by Asia Villas 2017-11-11

The increasing popularity of Thailand as a work or retirement destination is leading many foreigners to explore the option of purchasing a property in the country. With the right support, the process is relatively straight forward and - given it is such a well-trodden path - there are many agencies who are more than capable of navigating the journey for you.


1. Choosing the Perfect Support Partner

2. Planning Legal Checks

3. Title Investigation

4. Paying a Deposit

5. Review of Contracts


1. Choosing the Perfect Support Partner


Once you have chosen the type of property you are interested in, or even if you are still in that early decision phase, it is more than worth finding a dedicated agent to facilitate the process.


Asia Villas have been operating in the region for many years with a wealth of experience across all property types. Once you decide to kick off your search, your best option is to talk to one of our representatives and benefit from their expertise.


The property market in Thailand is significantly less regulated than most other markets so having a trusted and competent partner is vital to guarantee a smooth journey. By working with a reliable company, you will not only receive specialist advice on the best region and property type for you, you can also expect ongoing support throughout the entire purchasing process.


Upfront guidance ensures simplicity, helping purchasers avoid common pitfalls and costly mistakes through a local understanding and assistance with the language.


2. Planning Legal Checks


Purchasing a property in Thailand will feel unfamiliar to anyone who has purchased real estate in another market. The buyer assumes complete liability for all preliminary checks, so be sure to take the necessary steps prior to making any financial commitment.


Finding a trusted legal representative who has local knowledge will help establish the correct course of action and outline the steps that you must take prior to proceeding. It is vital you understand how to protect yourself from any scams as these can be commonplace among less experienced buyers.


The process will vary depending on whether you are buying a condominium, standalone villa or plot, so be sure to liaise with you lawyer to understand specific requirements in each case, or refer to our article on property ownership in Thailand for further guidance.


3. Title Investigation


The first item to review is that the vendor has the legal right to sell the property. Many properties are built without the necessary permits, which would be an immediate red flag. Your lawyer must check that this property is recognised by the Land Registry Department, that it is free to be sold, and that it has no any existing mortgage or lease arrangements.


Once you have established the property is legally available for sale, you are free to make an offer but must first establish clear contractual terms before putting down a deposit. Plots and properties can include land-development restrictions – such as height limitations or ‘no development’ clauses - within their title deeds that you may not establish until your lawyer has carried out a full property search. Clauses that stipulate ‘subject to clear title’ or specific ‘exit clauses’ guarantee that the vendor will return the deposit should the search turn up any irregularities.


Title deeds in Thailand vary to a great degree so having a lawyer who possesses detailed knowledge of the specific region will help avoid misunderstandings at this early stage, potentially saving hundreds of thousands of dollars.


4. Paying a Deposit


As with most property transactions, the vendor will request a deposit up front. This is standard practice - and no issue - provided you have included the aforementioned clauses. 


In general, expect to pay a deposit of 10-to-15 percent and do not be surprised if this goes straight into the account of the vendor. Escrow arrangements are rare in Thailand, which is why it is doubly important you trust both the seller and your legal support. 


With the correct contractual set up and sufficient due diligence prior to the transfer, this should not present any issues. It is worth patience prior to making this financial commitment, however, as you will only have your deposit returned if the seller pulls out, or subject to the contractual terms.


Be sure to keep a receipt of the deposit and establish credit against the purchase so that the deposit amount comes off the final purchase price. It is not uncommon for this to cause grounds for dispute if not clarified from the outset.


5. Review of Contracts


The final element to understand is that the seller will likely draw up the sale contract. This is common practice so your lawyer will have to comb through the clauses to ensure there is nothing hidden and that everything is above board. The contract needs to cover items such as payment terms and completion dates, after which point you will have to transfer the remaining funds.


At this stage, it is worth noting Thai property taxes. Buyers are liable for a transfer fee of 2 percent of the registered price of any purchase. Be sure to request a full overview of the potential taxes from your lawyer while in the budgeting phase to avoid any financial complications later on.


Once in agreement – and you have finalised outstanding mortgage negotiations – you are free to sign the contract. At this point, your lawyer must attend the Land Department to register the sale. 


Congratulations! You are now the legally-recognised owner of a property in Thailand.


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As with any large financial commitment, the process can seem daunting at first. Though there is complexity in purchasing property abroad – with added unknowns given the lack of regulation in the Thai market in particular – buyers should not be put off pursuing their dream.


By contacting Asia Villas, it is easy to understand the process and clarify doubts. Once you are aware of the necessary considerations when purchasing a property, the process becomes a lot less intimidating.


Feel free to get in touch today and set the ball rolling on your dream home in paradise.