Finding Accommodation – Buying

Buying property in Chiang Mai involves specific legal and practical considerations, especially for foreign buyers. Here’s a comprehensive guide to help you navigate the process:

Legal Considerations

It is very important to consult a lawyer before embarking on any property transaction.

1. Foreign Ownership Rules:
   • Condos: Foreigners can own up to 49% of the total area of all condominium units in a single project. This is the most straightforward property type for foreigners to purchase.
   • Land: Foreigners cannot own land directly but can lease it for up to 30 years, with an option to renew. Another common method is to form a Thai company with Thai majority ownership, though this approach has legal complexities.
   • Houses: Foreigners can own the structure (house) but not the land it sits on. A common practice is to lease the land long-term and own the house.
2. Due Diligence:
   • Legal Advice: Engage a reputable lawyer who specializes in Thai property law to conduct due diligence on the property, ensuring clear title and compliance with all laws.
   • Title Deeds: Verify the title deed with the Land Department. The most secure form is the Chanote title deed, which provides full ownership rights.
3. Financing:
   • Loans: Obtaining a mortgage as a foreigner can be challenging, as most Thai banks offer limited financing options. Some international banks and specialized financial institutions provide loans to foreigners.
   • Cash Purchases: Many foreigners opt to buy property outright to avoid financing complications.

Steps to Buy Property

1. Identify Your Property:
   • Type: Decide whether you want to buy a condominium, house, or land lease.
   • Location: Popular areas in Chiang Mai include the Old City, Nimmanhaemin, Riverside, Santitham, and gated communities (Moo Baans).
   • Budget: Set a clear budget, considering additional costs like taxes, legal fees, and maintenance.
2. Hire a Real Estate Agent:
   • Local Expertise: Choose a reputable real estate agent with local knowledge and experience in dealing with foreign buyers.
   • Listings: Agents can provide access to a wide range of property listings and assist with negotiations.
3. Conduct Due Diligence:
   • Property Inspection: Physically inspect the property to assess its condition and surroundings.
   • Legal Review: Have your lawyer review all documents and ensure the property has no legal encumbrances.
4. Sales Agreement:
   • Contract: Draft a sales agreement detailing the terms of the purchase, including price, payment schedule, and any contingencies.
   • Deposit: Typically, a deposit of 10-15% of the purchase price is required to secure the property.
5. Transfer of Ownership:
   • Land Department: The final step involves transferring the property at the Land Department. Both buyer and seller (or their representatives) must be present.
   • Fees and Taxes: Be prepared to pay transfer fees (around 2% of the assessed property value), stamp duty, and possibly specific business tax if the property has been owned for less than five years.

Popular Areas to Buy Property in Chiang Mai

1. Old City: Ideal for those who appreciate historic charm and proximity to temples and cultural sites.
2. Nimmanhaemin: A trendy area popular with expats and digital nomads, known for its vibrant nightlife, cafes, and boutiques.
3. Riverside: Offers scenic views and a quieter, more relaxed environment, with luxury properties and proximity to the Ping River.
4. Santitham: A more local neighbourhood, providing affordable housing options and a taste of traditional Thai living.
5. Gated Communities: Offering security and modern homes.

Additional Tips

1. Maintenance and Management: Consider property management services if you don’t plan to reside in Chiang Mai full-time.
2. Community and Lifestyle: Choose a location that suits your lifestyle preferences, whether it’s bustling urban life, serene riverside living, or a blend of both.
3. Resale Value: Research the market trends and potential for property appreciation, especially if you consider the investment aspect.
4. Cultural Sensitivity: Be respectful of local customs and practices, which can significantly enhance your experience as a property owner in Chiang Mai.

Negotiating Prices

Negotiating prices, whether for property or day-to-day purchases in Chiang Mai, can be an effective way to secure a good deal. Here are some tips and strategies to help you negotiate successfully:

General Tips for Negotiating Prices

1. Do Your Research:
   • Market Rates: Understand the going rates for the item or property you’re interested in. For property, look at comparable sales in the area. For goods, visit a few different vendors to get a sense of the typical price range.
   • Local Customs: Learn the local customs and norms around bargaining. In some settings, negotiation is expected and part of the buying process.
2. Build Rapport:
   • Be Polite and Friendly: A smile and a friendly attitude can go a long way in negotiations. Building a good rapport with the seller can make them more willing to offer a better price.
   • Language: Learning a few basic phrases in Thai can show respect and endear you to the seller, even if you conduct most of the negotiation in English.
3. Be Prepared to Walk Away:
   • Confidence: Show that you’re willing to walk away if the price doesn’t meet your expectations. Often, the seller may offer a better deal to keep your business.
   • Alternatives: Have a backup plan or an alternative vendor in mind. This gives you leverage in negotiations.

Specific Strategies for Different Scenarios

• Real Estate
  1. Initial Offer:
     • Start Low: Begin with an offer lower than your maximum budget to leave room for negotiation. Typically, you might start 10-20% below the asking price.
     • Justification: Provide reasons for your lower offer, such as comparable property prices, needed repairs, or market conditions.
  2. Counteroffers:
     • Incremental Increases: Raise your offer incrementally, and ask for concessions in return, such as including certain appliances, furnishings, or even covering closing costs.
     • Highlight Positives: Emphasize your positive attributes as a buyer, such as being able to close quickly or not requiring financing.
  3. Professional Help:
     • Real Estate Agent: Utilize a local real estate agent who can negotiate on your behalf and provide valuable insights into the local market.