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Posted on 17 Apr 2025
33216
Let me explain a bit about this.
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#What is Sell with Right of Redemption? #Why do it?
When someone needs a lump sum of money to run a business,
moving money around or finding investment funds
can happen to anyone.
But to ask for funding from someone,
you must have collateral.
For example: gold, cars (with a title), and real estate.
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Sell with right of redemption usually refers to using real estate as collateral.
Real estate can be any type:
land, houses, condos, warehouses.
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In Bangkok, almost all types are accepted.
But in the suburbs or upcountry,
they mostly only accept vacant land.
Because it can be used for further benefit.
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The property title used as collateral
must usually be a clear title deed.
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Clear title deed means
it has no encumbrance with anyone.
You have full ownership rights
and can transact immediately.
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If mortgaged to the bank, under court consideration,
or in inheritance settlement,
these do not count as clear title deeds.
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#Let’s understand some terms
Tidt Sapp (Property Side) =
An agent who knows the landowner directly.
Tidt Thoon (Investor Side) =
An agent who knows the investor directly.
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Sell with right of redemption / Mortgage =
The landowner needs money
but cannot get a loan from the bank
or gets less than needed.
So they use their land as collateral
to get the funds needed.
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Sell with right of redemption and mortgage
may look similar at first glance
but they have different details.
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In sell with right of redemption,
the buyer immediately gets ownership of that land.
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In mortgage,
the buyer does not get ownership (must sue to seize).
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Landowners like mortgage
because the interest/fees are lower than redemption sales.
But some choose redemption sales
because they can get a higher loan amount.
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However, investors prefer redemption sales
because if the landowner does not redeem
within the agreed period,
the investor can sell the land immediately
without having to sue as in a mortgage.
At least they get something in hand.
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Interest rates for redemption sales/mortgage
range from 9-15% per year
(standard legal max interest rate is 15%).
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Normally, investors don’t really want to seize properties to sell.
They only want interest from the redemption or mortgage.
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Funding criteria for redemption sales/mortgage
Redemption sales: 40-60% of Land Department’s appraised value.
Mortgage: 30-40% of appraised value.
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Some might use private appraisal rates.
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But if the location is hot and in high demand,
they might give 40-60% of the market price.
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#Properties that investors do not accept for redemption sales
Hidden full sale price
As mentioned earlier,
investors use Land Department appraisal as the base.
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So if you send a property
and ask for an amount close to the market price,
it’s basically a full sale price.
These properties often leave investors stuck
and hard to resell.
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Only a few prime locations,
like early to mid Sukhumvit,
may consider using market price as a base
to compete with other investors.
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Vacant land with deep water ponds covering half the plot.
Investors can’t utilize it.
Whoever buys must bear the cost of backfilling.
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Land under Nor Sor 3 Kor title deed
but adjacent to forest reserve.
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Properties previously pledged in redemption/mortgage
or partial mortgage.
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No confirmation letter for redemption/mortgage.
Without this letter,
investors rarely visit the site.
They often face last-minute tricks at the Land Office.
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But if there’s a confirmation letter,
they can notify the officer to enforce redemption.
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Land under high-voltage power lines.
As in recent news,
the land is useless.
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Land already pledged to another investor
or fully mortgaged with a bank.
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Properties where appraisal book value is unusable.
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Properties circulating online
for over 6 months or over a year.
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Land with narrow access roads
or easement paths only 3 meters wide.
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Narrow frontage / insufficient road access
or noodle-like land plots.
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Land with easement burden for many inner plots.
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Landlocked plots.
But if easement documents are attached,
it might be reconsidered.
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Title deed just recently traded within 3 months.
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Properties with multiple owners
must have consent letters from all.
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In the world of mortgage and redemption,
there is no such thing as luck.
Not too hard,
but not as easy as you might think.
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Any agent wanting to handle redemption sales
must understand the area
and have a certain level of pricing data.
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You need to know
which investor accepts what type of property,
in which areas,
and for how much.
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Because each investor
has different preferences and specialties.
For example:
Investor A likes condos,
housing projects, or land subdivisions in Bangkok,
budget no more than 10 million.
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Investor B likes vacant land
in provincial cities,
budget no more than 5 million.
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Investor C likes houses/land
only in Sukhumvit zone,
budget can exceed 100 million.
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Having property data alone is not enough.
You must also have investor data.
So you can screen properties properly for them.
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If you only forward without pre-screening,
most will be junk properties.
Investors will see you as unprofessional.
Your properties will lose appeal.
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Worst case: same property sent by multiple agents,
and the investor chooses to work with someone else.
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Therefore,
emphasize working professionally.
Analyze the property, location, price for them.
Summarize clearly.
This shortens their decision time
and you get paid faster too.
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There are investors everywhere, lots of them.
How brightly you shine for them
is your homework to prove yourself.
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Once enough investors approach you,
that is a gold mine.
You will have endless income from redemption deals.
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Need liquidity? Want to do redemption sale?
To fund your business.
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Buy, sell, rent all types of properties
in Bangkok and surrounding areas.
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Redemption sale / Mortgage
1–1,000 million baht.
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Debt settlement with banks.
Property buy-out to relieve burden.
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Complete all property transactions.
Need advice? DM us.
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CR.
Some information from Khun Tom
Photos by Sansiri and Bangkok Asset.
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