Real estate transactions commonly involve deposits whether for a long term lease or for an actual purchase of a property. These monetary tenders have a variety of purposes depending on which side, be it the buyer’s or that of the seller’s.
For a buyer, a deposit can serve as proof of his sincerity to purchase a property and possibly to secure the property from other interested parties. On the other hand, the seller may also use the buyer’s deposit as a proof of his commitment to reserve the property for the depositor for future transactions.
This makes a deposit a direct, practical and risk free thing to do in property acquisition or is it really?
Websites, property books and real estate journals always suggest safeguards with regards to deposits. Many of these safeguards are indeed applicable in Thailand while others are not. Other factors that contribute to these wise advices’ applicability in this far eastern country may be traced to the buyer himself and are highly dependent in part or in whole to his preferences.
But why does a deposit also subject to risks when its purpose is to reduce the risk?
First and foremost, as stated earlier on this article, the main intention behind a deposit is to secure the property for a buyer and to secure an eventual purchase contract for the seller or agent.
The risks involved with deposits are the other factors behind the security factor or that these risks may be entirely personal in nature.
In the Thai real estate market, which is unregulated by the way, scrupulous individuals may be in plain view of a property buyer disguised as good looking and extra friendly property agents or sellers.
They can be equipped with glossy property and sales record portfolio, websites and colorful ads that are capable to convince the buyer that these people are the “real deal.” It is also highly likely that they also have the best attitude, the kind of which a property buyer may find alluring and funny.
So this or this property agent/s starts showing off the available properties around. After showing off the properties, negotiations for the terms and conditions may commence. The seller or agent may inject the topic about paying a deposit of certain amount to secure the property that only the interested party can have it in the long run.
The advice in this instance is that the interested party must not pay the “required” deposit right away. What the buyer can do best is to politely ask the seller or agent to right down the terms especially with regards to the deposit. He should also verify with the agent or seller whether such deposit is refundable or if will act to offset a part of the total price of the property.
No matter how clear the explanation will be, the buyer should not be satisfied with that still as he has to go further than having the terms and conditions behind the deposit written as a contract or agreement waiting to be signed by him.
If the buyer is not in contact with a reputable lawyer yet, then he must do so immediately before he will agree or pay a deposit with the seller or agent.
The buyer must then consult the terms and conditions behind the deposit or the contract with his lawyer. The lawyer will have to check if the terms are prudent enough to comply with the law and if the terms and conditions are realistic and in favor of the buyer.
Another thing about having a reputable lawyer is that, the buyer can always opt to have the property under due diligence so as to verify the authenticity of its documents and clear it of any encumbrances especially if such property is owned or represented by a lesser known or a small real estate company.
Therefore, when dealing with agents and seller of real estate properties in Thailand, the buyer must refrain from paying a deposit based on impulse decision. If he was not able to secure the property because he did not pay the “required” deposit, well, Thailand is a large and lovely country with real estate developments sprouting almost everywhere. The buyer can always consider scouting these.