Last month we touched upon considering buying older, derelict projects and properties through the auctions. This time I’d like to explain some of the basics of how the auctions in Thailand work.

Once a property has been repossessed by the authorities there are up to four groups that will determine its value to enable it to be auctioned.

No 1 is a professional estimator; next is the chief executive officer of the Legal Execution Office plus a second group from the same office referred to as property estimator. Finally, there’s the Property Estimator Committee.

Sometimes not all of the above groups will submit a valuation and therefore there’s a stepping-stone progression to determine which price is used at the auction.

From the four groups, the first to be consulted is the Property Estimator Committee. If that committee does not submit a valuation, the second valuer is the property estimator of the Legal Execution Office. Then it’s the chief executive officer and finally the professional estimator.

Once a starting bid valuation has been determined, the auction house will set a date, a deposit amount interested parties will need to pay to be able to bid on the property, and how much the price will increase per bid if there is more than one person bidding.

What is interesting from this point on is that, if no one bids on the property at the initial auction, for the next auction – usually held two or three weeks later – the starting bid price will be 10% less than for the previous one. This process will continue for a further two auctions until the price is 30% less than the first round.

So, there can be some large savings… provided you are the only person interested in a certain property.

Following a successful bid, the money you paid to allow you to bid is then retained by the auction house as the deposit on the property. At this time, you can request up to 90 days to pay the balance. Once paid within the 90 days and all taxes and transfers are settled at the Land Office you become the legal owner.

But don’t be fooled into thinking all of this is very straightforward and plain sailing.

With many properties there are hurdles. For example, as you might imagine, some properties that have been repossessed due to failed financial payments may still have the previous owners residing in them. Others will have had everything – and I do mean everything – removed.

Before seeking to buy any type of property at auction do your utmost to perform due diligence on it. Check for unpaid maintenances, taxes, water and electricity bills just as a few examples. All of these extras that can be unveiled after the auction may mean the property you think you got cheaply turns into something a nightmare.

If you were interested to look further into this the government website for auctions is www.asset.led.go.th/newbidregand. There is an option for English language www.asset.led.go.th