Exchange rates on foreign Condo purchase

[Jimmy Canuck]

Hi all, buying a new (almost finished) condo in Cha am, next step would be 5% deposit, paying directly to the developer. Am worried about whether we would be given a fair competitive exchange rate - ie the banks posted rate? A difference of 1 baht to the $Can (it's around 31 now I think) on a MB3.9 buy would translate to over 100K Baht, so wonder if any of you who have been through this can advise? Also, contract says money transfer fees payed by buyer.. prob minor charges? I will pose the question to the developer, but response would have to be binding somehow... Chav + Finch want 60K + 7% to go over contract, search title on land, register our interest @ Land Office. We are leaning toward saving that $ for furnishing the place. As Radisson Blu have signed a contract now to start building their 5* resort on the same (Samudra) property, I imagine their lawyers have inspected the Title on the development's land carefully already, and it seems the developers will register our interest as part of the contract, which states that it is a Foreign Ownership Freehold purchase. Does this all sound pretty much ok? Would really like to avoid dropping 64K on legals... Thanks so much, I owe quite a few of you guys a drink or something by now. Jimmy Canuck.

[Big Boy]

I don't know the answers, but can I ask you a question please? Would you buy a house in your home country without legal assistance?

[TypicallyTropical]

I second what Big Boy said. In addition, get a copy of the Thai Condominium Law called "Condominium Act, (No. 4), B. E. 2551 (2008)" and read it too! There are very strict laws for a foreigner condo purchase in Thailand, including opening a designated bank account and such. Spending your 64K THB on legal help is peanuts compared to the 4M THB purchase price and will be the best money you ever spent.

[Top Croc]

Common sense. Get everything checked by the legal people. There are several out there. I use C & F and have found them fair and efficient. Not the cheapest but in such important issues a sound investment.

You are assuming the developer has done his home work. Be funny if C & F found otherwise.

[Nereus]

Legally you cannot, as a Foreigner, register a Condo in your name without providing a Certificate of Foreign Funds Transfer, (forgotten the name of the document), provided by a Thai Bank.

Be very very careful, as you are not here, how do you know just what the developer is up to???

For me, you cannot do any of this without either being here, or appointing a Lawyer with Power of Attorney.

[bcrglobal]

Agree with all the above--don't buy without legal representation, it's just silly.

In terms of the best exchange rate for large transactions, if you don't mind carrying a case of cash, Super Rich in Bangkok generally gives a far better rate than anywhere else. The downside is that you have to carry the cash in and out.

Todays rates at Superrich are Buy: 30.90 Sell: 31.40
Compare this to the banks: Bangkok--30:51/31.57
TMB: 30.46/31.65
SCB: 30.51/31.69

Although the banks offer different rates for transfers--you'd probably need to check with each bank about their conversion rate calculations and incoming transfer fees to understand (Something the local branches are unlikely to be able to explain)

[hhfarang]

I don't know the answers, but can I ask you a question please? Would you buy a house in your home country without legal assistance?

Yes, I bought four houses I owned in the U.S. without legal assistance other than an escrow company. Three of those were bought from a sale by owner with no lawyers or realtors involved (just a handshake and a form contract from a stationary store, filled in and signed while sitting at the kitchen table together) and I had no problems with any of them. I also bought the land my home is on here without legal assistance and contracted to have the house built without legal assistance. I did have problems with the contractor that caused a huge delay in the completion of the house, but the one page contract I signed with them contained a delay penalty clause so I came out about even financially. I'm not sure a lawyer could have helped the work get done any faster.

However, having said that, you should probably err on the side of caution, especially in Thailand, and especially since there doesn't seem to be any escrow companies here.

My problem is that I think lawyers are blood sucking parasites that prey on the insecurities and problems of others (if they are unsuccessful at that, they go into politics ). I refuse to use one unless I feel it is absolutely necessary. I've had representation a couple of times when I actually went to court and I've used lawyers to draw up wills in both the U.S. and here. Other than that, I can't ever remember needing one.

[TypicallyTropical]

I bought four houses I owned in the U.S. without legal assistance other than an escrow company.

That's legal assistance. Escrow companies do title search, secure the itle insurance for you, do the lien search, prorate such things as property tax and various other fees & dues, and use an attorney to prepare the deed for conveyance recordation. I wouldn't buy anything without a warranty deed and the use of an escrow company.

[Big Boy]

I don't know the answers, but can I ask you a question please? Would you buy a house in your home country without legal assistance?

Yes, I bought four houses I owned in the U.S. without legal assistance other than an escrow company. Three of those were bought from a sale by owner with no lawyers or realtors involved (just a handshake and a form contract from a stationary store, filled in and signed while sitting at the kitchen table together)

Maybe you were lucky, or maybe the rest of the world is being brainwashed that we need legal assistance. For me, it was peace of mind.

For me, I haven't bought in Thailand yet, but that will change next year (I hope). I wouldn't dream of buying without some sort of protection/guidance. I don't know the relevant laws in my own country, and I certainly don't know them all in Thailand.

Simply trawl through the property section of this forum. Most people with a grievance thought that they could go it alone, and then started complaining when it all went wrong.

Jimmy Canuck, whatever route you take, I wish you well. Please share your experiences with the rest of us so that others can learn.

