Buying property in Thailand has many potential pitfalls so remember not to just buy with your heart; buy with your head too. All too often people get carried away with the romantic idea of a property in Thailand and overlook certain important details.
Thailand is fast becoming the destination of choice for foreigners who wish to buy holiday and retirement homes; or indeed for foreigners who wish to make Thailand their home.
In this short guide I try to point out some of the pitfalls buyers face when purchasing a property in Hua Hin.
- Buy with your head and not your heart
- Find the right real estate agent
- Do your homework
- Check the quality of the Construction
- Find a good lawyer
- Consider the Surrounding Area
- Check other development’s sales prices
- Make a will
- Check the Land Title Deed
- How can a foreigner buy property in Thailand?
Step 1 – Buy with your head and not your heart
Buying your dream property in Thailand is to make a choice to improve your lifestyle, however there are some important factors that require consideration.
Hua Hin has become the destination of choice for couples who wish to retire or buy a holiday home (or simply those who wish to invest) in Thailand. This should act as a guide to enable clients to navigate any pitfalls that occur during the purchasing of a property.
Step 2 – Find the right real estate agent
Estate agents in Thailand are unregulated so it’s wise to exercise caution as anyone can set up as a real estate agent without any prior experience. I myself had little knowledge of the real estate business in Thailand prior to coming here 11 years ago.
It is a fact that some agents of questionable professionalism will push clients towards buying on a particular development due to the fact that they have been offered a higher rate of sales commission or get bonuses depending on how many properties that they sell on a particular development, so be careful if it feels as if an agent is pushing you towards buying on one or two particular developments. They might not have shown you some of the other developments in your price range which may fit better with your criteria.
TCH adopts a strict policy of working to an exemplary level of professionalism and ethical standards and will promote properties fairly, without misrepresentation. We will remain fully impartial in relation to the promotion of property developments, or properties in a similar price range.
As commission rates are unregulated, developments are able to pay agents any rate of sales commission they deem necessary in order to generate viewings & sales but with commission rates being unregulated some developers will use this to create a sales bias which is not in the best interest of buyers. TCH will remain consistently ethical and professional, working for the clients’ best interests, without unfairly promoting developments giving the highest commission at the expense of impartial advice to buyers.
Step 3 – Do your homework
We are so fortunate to have the internet these days, so use it!
Remember the old saying that if it appears too good to be true, then it probably is.
Research the internet.
Don’t be too impulsive and don’t be pushed into buying, take your time and look around.
Research the area that you want to live in and rent a car to drive around for a day to check things out.
When you have found the development that you feel is right for you, research the development name and the developers name on the internet. Look for a local expat forum and ask questions regarding the development / developer and go back to the development on your own and knock on doors asking for the experiences of previous buyers; people really don’t mind.
Sales and estate maintenance is often issue and again, by talking to residents who already live on the development, or have resided at a previous development by the same developer, will give you some insight into this.
It is important to find a development in which you feel comfortable.
Step 4 – Check the quality of the Construction
There are many professional looking, well-finished properties in Thailand but remember that there is little in the way of building and planning regulations and to construct a property in Thailand with a solid concrete slab floor and a steel box section roof supporting ring beam is a much cheaper and quicker option which makes it attractive to developers but in the long run may not be so beneficial to the buyer.
In our opinion it is better to buy a property that is constructed with:-
Q-Con Superblock is a building material that combines lightweight with high strength and provides a number of advantages over alternative building materials through superior properties such as thermal insulation, acoustic dampening and fire resistance. The manufacturing process forms the micro-cellular structure, which gives the material its lightweight and excellent insulation.
Concrete and Steel Roof Supporting Ring Beam
In the past properties in Thailand had light weight sheet roofing so there was no necessity for the construction of a full concrete and steel ring beam to support the weight of the roof but with the introduction of concrete roof tiles and the enormous weights involved we are of the opinion that a full concrete and steel constructed ring beam is essential.
It was usual with a light weight roof to spot weld steel box sections to the rebar sticking out of the top of the concrete support columns but this system used with a heavy roof coupled with the high winds that we experience in Thailand during tropical storms could cause movement to the property and increase the likelihood of stress cracking in the walls and at worst a total failure of the roof if the welds to the rebar are not completed to a high standard.
