Owning a home is a significant goal in many people's lives, especially for those in the workforce who are building their wealth and families. Not only does it meet the need for housing, but it also reflects stability in life. Although consumers currently face challenges from the economic situation and inflation, as well as interest rate hikes by the Monetary Policy Committee (MPC), which may cause hesitation for those planning to own a home this year, the value of assistance measures in the real estate sector should be considered. These include a reduction in transfer and mortgage fees to just 0.01% for both new and resale homes priced under 3 million baht, along with the relaxation of Loan-to-Value (LTV) regulations by the Bank of Thailand, allowing homebuyers to borrow up to 100%. As this measure is nearing its end by the end of 2022, and with developers signaling future price increases due to rising costs, this period presents another excellent opportunity for middle to lower-income consumers to own a home at a reasonable price.

5 Steps to Know When Considering Home/Condo Ownership

Buying a home is a personal matter that requires special attention to detail, as it involves a high-value asset and various contractual documents. Those who have never purchased a home or condo before should study and understand the different steps clearly to ensure a smooth transaction and prevent potential issues later on. Here are the five main steps consumers should know when buying a home:

1. Research and Choose the Right Type Consumers should have a clear purpose for buying a home or condo, whether for personal residence or investment. If it's for living, discussions with family members are essential to define the dream home or condo that fits their lifestyle. After that, select a preferred location and set a rough budget before searching for housing projects on real estate marketplace websites like www.DDproperty.com, which compile listings from reputable developers, agents, or homeowners, along with reviews of interesting new projects. Narrow down the options to no more than five projects for actual visits or virtual tours to inquire about additional information or promotions from sales staff. Additionally, exploring the surrounding area is crucial, considering safety, convenience, and the current and future potential of the location before comparing all gathered information to select the most suitable housing option.

2. Review Details Before Making a Reservation and Signing a Contract Once a preferred project is found, consumers can express their intent to the sales staff to reserve the desired unit by paying a reservation fee, which varies by project based on the property's value. Consumers must also thoroughly review the details of the reservation and purchase agreements. The purchase agreement serves as an indication of the buyer's intention to buy the property from the seller, along with a deposit to guarantee that a sales contract will be executed and ownership will be transferred within a specified timeframe, detailing various costs. Consumers should check the information, details, and conditions in the contract clearly to prevent losses if issues arise later. After signing, a down payment will be required. If purchasing a project that is still under construction, consumers can pay the down payment in installments as specified in the contract, or some projects may offer a free down payment promotion.

3. Prepare Financially to Apply for a Loan For consumers not buying a home outright with cash, it's essential to assess financial readiness and plan savings effectively, clearing as much debt as possible to increase the chances of loan approval for the desired amount. Research loan options from banks or financial institutions to inquire about terms and promotions. Typically, banks consider the borrower's income and set conditions allowing them to bear debt up to 40% of their monthly income. Therefore, consumers should prepare documents demonstrating their financial capability, including income details and repayment potential, along with any collateral. They can also consider applying for a joint loan with family members to increase the loan amount. In cases of purchasing a project still under construction, staff will inform consumers to apply for a loan when construction nears completion, allowing more time to prepare documents. However, the approved loan amount may not cover all costs, so consumers should have additional funds for extra expenses.

4. Inspect Before Transfer Once the bank or financial institution approves the loan, the project will schedule a final inspection of the home or condo's condition before signing for acceptance. Consumers should prepare a checklist to help verify the condition of electrical systems, plumbing, communication systems, floors, walls, doors, and windows. If unsure, they can hire a professional inspection company to assist with the inspection, which can provide confidence and save time. Afterward, inform the project to rectify any defects and set a date for a final inspection before proceeding with the ownership transfer. Transferring ownership before the inspection may complicate requests for further corrections.

5. Prepare for Ownership Transfer Costs In this step, the buyer, project representative, and bank or financial institution representative must go together to the land office to process the ownership transfer. The bank officer will inform the approved loan amount and detail the costs the buyer needs to prepare, which may include portions paid by the buyer, seller, or shared. If the buyer's approved loan is less than requested, they must prepare funds to cover the remaining balance owed to the project or seller. The costs include:
• Transfer fee: 2% of the assessed value of the land and buildings, split 1% each between the buyer and seller or as agreed between them.
• Specific business tax: 3.3% of the sale price or assessed value, using the higher amount, is the seller's expense. If owned for more than 5 years or registered in the house register for over a year, this tax is exempt.
• Stamp duty: 0.5% of the sale price or assessed value, using the higher amount, but not lower than the assessed land value, is the seller's expense (if the specific business tax is paid, stamp duty is not required).
• Mortgage registration fee: 1% of the total loan amount, which is the buyer's expense when borrowing.
• Personal income tax must be paid by the seller if they are an individual earning from the transaction.
• Materials/Furniture Not as Advertised When purchasing a project that is still under construction, there is a risk of encountering issues where materials or furniture do not match the initial agreement, or common areas do not align with the advertised specifications. During the inspection before signing for ownership transfer, buyers should keep brochures, promotional materials, and contract details as evidence to request corrections or negotiate for other compensations. If construction does not match the agreed specifications, consumers can check with the local authority for the permit number and request to see the project's blueprints at the Department of Public Works and Town & Country Planning to verify if it was built according to the advertised design. If discrepancies are found, buyers can cancel the contract and request a full refund due to non-compliance with the agreement.

• Project EIA Not Approved The Environmental Impact Assessment (EIA) report plays a role in controlling construction projects to prevent environmental impacts. Any housing project that fails the EIA cannot proceed with construction. However, some projects may start selling before applying for the EIA or while awaiting approval, which poses a risk for buyers. If the project fails the EIA, they must refund the reservation and down payment according to the law. If buyers still wish to own the unit, they should inquire about the project's plan to rectify the situation until the EIA is approved and how long it will take. If buyers do not want to wait, they should ask when the project can fully refund the reservation fee. If there is no clarity or progress, affected buyers should unite to assert their rights collectively, file a report with local police, and contact the Consumer Protection Office for assistance.

• Project Delays or Incomplete Construction This may occur due to construction issues or the project's liquidity. Consumers should check the contract details from the beginning to see if the project specifies responsibilities in case of delays or incomplete construction. If the project is delayed due to the seller or developer's fault, the seller must pay a daily penalty to the buyer at a rate of 0.01% of the sale price until construction is completed and delivered to the buyer, or as negotiated. If a condo is not completed or construction halts without explanation or compensation for buyers, they have the right to cancel the contract and request a full refund, including reservation, contract, and down payment, along with interest at 7.5% per annum from the start date of the reservation payment.

While buying and selling real estate may seem straightforward, it actually involves many more details than one might think, and it can be a new experience for many consumers. Additionally, there are significant legal details involved. Buyers and sellers in the real estate market must understand and continuously update their knowledge.

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