Step by step real estate buying process - anyone have a guide?

Assume you are buying a new property and not on resale market. Look around at the show flat and get a brief introduction to the property. Wait for sales launch for property of interest, locate developer and sales personnel, on date of launch, register interest and attend balloting session. Obtain sales details of property with payment installments details. You will need to pay a deposit, namely close to 100 million dong. Installment plans vary but could be near to 10 percent each round (1 or 2 months intervals) . Find out details of bank loans, if applicable. Foreigners can only buy condos but not landed properties. These are of high rise building types. The property lease will be for 50 years initially subject to possible renewals depending on law of the day. Continue payments till the final and obtain the red book (property register). Then, as owner, register with the local police. Sorry if I miss out on some details, hope others can help too.. Cheersb

I think the procedure varies. But if you want to buy an apartment in a new high-rise building project or a house in a new housing development project (objects) directly from the project developer, the procedure is similar.

I think buying directly from the project developer is safer than using real estate agents.
However, I would inform myself beforehand about the project developer on the Internet.

It is advantageous to have someone who can speak Vietnamese (and understand contractual documents) with you.

The purchase price is probably composed of land use right, property price and VAT.

In the contract, the project developer undertakes to pay the tax for the sale of the property. The buyer ought not have to pay taxes.


1)
The project may not have been completed yet.

2a)
You pay the developer a deposit of 50-100 million Dong in cash, receive a receipt and sign a reservation contract (thỏa thuận giữ giữ chỗ).
At this time you do not yet know which object in the project you can buy.

2b)
There are now more details and drawings of the project and the objects for sale. You go to a project event and can view a sample object and then select one of the available objects. Then you sign a reservation contract (thỏa thuận giữ giữ chỗ) with details of the selected object.

Usually 2a and 2b are together. But if you decide at a very early stage and not all drawings and papers are ready, it can be done in 2 steps.

3)
You must now sign a deposit contract (thỏa thuận đặt đặt cọc). You have to decide now if you want to buy one of the objects or not. If you sign here but don't want to buy later, you lose the deposit.
The payment plan is also defined in this contract.

For the Vietnamese, perhaps:
- 30% on signing the contract
- 10% within 60 days
- 10% within 105 days
- 10% within 150 days
- 10% within 195 days
- 25% within 300 days
- 5% after receiving the pink book

For foreigners, perhaps:
- 30% on signing the contract
- 65% within a few days
- 5% after receiving the pink book

4)
You must now sign the object purchase contract (hợp đồng mua bán nhà ở).
Transfer 30% of the purchase price (from a branch because you need a bank receipt) and show the bank receipt the project developer.
You will then receive a receipt.

5)
Transfer 65% of the object purchase price (from a branch because you need a bank receipt) and show the bank receipt the project developer.
You will then receive a receipt and the object purchase contract.

6)
Day of handover of the object.
You must make a transfer to the project developer for the one-time maintenance fee (e.g. 1% of the object purchase value) and the service fee for one year (e.g. 7'000 / m2 per month) and show the bank receipt the project developer.
Now you have to check the object, fill in any defects in a form and if everything is ok, sign the object delivery contract (biên bản bàn giao nhà).

7)
When you buy a house in a project, the interior work is usually not done (shell construction).
So you need to find someone to do the interior work (walls for the rooms, bathrooms, kitchen, water, sewage, electrical installations, floor coverings, suspended ceilings, air conditioners, etc.). Maybe you can hire someone built the interior of the sample objects. But this is more of an expensive alternative.
Depending on the size and standard, you will have to calculate about 1 trillion Dong.

8)
After 6-12 months (after the pink book is created from the authorities) you have to transfer the remaining 5% of the object price to the project developer and you will receive the pink book.

Point 7. There are some projects that come with walls, bathrooms, utilities connections, floor covering etc, all you need is add the kitchen, fittings, appliances, wardrobes and furniture . A clear example is Vinhomes Central Park where there are literally thousands of flats..
Further, if you decide to sell at a later date, you can ONLY sell back to a foreigner as well.

