Steps to Purchase a Thailand Resale Property - Secondary Market

Six steps for a smooth transaction - When purchasing property from a private seller on the secondary market

You’ve found a house, villa or condo that you like. So, what’s next? 

Step 1 – Agreement of Terms & Conditions

All parties should understand and agree to the major transaction terms and conditions. For example:

• The purchase price.
• Reservation deposit amount that will secure the property and remove the property from the open market.
• Due Diligence: Will the buyer conduct a due diligence and what time frame?
• Will the reservation deposit be refundable? If so, what are the terms and conditions of the refund?
• What is included in the purchase price? A detailed list of what furniture, fittings, landscaping and artwork that are included in the purchase.
• Taxes and Transfer Fees: What taxes and feesare the buyer and seller responsible for? Is there an estimate of the taxes and fees available?
• What is the completion date for transfer of ownership?

Step 2 - Reservation Agreement

This document outlines the general purchase terms, conditions and timeline related to the purchase.

Step 3 - Reservation Deposit 

A deposit of approximately 5-10% of the purchase price will secure the property and remove it from the open market. The deposit amount varies from market to market. Usually, the deposit is held either by the broker, lawyer or seller.

Step 4 - Sales & Purchase Agreement

Generally,the buyer will have 30 days to review the terms and conditions of the Sales and Purchase Agreement. This agreement contractually outlines the conditions of sale. During this period, buyers have the opportunity to designate an attorney to conduct a legal due diligence on the contract, holding company and or land title deed if so desired. 

Step 5 - Settlement & Transfer 

At this point the parties of the transaction, or their representatives or attorney, will set a transfer date at the government land department. To further facilitate the transfer the buyer will then arrange for the balance of the purchase, minus the deposit, and the seller will present the original ownership documents.

If the buyer is not a resident of Thailand the funds must be transferred into the country from an overseas bank account.The receiving bank in Thailand provides a FET (Foreign Exchange Transfer) form. This form is a requirement of the land office when registering ownership for foreigners buying property here. When foreigners  sell their Thailand property they can show the FET form as proof of the funds coming into the country which is a bank requirement when repatriating sales proceeds out of Thailand.  In many cases if the owner or buyer or both are not locally based, they will appoint a representative through a Power of Attorney to execute the transfer on their behalf. 

The handover of ownership and payment can be through telegraphic transfer (typically to a legal representative’s account) at which point a cashier’s cheque will be drafted and presented by the buyer or their representative once the property has been officially transferred at the Land Department.

Step 6 - Handover

At the time the ownership is transferred the keys and ownership documents will be given to the buyer. The new owners name and details will be registered with the PEA (Provincial Electricity Authority) and, if applicable, the building or project Juristic Department for the next billing cycle of CAM fees and electricity. 

Now that the basics covered, your Siam Real Estate representative can assist you to find the best property in Thailand for you!