First time home buyer tips, helpful and interesting for real estate in Thailand.
Real estate is one of the most profitable, historic, and sustainable investment platforms of all time worldwide. And like every other business domain, success requires a proper understanding of the basic concepts, early planning, and great discipline.
Interest in the real estate market is on the rise with many not only thinking it’s a sign of adulthood and financial responsibility but also looking to join for the financial benefits. That said, buying your first home is a big deal and shouldn’t be done in a rush.
Moreover, purchasing a villa, condo or any real estate in a lucrative market like Thailand’s may be even trickier for a foreigner. That’s why you may want to take a close look at the following first-time home buying tips to help set you on a path to success.
Check Your Financial Situation
After deciding the time is right for you to go down the road of homeownership, you must look at checking and working on your financial readiness. Yes, you may have dozens of reasons to buy your first home, from the desire to settle down long-term to the appeal of low mortgage rates. But first, you must pull out your credit report and score to see where you stand like 12 months out.
During this check, identify and sort out any past due accounts or errors that might have gone to collections. Such liabilities may be problematic later if you need a home loan to assist with your purchase. In case you find an issue, contact the creditor and try to get it solved. Your credit score may not be as key in securing a mortgage loan in Thailand because it requires that you are a citizen, an owner of Thai limited company, or have certain marital benefits.
However, it would generally feel good to have a financially sound record and zero debts before moving for your first home purchase. There are many free credit monitoring services like credit karma and TransUnion which can help pull out your credit report.
Set a Budget and Stick to It
Before you ever dive into the market, it’s always very important to iron out questions like the most you can afford, and the perfect price bracket for you.
Take a look at your finances with some professional support from maybe your bank to get a better view of what will be an ideal range for you. With this budget in mind, you can survey the market so that you have a clearer idea about the kind of options within your price bracket.
During your calculations, make sure you factor in the total cost of the home including legal fees, maintenance, and closing costs. Don’t find it difficult to walk away from a house you love if it doesn’t fall within your set budget.
Start Saving Early for Your Down Payments and Closing Costs
You can be sure that becoming a homeowner especially in a foreign country isn’t cheap. Maintenance and upkeep are just some of your responsibilities and saving early for the down payments and closing costs will better prepare you for the process. Homeowning expenses can add up really fast, thus, making it advisable to be debt free and in possession of an emergency fund before you go out to make your first home purchase.
A weekly or monthly savings plan may require that you cut your expenditure on clothing, travel and other luxuries but will definitely take you towards the figure you need to make that first dream real estate buy.
Hire an Expert Property Agent with Experience in the Market and Area
The realtor you choose to hire may be a make or break point in your home buying experience. Remember you are looking to buy property in a foreign country and definitely need the best local assistance. The agent from properties away, will be familiar with the market and geographical area in addition to being able to communicate in Thai. He/she will be by your side from the beginning until the closing and even beyond saving you valuable time in selecting and showing you the available property within your price range and needs.
Sellers in Thailand generally offer quality sales at fixed prices. So, buying directly from the developer, eliminating the agent won’t save you any extra money. Instead, the liaison they offer, advice on market conditions, obtaining a fair price for you, and acting in your interest through the whole process are services you don’t want to miss.
Any Questions about your dream real estate?
Legal Planning and Ownership Options
Don’t forget you are spending a fortune to acquire this property, so it’s important to understand your ownership options and plan your steps carefully. The legal process in Thailand only allows a foreigner to own a condominium in his/her name. Make sure you sit with a lawyer or solicitor to iron out the legal process before signing any deposit agreement or contract.
If you wish to get land to build a house, you must acquire a long-term lease on the land which can’t exceed 30 years for each term but which is renewable. After securing the lease, you must then apply for permission to construct the house in your name. Through this method, you own the house and will have secured a long-term lease on the land.
The terms of the lease contract can be written allowing for reassignment to someone else if you sell, the possibility of subleasing, and a purchase option in case the law changes in the future to permit foreigners to acquire freehold ownership. A lease is, therefore, the most common legal route used by foreigners to acquire property in Thailand.
Research Neighborhoods that Best Fit What You Are Looking For
Of course, you will be looking for homes for sale within you decided price range. However, the property alone shouldn’t make your mind up. A NAR (National Association of Realtors) survey showed that 78% of homebuyers value neighborhood quality over the size of the home and for good reason. Also, 57% of buyers would prefer a shorter commute to a large yard, further highlighting the importance of location and neighborhood quality.
Your real estate agent from properties away, is usually better placed to help you with information such as the crime rates and quality of education around prospective neighborhoods. The noise levels, traffic conditions and other features of the area at different times of the day are also important. Make sure you choose a neighborhood you and your family will enjoy living in.
Summary of the Property Purchase Process
After succeeding to identify the land you would like to lease in Thailand, you have to get the process right to avoid future complications. First, a title investigation should be the direction you look to. This involves a comprehensive examination of the title deed as recorded at the Land Department. It will help you verify whether the Seller has the legal title of the land before you can move on with a contractual agreement.
This investigation will also reveal any registered interests on the land like liens and mortgages plus verification of your access to the property form applicable residential zoning, environmental, and planning codes in the area. It’s good to make sure you will be allowed to construct on the land.
When you are satisfied with a property after checking it out, you will be required to make a deposit as a sign of your desire to continue the process. As soon as this is done, the Seller reserves the property and commences with drawing up the purchase contracts. At this point, the deposit is usually non-refundable, unless there’s a special “get out” clause is written in the deposit agreement.
After the seller prepares the contracts, its advisable to have a lawyer or solicitor go through the terms and conditions detailly to make sure your interests are well protected. It’s common to have a penalty clause, in case you are late with the payment. That said, your schedule of payment should be reasonable and practical.
The first payment is usually around 25% before being completed progressively; For instance, 25% as soon as the roof is on, 25% upon securing the doors and windows, and the last 25% when the fittings and fixtures are completed.
If you have digested the tips above, you are definitely ready to get en-route towards your first property in Thailand. Just pay attention to detail and you will find the seemingly bumpy ride a lot smoother.