As the re-sale market in Krabi is very small, it is likely you will end up buying a new house from a developer's plan (off-plan), or designing and building your own home from scratch (self-build). Here Krabi Property looks at the pros and cons of each option.
BUYING a house “off-plan” means buying a house that is not yet built. Sounds crazy perhaps, yet it is the most common way of buying property in Thailand - and especially Krabi, where the re-sale market is almost non-existent.
The advantages of this type of scheme for the property developers is clear: they build to demand, thus not flooding the market with unwanted houses, and they have a source of ready funds in the form of a deposit from the buyer, as well as regular instalments to complete construction. But what’s in it for the buyer?
In this month’s article, we assess the risks of buying a home ‘off-plan’ and compare this method with others available.
- Buying a house off-plan can mean an overall saving compared with self or custom build, particularly when buying a home in a large development.
- You usually have some (limited) options to alter the appearance of the property, as well as customise fittings and occasionally structural details before and during construction.
- If you are buying the house as an investment, then you have plenty of time to market the property for re-sale or rental before completion.
- Many of these type of developments have communal facilities, which will help reduce costs and worry over maintenance.
- Provided you make a good contract with the developers, you will be in a strong position if there are any delays in completion, as there are usually penalty clauses to protect you.
- Most off-plan projects require a significant percentage of the purchase price to be deposited up front before the name on the property lease is transfered to the new owner, which obviously demands a lot of trust on your behalf.
- The title of the land on which the developer is building could turn out to be inappropriate or incorrect.
- Unreliable developers could suffer financial problems at any time throughout the project, leaving you high and dry.
- Lack of proper insurance for the development means both parties will lose in the event of any damage to the property.
- If the development does not turn out the way you expect and you decide to pull out, recovering the money already invested could be very tricky.
HOW TO MINIMISE THE RISKS
- Don’t take the developer’s word for anything: buyers should carry out an independent title search on the land as soon as possible. Have the developer credit checked to ensure their financial record is not defective, and consider asking around locally to ensure there are no ‘bad stories’ surrounding the company.
- Before signing anything, or handing over any money, have the contract checked out - and modified if necessary - by a competent, specialist lawyer. Every document should be translated into your language - your embassy can do this for a fee, worth paying to avoid problems that could cost you much more later.
- Your lawyer should also be able to negotiate payment terms and ensure that the developers have a proper insurance policy that is included in the terms of your contract, as well as penalties for unreasonably late completion etc.
OTHER OPTIONS AVAILABLE
Building your own home, exactly how you want it, is a fantasy of many. Locate it in the lush surroundings of Krabi and it becomes even more appealing. But the reality of tackling the task alone is very different.
This is not to say that some westerners have not managed it. But the whole process, from buying the land, drawing up plans, getting planning permission, finding and negotiating with construction workers, and managing the budget in an alien language and culture is extremely daunting. Even if you have a Thai partner to help, communication with him or her can often break down when it comes to accurately explaining your requirements. In short, you will need to have a lot of money, time and luck, as well as the flexibility and patience to deal with the times when (not if) your plans going awry.
If you are up for this kind of sanity-testing challenge, a good website that deals with many of the issues that arise during a self-build project is www.coolthaihouse.com. Note that this site only discusses fairly standard, Thai-style home designs with western fittings; for anything more ambitious, it would be downright foolish not to consult at least one set of experts.
A relatively new service available through some developers and real estate companies in Krabi, this marries the best of both the previous options. You will still be buying off-plan, but the plan will be yours entirely, designed to your exact needs by an architect, rather than being part of a developer’s larger project.
Then, instead of having the hassle of building the house yourself, it will be personally project-managed to ensure it is completed on time and within the budget agreed upon at the start. This is thus an ideal option for those who cannot be in Krabi throughout the year to supervise building work. Modifications to the original plans can also usually be made along the way, for a small cost.
Once finished, you will have your own unique villa, that is not part of any scheme or development - perfect for those who value their privacy and independence.
Note that the risks of off-plan outlined above still apply here; it will thus be necessary to employ an independent lawyer to check the contract, company and land title deeds etc.
Above: 3D-modelling, with realistic markers like furniture, makes it much easier to visualise your home before you commit to buying.
R E S O U R C E S > > >
KNOW YOUR RIGHTS
Intro to your property rights
UPDATE! Your new property rights as a company owner
Land titles 101
The price of land in Krabi
Krabi Property Clinic: your questions answered
SCAMS AND HOW TO AVOID THEM
Common pitfalls when buying real estate in Krabi
Beware of bogus agents!
CHOOSING A PROPERTY
Where to buy your home: a guide to the different areas
The Krabi holiday home checklist
Self-build or off-plan?
Focus on Had Yao: Krabi's next big thing?
DESIGN & INTERIORS
Design tips from a Krabi architect
Creating a modern Thai-style interior
Planning a tropical garden
Should you install a swimming pool?
SHORT STAYS AND RENTAL PROPERTY
Renting a house in Krabi: a guide to the different types of houses available, prices, and where to look
Long term hotel stays
LIVING IN KRABI
Case study: retiring to Krabi
Expat life in Krabi
(Practicalities for the long-term resident)
Expat testimonials: moving to Krabi - how was it for you?
KRABI PROPERTY LISTINGS
Homes and land for sale and rent in Krabi
Krabi property news - new developments, infrastructure etc.
WHO WE ARE('nt)
Krabi Property is not a real estate agent - we do not sell houses, land, or property of any kind, nor are we affiliated with anyone who does. We provide the only honest and independent information about the housing scene and the legal process of property purchase in the Krabi area, because we are not trying to sell you anything. Though you will find listings of Krabi villa projects and developments on our site, these are paid for as normal advertising and we do not receive any commission or kickbacks for sales. Finally, we regret that we cannot provide help for individual customers; those interested in property purchase should contact our advertisers directly, not us. More about us.
More from our partner sites - for your complete guide to Krabi Province:
Your Krabi (Ao Nang, Krabi Town, Railay and the mainland coast)
Phi Phi Islands Guide
Lanta Islands Guide