Suspended Concrete Floor with piped pest control system
The construction of a suspended concrete floor uses pre-cast concrete planks laid across the ground beam and creates and air space under the floor which reduces the risk of rising damp and eliminates the risk of the floor breaking or sinking due to ground subsidence. It also allows for under floor piped pest control to be installed in the air space below the floor to eliminate a termite nest.
Solid floors are generally quicker and cheaper to construct making them an attractive option to a developer but in the long run may not be the best option for the buyer.
A typical way of constructing a solid floor would be to backfill the area within the ground beam with soil, then compress it and then cover it with a layer of concrete. To ensure a level finish to the floor, a layer of screed is added over the top of the concrete which consists of sand and cement. A suitable gauge damp proof membrane must be used.
The damp proof membrane should be lapped on to the damp proof course in the external walls and, if relevant, internal walls around the floor. The use of a high quality damp proof membrane is essential to combat rising damp. (It is essential that you inquire as to the standard of damp proof membrane used if the developer is constructing a solid floor)
Moisture: If not properly sealed on both the top and bottom surfaces the concrete will be very susceptible to penetration by moisture. If liquid does manage to make its way into the pores of a concrete floor it will lead to the concrete degrading over a period of time.
The other possible failure of a solid concrete floor is sinking or cracking which is an indication of ground subsidence below the floor (when the ground sinks due to movement of underground material).
The likely causes of a sinking or cracking floor is due to the flooding of the ground caused by the high volume of rain water during tropical storms, leakage from broken pipes (such as water, sewer, storm water drainage) or a poorly compacted fill prior to the pouring of the concrete floor.
Termites under House Slab
Subterranean termites can live up to 18 inches below ground. Some species’ nests can have a radius of up to 340 feet. These means that a subterranean termite nest could be located beneath a home.
The control of a termite nest under a solid, concrete floor foundation that does not have a basement or air space is very difficult.
To control a termite infestation underneath a solid concrete floor a pest control professional typically will recommend a termiticide treatment that can be applied through rods reaching under the house or holes drilled directly through the slab. This can be very disruptive, costly and time-consuming, especially if you have tiled floors.
Electric Conduit in the Roof Space
For safety issues and rodent problems it is essential that the electric wiring is run inside plastic conduit. This avoids that unsightly confusion of leads that sometimes occurs on developments.
UPVC / Aluminium / Wood Windows and Doors
Check the quality as the quality of UPVC windows and doors as this can vary greatly. Many products these days are manufactured in China and the level of quality can vary greatly. The same applies to aluminium and properties with external wood windows and doors. Poor quality fittings can result in constant maintenance.
Step 5 – Find a good lawyer
Always get a local lawyer and not necessarily the one which is recommended by the agent or the developer.
A lawyer in your home country may not have the required experience dealing with legal matters in Thailand, so again do your homework and research local Lawyers on the internet or local expat forums.
Before signing contracts make sure that a comprehensive examination of the title deed is recorded at the Land Department. It is important to verify that the seller has clear and legal title of the land before entering into any contractual agreement.
Make sure that you have in writing that any deposit paid to take a plot from sale prior to signing contracts is fully refundable, for example “subject to a clear title”
A title search will trace the land to the original owner as well as checking for any encumbrances such as liens, leases or mortgages on the title.
It is possible for individuals to purchase a property in Thailand without the services of a lawyer, however, this may be risky unless you are familiar with the country, its language and its legal system. Contracts in Thailand do not always adhere to the international standards and may be different from the buyer’s home country.
As a foreigner you cannot own land in Thailand, please see “Buying Options” on this website for further information.
Step 6 – Consider the Surrounding Area
You must be aware of the surrounding areas in general to the development so as to avoid blockage of views from other buildings. If you are going to purchase on a development then please remember that there is little in the way of planning permissions in Thailand and something may be built next to the development in the future which could block your view. It is generally safer to buy a property that looks inwards to the development as it safeguards your view in the future.
Also be aware as to the area in which you plan to buy; if you have little or no local knowledge use the internet and local forums to research and ask questions. In an ideal world you should be able to rely on the local knowledge and professionalism of the real estate agent showing you the property but unfortunately you will often be driven to the development of the agent’s choice on a route that is complimentary to the area.
