Acquiring a piece of paradise is no picnic
Forget the horror stories: buying a home in Phuket is not too different from what it is like in Hong Kong. It just takes a little more time, fortitude and meticulousness to iron out the kinks and avoid any untoward outcomes.
Despite unrest in Thailand's southern border provinces, global terrorism and sky-high oil prices, buyers are still jetting in from Bangkok, Hong Kong and well beyond. CB Richard Ellis estimates sales of villas and homes in the US$100,000 to US$1 million range at US$4 million to $5 million a month so far this year.
Consequently, prices are climbing fast. Tales of buyers making a killing have some rushing to buy and running the risk of regretting that purchase for a long time after.
Before hopping on a plane, reflect.
'Buyers should clarify in their minds why they are buying: for leisure use, investment or income, or even all three. They should be quite clear why they are buying,' said the managing director of CB Richard Ellis (Thailand), David Simister, who oversees Phuket.
Comb Phuket carefully for desirable locations. Buying a piece of paradise is not a holiday. Prospective sites call for careful investigation. Even regular visitors should get a fresh perspective, spending at least four or five days driving around and getting a feel for appealing locations.
'One problem we have seen is people buying with a far from perfect knowledge of what else is available in the market,' Mr Simister said.
Engage a lawyer before buying off the shelf from a developer or acquiring land for a bespoke abode.
'The first thing is to find an accredited lawyer to check the land title and the conditions associated with it,' said Paul Moorehouse, chief executive of developer Lakewood Hill. 'There are several foreign lawyers on the island who speak fluent Thai and know the laws and conditions inside out.'
Ownership is complicated because foreigners cannot buy land, so rolling 30-year leaseholds are common. Leaseholders often buy a minority of shares carrying majority voting rights, thus guaranteeing control over leasing arrangements in the land-owning company, leaving the majority in Thai hands to comply with the law. No matter what arrangement, land title should be chanote (freehold), not any of the three lesser titles.
'Three words - International Law Office - should cover all the advice you need,' said Peter Antonioni, an oil trader who recently bought prime land on a beach.
'To be honest, my first dally was a bit hit and miss,' he said. 'I had heard horror stories about people buying land and spending loads of cash building only to find they didn't own anything in the first place, so the logical conclusion was to do my conveyancing through a quality solicitor, even if it meant paying top dollars.'
A lawyer will ensure the land is legitimately for sale, not mortgaged by the developer, and that house and land are sold together.
Inspect the developer's portfolio first-hand before signing any detailed contract.
'If you are buying from an established developer, you are probably paying a bit more,' Mr Moorehouse said.
Payments should be phased. Househunters should carefully consider the overall plan and design and nail down every detail, no matter how minor, in the contract, including construction dates. Property management after construction is equally important.