[PeteC]

I bought four houses I owned in the U.S. without legal assistance other than an escrow company.

That's legal assistance. Escrow companies do title search, secure the itle insurance for you, do the lien search, prorate such things as property tax and various other fees & dues, and use an attorney to prepare the deed for conveyance recordation. I wouldn't buy anything without a warranty deed and the use of an escrow company.

Me also. Never used an attorney to buy or sell, just an escrow company and bank review when financing was involved. Pete

[Super Joe]

The use of Escrow accounts is not mandatory for developers in Thailand yet though, although they introduced the Escrow Act in 2008. Obviously as it's severely 'cash-flow' restrictive, developers do not embrace it generally, do these large Bangkok condo developers use it much anyone know?

If/when it does come in it will wipe out half the businesses I would have thought, and leave the big boys to whack their prices up. But better protection all round, gets rid of the shysters, but also the cheap and cheerful small outfits

Can't ever see it to be honest, Thailand is not exactly 'regulation city' when it comes to the construction industry, but could see it if there was some concerted effort by these big boys to 'persuade' their government pals to do something about it.

I think I'd rather pay 50-60k for legal fees once in a bluemoon when I move, than a lot more than that from a less competitive market. On the other hand no-one wants to see anyone ripped off.


SJ

[Super Joe]

Hi all, buying a new (almost finished) condo in Cha am, next step would be 5% deposit, paying directly to the developer. Am worried about whether we would be given a fair competitive exchange rate - ie the banks posted rate?

As the developer/lawyer or whichever account you choose will be obtaining the foreign exchange transfer certificate (or whatever they're called) for you, I can't see that they can do anything with the bank's actual exchange rate your Canadian Dollars (French Francs? ) got exchanged at.

I take it you are aware of the very strict requirement regarding these 'bank transfer certs', they are the documents you will need to present at the land office in order for you to 'qualify' for the 49% 'foreign ownership quota' units, and the right to register your name on the title document. I'm not sure how different your situation will be as you'll have a Thai joint-owner with you, but normally the following criteria needs to be adhered to:
1) You must present all the bank certs at land office when registering, and these must add up to the total purchase price.
2) The funds must come in as non-Baht currency, and must be exchanged into Baht at receiving Thai bank, ie: no dollar-dollar.
3) Whichever name/s will be registered on the title, must be the exact same name of the sending bank account, or the receiving bank account. Ie: your name on one of the banks either end. So if you sent it from a company account like 'John Smith & Sons Co', or a personal account like 'Mr J.Smith', and it's going to the developer, then 'John Smith' could not register the property.
4) Normally with joint-owners the sending or receiving bank needs to be a joint bank account in both names, or at least have a reference on every transfer stating the names. Got a feeling this would be different for a Thai national and not required, but worth checking out.
5) Every transfer to be reference 'Funds to purchase condominium x,y,z'
6) There was certain limits before a bank would issue the certs, like must be 20k USD or more, but I read now you can get them for transfers of just hundreds of dollars. But no doubt would be up to each bank.

Sorry if you know all this already, but didn't want not to mention it. I'd strongly advise getting a good lawyer to handle things for you. I always use C&F, expensive but very competent service from what I've seen. It may well be that it wasn't neccessary, but you'll be so exposed to any pitfalls if there happen to be any lurking.

The other thing from your other thread is that Thai wills are essential, and done correctly to meet all the Thai requirements, ie: not off-the-shelf DIY one's as Nereus rightly warned against. Without a will a legal spouse (Thai or farang) has to share the spouses 'estate' with 6 classes of statutory heirs listed under the law, 1) Dependants, 2) parents, 3) brothers/sisters, 4) brothers/sisters of half blood, 5) Aunts/Uncles, 6) Grandparents.

Only if none of that lot are alive would the spouse inherit all, IF no will.

Good luck,
SJ

[Nereus]

Without trying to confuse the issue, Super Joe, surely some of what you have written is contradictory.
As you have rightly written, the foreign exchange certificate must have the same name as the foreigner wanting to register the condo. How can that be done if the funds are transferred to a developer and or lawyer?

The funds can be sent from any overseas account, (I have done it this way) but again, as you rightly put it, in foreign currency.

I tend to believe that the developer is not giving the OP the correct information.

[Dr Mike]

i know that looking for logic in govt regulations is likely to drive you insane but why if you already have suficient funds in baht in a Thai bank can you not use that money???

[Brit Jim]

[quote="Nereus"]Without trying to confuse the issue, Super Joe, surely some of what you have written is contradictory. As you have rightly written, the foreign exchange certificate must have the same name as the foreigner wanting to register the condo. How can that be done if the funds are transferred to a developer and or lawyer? quote)

When I bought I transferred the funds from my UK bank account direct into my Thai bank account. Then visited my Thai bank transferring funds to the developer requesting the Foreign Exchange Transfer form from the bank.

This method shows the money coming into Thailand essential if you sell up and return the funds to Uk. You require the FETS forms to send large sums of money out of the country unless you send it back gradually. Also shows a paper trail if problems arise.

YES use a solicitor. I did NOT but was one of the lucky ones! Steep learning curve and many pitfalls out there. Plus you need to be out there to monitor the development.