Purchasing From a Private Seller - The Process

Purchasing a property on the secondary market from a private seller can be summarized into 6 simple steps. 

Step 1 - Agreement of terms and conditions

Ensure all parties understand and agree the major terms and conditions of the transaction such as:

  • The purchase price
  • Reservation deposit value that will remove the property from the open market
  • Will the buyer conduct a due diligence? 
  • If so, will the reservation deposit be refundable? Subject to which terms and conditions?
  • What is included in the purchase price? Any furniture or fittings?
  • Taxes and transfer fees - what is the buyer responsible for and what is the seller responsible for? 
  • What will be the completion date for transfer of ownership?

Step 2 - Reservation Agreement

This document outlines the general purchase terms, conditions and timeline associated with the pending purchase.

Step 3 - Reservation Deposit 

A deposit of approximately 5-10% of the purchase price (varies from market to market) will secure the property of interest removing it from the open market. It is common practice for this deposit to be held either by the broker, lawyer or seller.

Step 4 - Sales and Purchase Agreement

Typically you will have 30 days to review the terms and conditions of the Sales and Purchase Agreement which contractually outlines the conditions of sale. During this period, buyers have the option to appoint an attorney in order to conduct a legal due diligence on the contract, holding company and or land title deed. 

Step 5 - Settlement & Transfer 

Parties to the transaction (or their representatives - agent/lawyer) will set a transfer date at the government land department. The buyer will prepare funds for the balance of the purchase (minus deposit) and the seller will present the original ownership documents to facilitate the transfer. It is common for the buyer, seller or even both parties to appoint a representative through a Power of Attorney to execute the transfer on their behalf. 

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

Step 6 - Handover

With the ownership now transferred, keys and ownership documents will be provided to the buyer. The new owners name and details will be registered with the PEA (Provincial Electricity Authority) and the building or projects Juristic Department (if applicable) for the next billing cycle of CAM fees/electricity. 

You’ve found a project by a reputable Developer with a history of delivering projects on time.  You want it, so what’s next? 

Step 1 - Unit selection and agreement of terms and conditions 

Generally there is little to no flexibility in developer pricing. Some Developers may be slightly flexible on payment plans or include (or discount) a furniture package. Make sure you understand the position of the desired unit in the project and what facilities/features immediately surround it. 

Ensure all parties understand and agree the major terms and conditions of the transaction such as:

  • The purchase price
  • Reservation deposit value that will remove the property from the open market
  • Will the buyer conduct a due diligence?
  • If so, will the reservation deposit be refundable? Subject to which terms and conditions?
  • What is included in the purchase price? Any furniture or fittings?
  • Taxes and transfer fees - what is the buyer responsible for and what is the developer responsible for? 
  • What is the payment schedule for upcoming payments?
  • What is the projected completion date for the project and what penalties are in place if the Developer is late?

Developer Due Diligence

Step 2 - Reservation Agreement

This document is provided by the developer and outlines the general purchase terms and timeline agreed above that are associated with your investment. 

Step 3 - Reservation Deposit 

A deposit of approximately 2% of the purchase price (varies from developer to developer and market to market) will secure the unit of interest removing it from the open market. Some deposits are refundable subject to legal due diligence. Ensure that you work with the Developer to obtain a payment slip for the transfer. 

Step 4 - Sales and Purchase Agreement

Typically you will have 30 days to review the terms and conditions of the Sales and Purchase Agreement which contractually outlines the complete overview of the project and details of the unit you are purchasing.

Step 5 - 1st Contract Payment 

This payment can range anywhere between 20-40% of the purchase price. For non-residents of Thailand the funds must be transferred into the country from an overseas bank account.

Step 6 - Payment Instalments

Depending on where the project is in the build cycle, your next payment will be linked to milestones in the construction progress. Rough dates can be provided by the developer but a payment should be linked to completion of critical advancements in the project. Again, payment must come from overseas. 

Step 7 - Snag List

Two to three weeks prior to handover a snag list will be created to correct any defects in the property prior to handover. 

Step 8 - Transfer

When the build is finished the Developer will serve a notice to complete. You’ll pay the rest of the purchase amount and the property is yours. You are not required to be in Thailand to complete the handover process. This can be executed by a 3rd party on your behalf. 

Now that we've got the basics covered, time to narrow down the best market in Thailand for you!

Did this answer your question?