Step 7 – Check other developments sales prices
There are many variables involved when evaluating the price. In general, a buyer can check the prices of other developments in their price range and that would give them a fairly good idea whether they are paying too much for a property.
Don’t forget that properties can look good and seem incredibly inexpensive when compared to properties in your home country but looks can be deceiving as there can be a massive difference in build quality.
In my opinion there are 1st and 2nd generation properties available in Hua Hin. First generation properties tend to be of a lesser build quality with little or no thought as to any Eco solutions or running costs resulting in re-sale prices being affected.
Until just a few years ago Thailand was years behind the standards that many Europeans were used to but not any longer as most items are now available.
In recent times 2nd generation properties can have solar power, rainwater harvesting, UPVC double glazed window and doors, LED lighting and many more ECO solutions which should make re sales of these properties more desirable and move towards a sustainable future.
So although the initial sales price maybe slightly higher it could prove to be a wise decision in the long run as utility bills will be lower and the re-sale price should be higher.
Step 8 – Make a will
It is recommended that you have a Last will and Testament prepared in both your home country and in Thailand that includes your newly purchased property. It is not a pleasant thought to think of your demise, however the last thing you want to do is cause additional stress to your family during this period. Your property in Thailand is part of your assets once you sign the contract and make an initial payment, hence even before the handover of the property you will have an asset to consider for your estate planning.
The Lawyer who is involved in your purchase will be able to assist you with this.
Step 9 – Check the Land Title Deed
If buying by way of lease who is the leaser? A private Thai national or a limited company? If you are a private individual what is the provision made in the event of their death? Who will inherent the lease? Should they leave Thailand and a break-down of their personal or business relationship with the developer? This could have serious repercussions should you wish to sell your property at some point in the future or if your children inherent the property.
Freehold Title Deed – Chanote
This type of title grants the holder of this document full rights over the land, to deal with or to use it to the exclusion of others, this type of title deed is the safest and most credible title deed to hold.
Nor Sor 3 Gor
- A land ‘awaiting’ a full title deed is granted the document Nor Sor 3 gor.
- The land is measured by the Land Department; therefore, it has its exact boundaries.
- This type of land may be sold, transferred, leased or mortgaged in the same manner as land with freehold title deed (Chanote)
- In order to change the title to a Chanote, the owner of the land may file a petition to the Land Department to file a request to change it to a full title deed (Chanote), and the Land Department may do so if there is no opposition made against the petition.
- Nor Sor 3
- The difference between this type of land title deed and the Nor Sor 3 Gor is that a land with Nor Sor 3 title has never yet been measured by the Land Department; hence the land has no exact boundaries.
- The Nor Sor 3 title may later be switched to a Nor Sor 3 Gor then subsequently transform to that title to a freehold title deed (Chanote) in the future.
Step 10 – How can a foreigner buy property in Thailand?
The maximum length a lease can be registered at the land office is 30 years and it is normal that most developments will sign 2 further lease extensions giving you in effect 90 years. If you were to sell the property, the new owners can re-assign your lease into their name but they would only have the remaining period of your original lease left to run or they can request a new 30-year lease in their own name, hoever that would mean paying again for a new lease. This cost is normally divided equally between the buyer and the seller. In the case of your demise, if your children are left the property in your will (it is advisable to make a will in Thailand) then the lease can be re-assigned in their names.
Company Set Up
This was at one time a popular way for many foreigners to own their homes in Thailand. As a foreigner you can only hold 49% of the shares, Thai nationals are required to hold the remaining 51%. So you need a Thai partner or Thai friends with sufficient funds to invest in the purchase and to hold those shares as nominee shareholders are not permitted in Thailand and the land office in Hua Hin is no longer accepting the formation of a company to buy property with the use of nominee shareholders. Another down side to this arrangement are the possible high costs involved and there are annual balance sheet fees to be paid every year. It is still possible to buy a resale property that was bought within a company set up as the new regulations we understand are not being back dated but we recommend that you take good independent legal advice before considering this way of purchasing property.
Only a Thai national can own land in Thailand. If your partner is Thai you can transfer the land into their name but as always, we recommend that you take good independent legal advice before considering this way of purchasing property.