Mistakes When Purchasing A Property In Thailand

Purchasing a property in Thailand can be a great financial and lifestyle choice for foreigners. However, it’s important to avoid costly mistakes. 

To help you, we’ve listed the top 5 mistakes to help with avoiding property pitfalls in Thailand.

Not Doing a Title Search

A title search checks a property’s history, tracing back to its first owner and recorded at the provincial Land Department. This ensures you’re getting what you pay for before purchasing a property in Thailand.

What does a title search tell you?

• If the seller has a clear and legal title to the land
• If there are any mortgages, leases, liens, or other charges against the property
• Information on zoning and environmental/planning codes

Why is a title search important?

• Just like you wouldn’t buy a bike or car without ownership paperwork, you need to verify the seller has a clear and legal title before purchasing a property in Thailand.
• These can affect your right to use the land. Even a valid lease won’t be terminated by transfer of ownership.
• Especially important in beachfront areas with various restrictions.

Buying Without a Lawyer

Here are a few Thailand real estate buying errors against purchasing a property in Thailand without a lawyer. Even simple purchases need legal attention.

Why do you need a lawyer?

• You’re doing a business deal in a foreign country with a different language, legal system, and culture.
• As a foreigner, you might not be familiar with Thai contracts.
• A lawyer will guide you through the process of purchasing a property in Thailand, ensuring you understand everything.
• They safeguard your investment and provide peace of mind.
• Legal experts have more knowledge and experience.

Considerations when hiring a lawyer:

• Their experience in real estate/contract law
• Independent reviews of the law firm
• Legal fees can vary, so compare options

Using the Wrong Real Estate Agent

Common property buying mistakes in Thailand don’t need a licence. Lack of professionalism, newness to Phuket or real estate, or unscrupulous behaviour can be issues.

Questions to find a good real estate agent:

• How long have they worked in real estate?
• How long have they lived in Phuket?
• What area of real estate do they specialise in?
• How long has their agency been operating, and is it registered in Thailand?
• Can you speak to former clients?
• Do they have independent reviews?

Ourvillas is a well-established agency in Phuket. Our staff has over 10 years of experience living in Phuket and over 5 years working in Phuket property. Contact us to learn how we can help with purchasing a property in Thailand.

Buying into a Mismanaged Project

You can often spot mismanagement at the entrance of the property. Make sure to check for this before purchasing a property in Thailand. Poor upkeep is a red flag, and management companies can change, continuing the same issues.

What causes property mismanagement?

• Lack of knowledge, expertise, and awareness of local conditions
• Taking on purchasing a property in Thailand beyond the company’s capabilities
• Insufficient cash flow
• Greed

How can it affect you as a buyer?

• Delays in completion or non-completion
• Issues affecting the design and aesthetics
• Use of inadequate building materials before purchasing a property in Thailand
• Problems after completion, like design faults or broken fixtures

Which property developer should you choose?

• Do due diligence on any developer, before purchasing a property in Thailand by looking at their previous projects and financial standing.
• Ask your agent for insights, or hire a lawyer to find this information.

Pros and cons of larger development companies:

Pros:

• Higher levels of capital and credibility
• More transparent transactions
• Knowledge and experience to ensure timely completion
• Fewer commercial risks

Cons:

• Fixed, non-negotiable prices
• Less flexibility in design and customization
• Less personalised attention

Pros and cons of new development companies:

Pros:

• More appealing rates
• More flexibility for individual needs
• More eager to please

Cons:

• Limited capabilities and less experience
• Less professional staff

Making a Decision Based on Price Alone

Everyone wants a good deal, but the price alone of purchasing a property in Thailand shouldn’t be the deciding factor.

Issues with cheap properties

• Often constructed with low-quality materials and unskilled labour.
• Potential problems with the surrounding area, like loud nightclubs, flooding, or nearby construction projects.

Sometimes, purchasing a property in Thailand just above your budget offers the best value. For a small percentage more, you might get better maintenance, easy access to transport, a corner unit, or other benefits that make the property more convenient and easier to sell later.

How to assess value for money?

• Research properties in the area to understand the market.
• A knowledgeable agent can provide insights into the local market.

Purchasing a property in Thailand can be a rewarding experience, but it’s important to avoid common mistakes to protect your investment. By conducting thorough title searches, hiring a lawyer, choosing a reliable real estate agent, avoiding mismanaged projects, and considering more than just the price, you can make a smart purchase in Phuket.

Frequently Asked Questions