5 ways to lose your money when buying property in Thailand

Charmed by Thailand, many expats look forward to owning a property. Whether it’s your retirement plan or you want to own a vacation house at your pleasure, make an informed buying decision. Property deals can easily stretch to millions of Bahts! Unless you are careful to avoid the pitfalls, you can eventually lose money when buying a property. Of course, you don’t want that to happen! Check out these top 5 mistakes that can cost you while buying a property in Thailand.

1. Buying without a real estate agent: Sometimes, buyers think that hiring a real estate agent would be costly. They think that it is better to handle the property transaction on their own. However, this kind of mindset can prove to be extremely costly.

For starters, a seller may overprice the property, causing you to lose money. Sellers usually take advantage in these cases where you are not aware of the median price of the property. They may also want to get off a disputed property from their shoulder.

This is where the agent can help save you money. The agent will negotiate with the seller on your behalf and verify if the property is fit for sale. A competent agent will also scout the area and compare those properties which may not be listed online. It is a usual notion to conduct a tour of the property before buying. If you find that impossible since you are a foreign national, your agent will guide you through the tour via a video call.

2. Buying from a mismanaged project: Since the demand for property in Thailand has risen, many new developers have entered the scene. They may not follow building regulations, and the projects may not have credible management. In contrast, established builders are often publicly listed, and they follow a credible property management schedule. Buying from mismanaged projects can ultimately fall below your expectations of the property. They may show you a made-up image of the property when you buy, and when you buy the actual property, you might find it overpriced.

3. Losing the initial deposit: The usual process of a property transaction would involve putting an initial deposit with the seller. On receiving this deposit, the seller would proceed with the rest of the property purchase and work on the details of the acquisition. However, in case you decide not to go forward with the deal, you may lose the initial deposit. It is usually 10 to 15 % of the purchase price of the property.

Therefore, on your part, you should make sure that the initial deposit has an “exit clause” that makes it refundable. It can be subject to a clear title or subject to agreement terms, and so on. If you do not have this “exit clause,” you are going to lose money buying property in Thailand.

4. Buying a disputed property: This usually happens if you are not careful to conduct a title search on the property before making the initial deposit. The title search will trace back the property to its first owner and show if the property has any liens or mortgages with it.

5. Buying a property only based on price: You might be tempted to buy a property only based on its low price, but it’s probably going to cost you. Check out all other aspects of the property and investigate why it is offered at a relatively lower price. Your local agent can conduct thorough research on the property and provide you with an honest overview. Otherwise, remember that less may actually be more in real estate deals.

IBG property is an established real estate service in Thailand. We facilitate deals in condominiums and villas. We will conduct all legal procedures to help you get your desired property.