Thailand Conveyancers

Looking to buy property in Thailand? In some countries, there is a growing trend towards a ‘build then sell’ off-plan system. This involves the buyer putting down a deposit of 10% into a designated escrow account. This account would normally be with the same bank which finances the development.

This will provide confidence to the lending bank on the amount of pre-sales achieved and therefore more willing to inject equity to the developer as needed. The remaining amount will then be paid by the buyer within ninety days of delivery of vacant possession of the property together with the relevant certificate of fitness of occupation. The deposit and interest earned in the escrow account then goes to the developer simultaneously with the remaining balance.

There are many critics both in Thailand and abroad that say such a method will mean smaller developers will have very little chance of succeeding. They are critically dependent on the installment payments from their buyers in order to complete the project. Therefore, it is a question of balancing between the security of the buyer versus the integrity and viability of the developer. Being a small developer does not mean it will be difficult to obtain external financing. Lenders are supportive of viable projects rather than simply the size of the developer. Having an external lender also creates more confidence in buyers where they know the project will not be dependent solely on the funds paid by them and other buyers.

Another possible benefit of this system is that developers are forced to be more careful in carrying out their feasibility studies before embarking on any new projects. This cautious approach will also inherently mean that lenders are more willing to support projects which have conducted meticulous viability audits on their projects. In fact, it can be argued that banks would be more willing to finance completed or near completed houses or condominiums where buyers are already in line rather than the current precarious practice of the ‘sell then build’ system.

If you are looking at buying or investing in property in Thailand then speak to our conveyancers in Thailand about what the laws are of Thailand with regards to foreign ownership and how best to secure your property investments in Thailand. Call our property conveyancers in Thailand now for a chat about your real estate.