Pitfalls

There are many ways to throw away your savings. Here are five of thousands of such examples. The people affected are ordinary people with one thing in common: they underestimated the risks and overestimated their own ability. That is a dangerous combination in any country, including Thailand.

Read about other people's mistakes and how to avoid them:

• Unlicensed operators in the sun
• The do-it-yourself buyer
• The house that did not exist
• The developer with no money
• A shock increase for the condominium buyer

Holiday workers and unlicensed brokers are not unusual. A friendly private individual offers to help you broker homes at "good prices". Unfortunately, many buyers accept that they work without work permits and without paying tax as long as they believe they are getting a bargain. A polished website is no guarantee.

The risks with an unlicensed broker include:

• Your money is handled in private accounts
• You may also be affected if the Thai Revenue Department intervenes
• Competence is missing, with the risks that brings
• You can never assert your rights if something goes wrong

Example client
By the hotel pool, Goran and Yvonne met their "broker". He was pleasant and showed them several apartments he had for sale. Despite a chaotic and confusing viewing, they decided to buy. A contract was written and payment handed over.

When they moved in, it became clear that they had bought a different, inferior apartment from the one agreed. The "broker's" response was: "I am as surprised as you are, but unfortunately I cannot do anything."

Note: the names are fictitious.

People who complete a property purchase themselves are at risk. The most common case is a couple where one partner is Thai. Many believe that language skills and being native-born are enough for a secure purchase, which is entirely wrong. Education, experience and knowledge are needed to get everything right in a property transaction. How much do you know yourself about Swedish property law, laws on lost documents or planning and building law?

Example client
Bjorn and Ing-Marie had spent a great deal of time in Thailand and had several Thai friends. When they found their dream cottage, they received help buying the house and preparing a land lease. Everything was fine until the landowner became ill and had to sell the land. When the new owner increased the lease fee fivefold, it became clear that the lease had never been registered at the Land Office. Bjorn and Ing-Marie eventually gave up and left their house. Cost: SEK 780,000.

Note: the names are fictitious.

This Thai couple took out a loan and bought their dream house. Despite a high level of education, they did not know which documents a buyer must check and request before a purchase. It is hard to blame them too much. How much does an average Swede know about Swedish property law, laws on lost documents or planning and building law?

Example client
Eeek and Noi were one day informed that the house they had bought several years earlier would be demolished. It lacked the documentation required for buildings. ERA was engaged, obtained the necessary documents and completed the relevant registrations retrospectively. The cost was only ERA's fee and a few sleepless nights.

Note: the names are fictitious.

Projects are a common source of problems. The buyer commits to a purchase and pays according to a fixed schedule, almost always without an understanding of financing, ownership or other important economic facts. Unfortunately, our view is that Swedes are more naive than most other nationalities.

Example client
While looking for a house in Thailand, Ulf and Katharina found a cosy house that had everything: the right price, the right location, and it was due to be finished by their next holiday. Shortly after the third payment, construction stopped. The Swedish builder, without its own financing, had to cease all operations. The bank sold the land and buildings at auction. Cost: SEK 520,000.

Note: the names are fictitious.

Risks also exist in condominium transactions, although they are less common. Problems can concern ownership documents or certificates needed to transfer ownership. Some buyers also believe they have bought an apartment when they have in fact received only a rental agreement.

Example client
Thomas answered an advertisement for a nice apartment for sale at a reasonable price. A pleasant English "broker" showed him the apartment and Thomas decided to proceed. He signed a contract and paid a 30% deposit, around SEK 290,000. At the Land Office, it emerged that the apartment had recently been mortgaged. As the contract was worded, Thomas had no protection. He chose to redeem the lender for a further SEK 350,000.

Note: the names are fictitious.

Buy through an ERA Oakfield property agent
When you choose ERA Oakfield Thailand, you are well supported. We have the expertise and experience to guide you correctly. Our working routines and control processes help avoid risks and mistakes. There is a reason why Thai private clients, developers and investors come to us for advice and assistance.

Engage an international law firm
Use a reputable international law firm in Bangkok. It is not cheap, but you get what you pay for. Avoid local operators and anyone connected to a seller or a project. Do not engage acquaintances or friends.

Use common sense
A third piece of advice is always to use common sense. Ask questions and request documentation, work permits and company information from the person with whom you plan to do business. Recognise your limitations.