Property in Phuket

Do You Know These Real Estate Terminologies?

Luxury Properties in Phuket

The Cozy Interior of a Condo with a Sea View in Phuket
A Phuket Condo with a Cozy Interior and Stunning Sea View

If you have been looking at real estate in Phuket, chances are you have come across words and phrases that property agents use that make you scratch your head and say, “What?” If you’re on a hunt for a property—whether it’s for your personal use or for investment purposes—you need a certain level of industry knowledge to ensure that the property that you’re going to purchase or those that you’ve shortlisted are aligned with your expectations and best interests.

Here are a few real estate terminologies that you need to know when exploring property in Phuket:

Aesthetic Value

The aesthetic value refers to the value of a property derived from the architecture or natural surroundings. In Phuket, villas and condominiums with ocean views have a higher aesthetic value.

Agent Fees

Agent fees refers to the amount payable to the agent upon the closing of a property deal. The agent fees are typically 5-6% of the property sale price.

Amortization

Amortization refers to the scheduling of mortgage installment payments over a period of time. When it comes to real estate purchases, a typical buyer makes one payment per month over a period of 15-30 years.

Appraisal/Property Valuation

An appraisal, or property valuation, is a process designed to offer an accurate estimate of a property’s current market value. This process is carried out by a licensed third-party and is usually required by mortgage lenders to ensure that the loan being requested reflects the property market value.

Blue Book/House Book

The blue book, or house book as some call it, is proof of residence that details the individuals who live in a house. It is a required document when officially transferring a property.

Built-In Furniture

Built-in furniture refers to items that remain part of the permanent structure of a property. They may include cabinets, wardrobes, shelves, appliances, etc.

Capital Gain

Capital gain is the increase in a property’s value.

Chanote

Issued by the Thailand Land Department, a chanote is a land ownership title deed.

Closing

Closing, as the word suggests, is the final step in a real estate transaction. The closing date is normally agreed upon by both the seller and the buyer during the negotiation phase and usually takes place several weeks after the offer is formally accepted. During this final step, the ownership of the property is officially transferred from the seller to the buyer.

Closing Costs

Closing costs are expenses you need to pay when you close on your property. Closing costs may include:

  • Appraisal + survey fees
  • Loan origination fees
  • Title insurance
  • Homeowner’s insurance
  • Private mortgage insurance
  • Property taxes
  • Attorney fees
  • Closing/escrow fees

Common Area Fee/Maintenance Fee

The common area fee, or maintenance fee, is a monthly fee paid by every unit owner of a condominium development. The fee is calculated based on the size of each individual unit, with large units costing more than smaller ones.

Condominium

A condominium, which is often referred to simply as a “condo,” is a property similar to that of an apartment in structure, but is different when it comes down to ownership. An apartment is a property inside a building that is usually owned by a single entity and rented, where a condominium is an individually owned unit.

Condominium Facilities/Complex Facilities/Common Area

Condominium facilities, which are also referred to as complex facilities or common areas, are the amenities available to residents, such as a gym, spa, sauna, swimming pool, and kids’ club.

Condominium License

Licensed condominiums have multiple owners who each have individual ownership of the units and proportional joint ownership of the common areas. 

Construction Permit

Construction permits are written authorizations issued by a city or county for the construction of a project and are required for most development projects to ensure the safety of the work as well as the developer’s compliance with building, construction, and zoning codes.

Down Payment

A down payment is an amount paid by the buyer when closing a property deal. The amount typically ranges between 10-20% of the overall purchase price and is usually non-refundable.

Environmental Impact Assessment (EIA)

An environmental impact assessment is carried out to assess the likely environmental impacts, both positive and negative, of a proposed project or development.

Freehold Property

In Thailand, freehold properties can be purchased and owned forever, or until the owner wishes to sell them to someone else.

Furniture Package

If a condominium or a villa has a furniture package, it means that the property comes with furniture, the price of which is included in the deal.

Gross Area

The gross area of a property refers to the total area contained within the external face or the external walls.

Guaranteed Rental Returns/Guaranteed Income/Guaranteed Rental Program

If you purchase a property with guaranteed rental returns from a developer, the developer will help you rent out your property and deliver the rental income to you.

Home Inspection

A home inspection is the examination of a property before the sale. A qualified home inspector assesses the condition of the property and will look for evidence of insect, water, and fire damage, or any other issues that may affect the value of the property.

Investment Property

An investment property is a property that is purchased and used to earn rentals, gain value (appreciation), or both.

Investment Returns

Investment returns (also referred to as ROI – return on investment) refer to the profits a property makes as a result of appreciation or rental gains.

Leasehold Property

A leasehold is a long-term lease. In Thailand, leasehold properties can be purchased and owned for a fixed period of time. Afterward, the property has to be returned to the original owners.

Net Area/Liveable Area

The net area, or liveable area, of a property refers to its usable area. Parts of a property, like an attic or a storage room, are usually not counted toward the net area as they are not considered living areas.

Payment Schedule

A payment schedule is the agreed timing and sequence of payments between the buyer and the seller, or the buyer and his/her mortgage lender.

Registration Fee

A registration fee is paid to the land office when transferring property in Thailand. The amount depends on the type of ownership and the value of the property.

Reservation Deposit

A reservation deposit is usually a non-refundable amount paid by the interested buyer to the seller or real estate agency to reserve the property. 

Seller Disclosure

A seller disclosure is a document issued by the seller outlining any existing issues concerning the property being sold and other important information that the buyer needs to know. This document generally includes the repairs performed, details of any property defects, history of leaks, and other issues.

Showroom

A showroom is used to display a unit or more of a property that is still being developed, to give potential buyers and investors an accurate idea of what the unit will look like once it’s built.

Sinking Fund

A sinking fund is a one-time payment made by the owner of a property. The fund is used to cover the costs of major repairs and upgrades to a condominium building and its common areas.

Stamp Duty

The stamp duty is a tax on a property transaction charged by the government.

Are there any other real estate terminologies that you’ve come across that you’d like the definitions for? Feel free to let us know!

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