When venturing into any form of investment, risks are always involved. These pitfalls may exist like booby traps, just lying and waiting for an unsuspecting individual to fall or they simply reveal themselves as the project progresses.
Off-plan properties are not exempted from these risks and in view of this type of property investment, there are at least three sides that must be looked into: the side of the developer, the one who is against it for whatever reasons he may have and the vulnerable one, and that is you.
But, let us set aside your vulnerability in an off-plan property investment because on this article, you will be sitting as the judge and you will weigh the arguments that the developer (the accused) and the contra off-plan property purchase (the accuser) will present unto you.
So, let us begin with the examination of both concrete and circumstantial evidences.
Off-plan property acquisition offers discounted prices for the yet to be built units. You will also be given the freedom to select the best units possible and to add with those are the other incentives that the developer will offer you as an off-plan buyer.
For the developer, there is no problem if you only have catalogs, 3D model units and advertisements as your basis for purchasing off-plan. It can guarantee with vigor that whatever you see on these marketing tools will be exactly the same with a completely built one in the future.
The Contra Off-Plan Property Purchase
This person discourages you to purchase off-plan properties because of the risks involved. First, you will already begin payment even if the development is yet to be started or has yet to be finished. He will supplement this with an argument that there is always a possibility that the developer will run out of finances to finish the project.
Another contention of his is the concern on quality of workmanship and materials that will be used will not be the same with those on the advertisements.
And lastly, he attacks the character of the developer by questioning its credentials, financial capacity and overall stature in taking on such project.
You find both positions to be valid. You think that there is nothing wrong if the developer will start collecting payments from you even if the project is yet to be started but you also find credence to the argument of the opposition that there is always a risk that the development will not be finished and thereby leaving you hanging.
You also believe the possibility that the developer will not be able to build the property according to the schematics they presented earlier. You think that the 3D model units will not be the same with the actual units once finished. But, as what is said earlier, you only “believe” this possibility and you do not have the factual basis yet for such belief.
In other words, you find it hard to decide which side of argument you will take into consideration and so the best thing for you to do is to have an independent consultation on the matter by doing the standard practice of Due Diligence and a background check on the developer.
- Due Diligence – This will allow you to check the authenticity of the documents, especially the type of title deed. Due diligence can also help you check the background of the title or property whether it is not subject to any litigations. It will also uncover if the development is allowed on such particular area base on its land classification.
- Developer Background Check – Your questions about the financial capacity and reputation of the developer will be answered if you will conduct a background check. After gaining pertinent information about the developer, you may now decide whether it is worth your trust and your advance payments or not.
With your limited knowledge on Thai property investment processes, culture and laws, of course you do need help. For proper execution of due diligence and background check on the developer, you need to enlist the services of a reputable registered Thai property lawyer.
The Thai lawyer can access court records for possible litigations involving the title, developer or property agent. He can also do efficient investigations whether the type of development is allowed on the particular area and on the overall status of the developer.