LSP123 wrote:

Point 7. There are some projects that come with walls, bathrooms, utilities connections, floor covering etc, all you need is add the kitchen, fittings, appliances, wardrobes and furniture . A clear example is Vinhomes Central Park where there are literally thousands of flats..
Further, if you decide to sell at a later date, you can ONLY sell back to a foreigner as well.

I think that's standard for condos. But I was talking about houses under 7).

If you are married with a Vietnamese woman, the house purchase contract can be issued in both names and both have to sign the contract. Can you then also only resell to foreigners?

I beg to differ. It's not standard for all condos. Phu My Hung built condos but only bare shell and we had to take care of all renovations and utilities connection, walls ceilings etc. Add about 700 mil all in.
Not sure about joint ownership of properties, could complicate matters. No comment.

[Q] If you are married with a Vietnamese woman, the house purchase contract can be issued in both names and both have to sign the contract. Can you then also only resell to foreigners?

[A] It depends on how the selling transaction is completed. If the sale happens with a VN identity as primary, then the property can be sold ONLY to Vietnamese. If the primary owner is the foreigner (typically using a foreign passport)  then the property can be sold ONLY to foreigners. Note that this buy transaction is not possible if the seller is Vietnamese.

Basic rules:  a foreigner CAN buy from developers or other foreigners in secondary market but NOT from a Vietnamese in secondary market. A foreigner can only sell to other foreigners. Similarly a local Vietnamese cannot enter into buy or sell contract with a foreigner. The intent of law is to keep local and foreign ownership separate and tracable.

I am aware of a special case where a foreigner wanted to sell the house after his wife passed away. Both were on the title originally. Since the house was originally bought using the VN identification he "had" to sell it to locals and not to his foreign friend buyers.

Because of this separation, the foreign owned properties has a separate market of its own usually with higher market value (since demand can be higher than supply) while the local vietnamese pool is lower in price. This is from my personal experience in Vinhomes Central park - foreign owned identical apartments are selling for 15-25% higher.

Are there any particular cases whereby one can sell to both markets-locals and foreigners?  Dual citizenship?

The answer is no. I know expat Vietnamese people in US (aka Viet kieu) who had issues in spite of having dual citizenship of USA as well as Vietnam. Some of them tried to arbitrage between these two markets I mentioned but did not succeed. Basically once the property is bought it is already identified (VN or foreign). This cannot be changed after the transaction.
Of course in VN things can be changed by getting to  the "right" contact - but these are by exception only.

Just a few informations:

Beginning 2018, I bought:

* 1 house in Dong Nai, 3.4 bil vnd 180 sqm. I paid 90% upfront and got a 10% disc for that.
Swan Park Dong Nai  /  1000 houses sold out in 3 months, confirmed by 3 different sources.
6 / 8 months later I am selling wijth a minimum profit of 10,000 usd.

* One apt for me 70 sqm in New City Q2.

* Another apt to rent in Diamond Island Q2. 80 sqm. Rent of about 1400 usd with or without vat.

If buying I would strongly suggest to verify the standards used in construction. If satisfied just by the shell and be the general contractor for everything else. You can choose the quality of the materials and pick the proper qualified people for installation. Provide close oversight on everything!!!

Kooler42 wrote:

If buying I would strongly suggest to verify the standards used in construction. If satisfied just by the shell and be the general contractor for everything else. You can choose the quality of the materials and pick the proper qualified people for installation. Provide close oversight on everything!!!

Hi Kooler42,

I have just bought an apartment in the shell stage but am looking for some good general contractors to renovated the apartment, do you have any experiences in this or recommendations on contractors?

Thanks in advance!
Kiwiming

LSP123 wrote:

I beg to differ. It's not standard for all condos. Phu My Hung built condos but only bare shell and we had to take care of all renovations and utilities connection, walls ceilings etc. Add about 700 mil all in.
Not sure about joint ownership of properties, could complicate matters. No comment.

Hi LSP123,

I've just bought a condo in shell conditions and will needs to take care of all renovations in a month time, would you be able to give me some of your experiences and some contractors for me to use.  If you don't mind me asking, how big in size is your condo, how many bedrooms?  Do you have guide on the renovation.

Thank you in advance.
Kiwiming

@Kiwiming

Normally there are model apartments in new real estate projects.
Those who have built the show flats usually leave their business cards there.

