Tips for buying Off-Plan
Buying off plan in the current climate may seem to be a more risky proposition than buying a finished property, but it is still the way most new condo units and hosues are sold and although the market is slow and the business climate concerning to some buyers, one only has to look back at the 1997 crisis to see that it appeared to be much worse at that time, at least considering thing so in the current cycle.
So what can be done to ensure that any purchase off plan can be successful and without pitfals? The first thing to look at is your total risk in regard to the deposit amount being paid whilst the building is under construction. Try to get the longest payment period with the minimum amount of down payment and then you can be assured that your risk has been kept as low as possible. Of course developers are now angling for exactly the opposite, eager to make use of deposit of funds in order to secure bank borrowing or even directly using it instead.
Typically a 2 or 3 year payment plan would not be unreasonable to be offered in a Bangkok condo project in the early stages of its build cycle or even in its planning stage. Look to pay a down payment of 10000 or 20000 just to secure the property and 7 or 14 days later to pay an initial amount in the 50000 to 200000 range. This will be where the contract is formed and thereafter monthly payments will be the only thing to pay for. These should be modest, typically around 0,5% to 1% of the property purchase price. Thus it can be seen that even at the end of the term your total outlay should not be more than 15 to 20% of the purchase price and by this time the project should be completed anyway.
For those looking for extra peace of mind it may be worth waiting at least for the developer to break ground and complete foundation work. In this way it can be seen that some commitment has been made not only by the developer but also by all other people ocncerned. All of these payment plans do of course rely on the developer being well regarded and bonefide. So how can you tell if this is the case? Well there are a few companies providing back ground checks. Whilst fees might be considered by some buyers to be an extra expense, in thouse circumstances where a large investment is being made it could well be worth researching these various independent due dilligence agencies with a view to ensuring the developer or seller is in good shape.
Other things to look out for are previous projects built by the same developer. These should not only give you good confidence going forward, but it will also enable you to asses the quality of build plus the management and upkeep that occured after the building was completed.
In the end, buying Bangkok condos off plan need not be a difficult or risky experience and with developers currently looking to sell new projects, some great bargains can be found.
Written by sillyfrank on November 26th, 2009 with
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