A contract for deed is a type of real estate transaction. In Bangkok, foreigners often encounter this method when purchasing property.
This approach differs from traditional real estate purchases.
Foreigners prefer contract for deed for its flexibility. Traditional mortgages require bank approvals; contract for deed transactions do not.
Buyers obtain property rights without immediate bank involvement. Sellers benefit from a broader market of potential buyers.
This inclusivity contrasts with the exclusivity of bank-financed deals.
Contracts for deed feature installment payments. Buyers pay sellers over time, not upfront.
Ownership transfers after the final payment, not at the start. This deferred ownership is common in contracts for deed.
Down payments in contracts for deed are negotiable. Payment schedules adapt to buyer and seller agreements.
Interest rates in contracts for deed can be higher than bank loans. These rates reflect the higher risk sellers assume.
Unusual features include the right to sell the contract. Buyers can transfer their interest before full ownership.
Contracts for deed may include balloon payments. Large sums become due at the contract’s end.
Sellers can retain title until full payment. This security measure protects sellers against buyer default.
Contracts for deed uniquely benefit foreign investors. They bypass bank loan difficulties.
Foreigners gain access to Bangkok’s real estate market. Contracts allow immediate property use.
Buyers enjoy the benefits of ownership before completing payments.
Comparing contracts for deed to traditional mortgages highlights differences. Mortgages transfer property ownership immediately.
Contracts for deed defer this transfer. Mortgages often have lower interest rates than contracts for deed.
However, contracts for deed offer quicker, more flexible transactions.
For more insights, visit our glossary about Bangkok real estate.