In the past, we have seen negative reporting about people who came on holiday to Phuket, then rushed into a property purchase, only to have a change of heart.
Some of these buyers made a purchase based purely on emotion, only to later have second thoughts; other buyers belatedly realised that at least some of the information they were given about their purchase was misleading.
Whatever the circumstances, they were dismayed to find they could not get their deposit back.
Reservation deposits are common practice, but you should never pay one without first seeking the advice of both a professional real estate advisor, and an experienced Thai lawyer.
If you are harboring any doubts about your agent, it is especially important that you hold off on the deposit until you have sought legal advice. You must be 100% confident that your representatives are protecting your interests.
This is will be immediately evident when it comes to discussions of the reservation deposit. A reputable real estate advisor and an experienced lawyer will insist on any deposit be refundable, thus protecting you if you have cause to change to your mind.
Furthermore, no seller/agent should object to the buyer being offered sufficient time so that their lawyer may scrutinize the agreement, thus ensuring that a refundable deposit, as well as other vital clauses, are present in the agreement and clearly worded.
Don’t Forget Due Diligence When Buying Phuket Property
The reservation deposit and reviewing the sales and purchase agreement are just the start of the due diligence a good lawyer can conduct on your behalf.
Conducting the Necessary Due Diligence When Buying Real Estate in Phuket
Before any deposit is paid, it is imperative that you or your lawyer check the title deed. If this is not done prior to paying the deposit, the bare minimum before proceeding to the next step in the sales process should be a thorough scrutinizing of the clear title deed.
Your lawyer should be doing everything possible to make sure that the law is on your side. If anything that would justify cancelling the purchase is turned up during the due diligence, then you are protected.
Such an exit clause must be worded clearly to ensure the seller or developer is compelled by law to return your deposit should anything be amiss.
Your lawyer may further advise you as to other clauses which may be necessary. These may concern your specific circumstances, or the development or property you are looking at.
If you’d like to learn a little more about what due diligence is you can read our article here:
Understanding the Importance of Due Diligence and Exactly What Due Diligence is When Buying Real Estate in Phuket
Try To Avoid Acting With Urgency
The property sector in Phuket remains extremely buoyant, and there are amazing deals to be found for anyone who takes the time to look.
Knowingly making a hasty decision can mean you fall prey to an agent with a “quick buck” mentality, who sees your eagerness as opportunity to make an easy sale.
Phuket has new developments being constructed all the time for your consideration. Rushing into a property purchase or buying on impulse are not the right recipes for a successful investment.
You Must Find an Experienced Lawyer
If your decision to buy is going to be made on the spur of the moment, it is important to engage a good lawyer. He/She will be able to build some of the aforementioned safeguards into your agreement.
The Importance of Sound Legal Advice When Buying Property in Phuket
In short, always make sure your interests are protected before you transfer any deposit money.
You can read some of our related Phuket real estate articles here:
China’s Spending Spree on Phuket Real Estate
Owning a Freehold Hotel-Licensed Condominium in Thailand
Reasons to Invest in Phuket Property for New and Experienced Investors
An Overview on Phuket Property Prices
Condominiums Explained – What is a Condominium?
Owning a Freehold Condominium through an Offshore Company
Using a Thai Company Limited to Purchase a Leasehold Condo Unit
What is a Condominium Sinking Fund?
What is the Common Area and the Common Area Fee?
The Different Types of Property in Phuket
Is Thailand Alone? How Many Countries in the World Prohibit Foreign Ownership of Land?