You can also drive through the city and ask at one of the many tile shops whether they also finish flats or know someone who is finishing flats. The same applies to furniture stores, plumbing and electric stores you see on the side of the road (e.g. in HCMC there are whole streets selling furniture). This is certainly the cheapest way, but is more time consuming.

I wish you good luck in your new apartment.
We currently live in a 6 year old high rise and it is the horror.
After a few removals due to constant noise, I thought that a newer high rise would be better in terms of noise pollution. But the opposite is the case.
I hope that you are allowed to install a better apartment door, that the floors are well insulated, and that your neighbors are higher educated. Otherwise you will be distroied by everything that can make noise.
I originally also wanted to buy a condominium. But since I made the experience (as a tenant) in a Vietnamese high rise, I'm really glad I never bought a condo.

Hello,

Important for me is to share this information and to see what we can positively do about the situation.

Global pin book situation in Thu Thiem, District 2 Saigon:
No new owner in Thu Thiem has obtained the pin book up to date.
In New City, I've been here for almost a year ... The sales manager in New City tells me that it is because of the government and that there is still at least 2 years before having a chance to get it...

What do you think ?

From the Quality side the materials used and the skill trades are very poor at best. There was a development in D7 that was designed by a Japanese person and was told the construction was by Japanese workers. Was very impressed with the materials that were to be used. My issues is the units will see sun most of the day.

Source Saigon times April 2019:

Article title: Poor demand strikes apartment segment in Q1

"The 1st quarter of the year saw a fall in both supplies and sales of apartment in HCMC, at 57% and 52%, respectively, over the same period last year"

"...in the first 3 months of the year, some 12,000 apartments were put up for sale, with 6,400 of them being sold..."

No further comments...

Depends what you want to call it.   An investment OR a lifestyle choice.

I've always found lifestyle choices to be expensive on paper , but rewarding in lifestyle enjoyment.     Weekenders (holiday homes) ocean going boats, swimming pools,  mistresses, jet skis , flash bikes etc...don't really pay off on the balance sheet , but you gain in life's pleasures.

But...all of the above can be leased by the week, day or hour....with  virtually no risk to your Capital.

As foreigners,  if you Invest...& do well, getting the money out of the country can be a problem as we know.   The bigger problem is getting the profit out.  That “rule” or mantra about only getting out what you bring in will create hoops & hurdles if you've made good money on the deal.     

As for potential capital gains......if anyone's been following world property trends it's not looking good anywhere.  Boom markets like Vancouver, Toronto, Auckland & Sydney are now experiencing downturns .    Chinese investment in Australian real estate has dropped 70% this year due to China's restrictions on flight of capital.

Recent reports have 65 MILLION vacant properties in China , financed by the banks at 3.5 TRILLION US DOLLARS.    The banks are worried.
They have put the squeeze on developers to get sales moving by dropping prices.    That has caused “ riots” by existing owners & the many flippers that will see major losses.   The only way out is everyone takes a “haircut”. 

It's happening here,  oversupply, rents are dropping and the banks are heavily loaded with property debt.   A lot of the lenders here have issued loans with 2 year interest free periods.   The chickens are coming home to roost.   

The banks are also dangerously low on capital adequacy.  That's why there raising rates to attract money ....I've seen 8.6% offered for TDS .
A lot of loans here survive by refinancing.    Now you've got the banks short of cash wanting to pay shareholder dividends in shares....😳

None of this is looking good for the future of property prices.

You've got land prices on the outskirts of Nha Trang at $3000 a sqm....and the area looks like a slum ridden scrap metal yard.

For a local  VN on average salary , that's over 5000 HOURS work to buy one shitty piece of dirt.     I know of one block that's sold for $4500 a sqm.  It's already traded 4 times.......BUT no one has ever produced the cash......it's just speculative idiots swapping sheets of paper.

If that's the game your in here.......
Yogi says good luck.

🐾🐾 Paw Note:

There's a guy in Hanoi, a smart cookie.   He works for a major Multi National company here as a financial Guru and legal consultant.
He's been here nearly 20 years on & off, and done VERY well with his business.

When privately asked about if he's bought VN real estate.........His answer.

NO.....for the same reason you won't see Federer drive a Kia.😆