Resale of a Developer Contract

Under conditions of widespread quarantine, purchasing real estate on the secondary market has become more complicated. To register a transaction at the Land Department, either the buyer and seller must be personally present—which is not always possible at the moment—or a power of attorney is required.

If both parties have been abroad for a long time, the power of attorney must be certified at a Thai consulate or legalized through the Ministry of Foreign Affairs, which is also currently difficult.

Purchasing a contract — the assignment of rights under a purchase agreement/leasehold contract for a condominium under construction — is currently the simplest way to buy or sell real estate.

First, the contract can be concluded remotely; there is no need to come to Thailand or meet the seller in person.

Second, since this concerns primary real estate that is still under construction, inspection of the unit at the time of the transaction is not required. It is sufficient to review the project design and brochures online.

Third, the fulfillment of obligations by the seller is confirmed by the developer’s acknowledgment of the contract change and recognition of you as the new buyer. At this stage, payment can be made to the seller of the off-plan property. There is no need to wait for ownership registration.

Why purchase a contract instead of buying directly from a developer? There are several reasons:

The resale price of the property may be significantly more attractive. Selling an off-plan unit is one of the few ways to quickly sell real estate during quarantine conditions in Thailand without personal presence.
The resale price may be more favorable than the developer’s price if the developer increases prices as construction nears completion, while the original buyer resells at the initial price.
Units with the best layouts and floors may already be sold out, making resale the only way to obtain a desirable unit.
If we are discussing a purchase agreement that is transferred with a discount and includes a guaranteed rental agreement (for example, 10% per annum), the effective yield relative to the purchase price may be significantly higher — for example, 12% or even 15%.