of appraised value or registered sale value (whichever is higher)

 

Yep that's what I was thinking, I'm already dealing for a condo and the agent asking me to pay all of that.

They are not really being very specific, just asking me to pay a sum that amount to approximately 5.3% of the accorded price.

Is that common?

[Fired Up Paul]

12 hours ago, manni2011 said:

I know in the past there was a listing of foreclosed properties on the Bangkok Bank website (obviously all in Thai). Supposedly you could also go into a local branch and request a listing of their foreclosed properties.  I have no idea if this is still currently the case

I've seen this in the past too although you'd probably get a blank stare from a local branch if you started to make enquiries.

Too add: a lot of the discussion at the time indicated that Thai Banks don't write-down the values of these properties to protect their balance sheet. As well, sometimes banks have provided loans for not only the property but within the same loan, turned a blind eye to the inclusion of extras such as furniture or vehicles.

So you really need to know your valuations.

 

[Fired Up Paul]

17 hours ago, Essexlad79 said:

With regard to Thai / Foreign ownership then that’s down to what’s available on the quota in that particular building. I have heard of units moving from Thai / Foreign ownership but there would be some costs for doing so as Foreign ownership units typically command a premium. You would need to consult the Juristic to see if it’s possible and what the cost would be. 

The costs are minimal (ask me how I know) but the gains are substantial - Foreign quota units are usually between 7-15% higher than Thai/Company. The market is also bigger (more buyers) in buildings with mid-to-high market value as a lot of foreign buyers would never consider a company owned condo - foreign all the way. So selling can be easier and quicker.

Typically, the Agent will discuss with the Juristic who will prepare the paperwork and the either side could pay the small fee and its all done within a few days of the sale as the paperwork has to be presented to the Land Office

[cecca]

On 02/07/2024 at 10:54, Fired Up Paul said:

To save on Tax, some people arrange 2 x prices. The agreed to price and the Land Office price - the latter being smaller but no smaller than the condo has ever been sold for in the past. The tax is paid for by the seller in cash and the difference is often split between the buyer and seller.

Taxes are paid on the values estimated by land office or am I missing something?

[Fired Up Paul]

16 hours ago, cecca said:

Taxes are paid on the values estimated by land office or am I missing something?

See the table above or speak to an experienced Agent or the Land Office.

I'm happy to share my experiences here, especially those that are little known and may be beneficial to you but I don't purport to be an expert.

The process here is more straightforward than buying or selling in my home country but things can and do go wrong. Make sure the Thai spelling of your name is correct and you have the correct Lot Number on the Tor Tor Sam.

[cecca]

On 03/07/2024 at 10:22, Fired Up Paul said:

small fee

The condo I'm looking at would charge 50k for such paperwork, @Essexlad79 maybe you can tell me if this is legal and if I can do anything to avoid this fee?