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How to buy a condo - procedure & checklist


Last edited: May 07, 2014 at 13:13:01

How to buy a good condo?

After completing the first steps:

  1. sourcing a condo
  2. negotiating a deal
You can start up the procedure for all the necessary paperwork involved:
  1. doing the paperwork
  2. transferring the title deed

 

3. Procedure and Paperwork

The documents needed for the transfer are rather straightforward:
- The seller needs to produce a letter from the management office;
- The buyer needs to produce a form or letter from the bank.

If buyer and seller produce the right forms and follow the right procedure, all should go smoothly. Problems, if any, mostly occur due to an inadequate letter from the bank, and sometimes due to an incorrect Power of Attorney in case the owner has sent a representative.
To make everything as smooth as possible and avoid wasting time at the land registry office, just follow this checklist.
There is no system of escrow in Thailand, and you are not obliged to go through a lawyer. Buyer and seller simply go to the Lands Registry Office and transfer, with or without lawyers or agents.


Steps for the buyer

1. Transfer money from abroad to an account in Thailand which is in your own name and, if possible, upon sending, add the remark (in a purpose field): 'purchase of condominium'. This will classify the incoming money for this purpose, else the monetary authorities may freeze it for a few days to investigate it if they suspect money laundering or something alike.
2. The money transferred should be a bit more than the purchase price you are going to report to the land registry office.
3. For your own benefit, better transfer it in foreign currency so don’t change the money into baht before sending it over. This may save you on the exchange rate, also it somehow looks better on the form from the bank that you need to submit to the land registry office.
4. Finally, don’t transfer the money in separate lots but transfer the entire sum in one go.
5. After the money has arrived, go to your bank and ask for a form that proves that the money has been transferred into your account. (If you have signed a Purchase Agreement, just bring a copy and also a copy of the title deed.)
5a. If the money exceeds a certain threshold (USD 50,000 as of now, but this value may be raised in the future) the bank will use a standard form which has fields that just need to be filled out. Often it's called Foreign Exchange Transaction Form, but it may differ between banks.
Example here: form above USD 20,000.
This form will normally be accepted by the Land Registry Office without any problems.
5b. If the money you sent is less than the threshold value or there are other irregular circumstances, the bank may not be able to issue the form, and has to write a letter proving the transfer. The problem is that the wording of the letter is not fixed so that the officer in charge at the Land Registry Office may not accept it, because he/she is in a bad mood or for whatever reason.
Here is an example of a bank letter that has a big risk of being rejected, for several reasons: there is both handwriting and typing on it, the amounts have been corrected with tape, and perhaps some of the wordings just don't please the officer in charge.
If the officer in charge does not accept the letter, then you’ll waste a lot of time going back and forth between the land office and the bank.
Some banks, however, have forms even for the amount under the threshold value (example: form below USD 20,000).
Every bank is different and the minimum for a specific form is likely to be raised over time, but remember that you prefer to have the standard form rather than a written letter.
6. Ask the bank for a so-called inward remittance form. This will facilitate sending out the money after you eventually sell the condo.
7. Ask for a cheque (cashier order) at the bank in name of the buyer for the remaining sum (purchase price minus deposit).
8. Take some cash too, as you need that to pay for the aggregate of fees during the transfer. More on the aggregate of fees.
 

Steps for the seller

Go to the management office of your building and tell them you are going to sell your unit, to whom (foreigner or Thai) and when. They will require you to pay all outstanding common area fees, water and electricity bills, insurance and any other bills outstanding between you and the building up until the planned transfer date, and often they will include the entire calendar month.
They will then issue a letter addressed to the Land Registry Office which content holds two important points:
1. you have paid all outstanding bills
2. the percentage of foreign ownership that will result as a consequence of the transfer.
Normally, this letter is okay and there are no problems with it. The management office may need a few days for this to prepare.
 
When all this paperwork is done, you are both ready to go to the Land Registry office for the transfer.
 

4. Transfer of Title Deed

1. Transfer of the title deed takes place at the Land Registry Office. It's open on any weekday between 8:30am and 5pm. The waiting time to complete the transfer can be anywhere between 1.5 and 5 hours, so it's best not to go too late. What is the best day and time differs, but we recommend to avoid Monday mornings. If you come too late in the afternoon, the queu may be closed already for that day. There are some ways to reduce your waiting time.
2. Take someone with you whom you trust who can check if your name is really on the title deed, which is entirely in Thai. Someone you can trust is generally not the manager of the building.
3. As a preparation, both parties should obviously bring 2-3 copies of their (valid) passport including (valid) visa stamp pages, and the original title deed.
4. Besides that, it's best to prepare yourself what value you are going to report. More on reported value and fees.
5. After the transfer is completed, as the buyer of the property, you should keep the papers issued by the land office, of course the title deed itself but also a white A4 paper that specifies the reported value and the amount of taxes. You may need this form later, when you sell the condo and want to send the money out of the country.
 
 
You can use all these points as a checklist or framework to work with. However, there are many more factors that constitute a good buy and that can help you to avoid problems and unnecessary risk. We offer full assistance through Property Pal.


Copyright: Chiang Mai Locator
DISCLAIMER: Any information about property on these pages reflects the personal opinion of our financial reporter and is meant purely informatively. No claim is made as to the exact accuracy of facts and figures nor about any future returns you can make by investing in property in Chiang Mai. Investing or di-vesting Thai property is not without risk, and the risk is to be assumed by you as an investor, and you only. Neither our financial reporter nor this site accept any responsibility to your financial decisions, which you make alone.
 

 

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