For bank appraisals, maybe it’s not all banks, but some will definitely do a physical inspection once things are more serious.
If you haven’t signed anything (I.E. a 斡旋, then there’s nothing preventing you from working with a different agent [or agency if it’s listed at others]). I have no idea what the policy at specific agencies for switching agents though.
I think if you make an offer, the contract usually does state that you need to work with the agency you made the offer with to buy the property. For example, you can’t offer X dollars, then back channel with the owner or another agency to get a lower price.
For negotiating, I don’t have a ton of tips, but anecdotally from hearing different friends experiences it sounds like there isn’t a common pattern. All the listing are always overpriced, but there isn’t a super common pattern for pricing I’m aware of (some are crazy overpriced, some are slightly overpriced). Also some owners are more stubborn then others. In general I’d say start low, but not offensively low and assume you’ll meet somewhere in the middle. Use the recent transaction data to make sure you’re not overpaying and be prepared to walk away.
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Every property is different but my research into the Baoshan area suggested transactions on average occur at about 15-20% below asking price. Not always though, some are very close to asking price, and every once in awhile there were some in the 70s. As others have noted, it comes down to the owner. Some want to sell and go, others don’t mind having it sit empty for years. I’ve been watching one property sit for over 2 years now. I’m aware of another that the owner actually raises the ask price anytime once in a blue moon someone makes a good offer near his ask. So you never know what type of person you are dealing with until you just try.
Thing is I’m seeing people, like my neighbor for one, spending like half a million USD on a concrete box that can be rented for about 30,000NT a month (how long does it take to pay off 15 million NT off of 30k per month?) and another is buying a building with two floors for 1 million USD. Both are fairly old properties, and banks would only finance something like 50% of that (probably because of how old it is??)
I’ve convinced myself that they’re making a really big mistake but they swear that they are making professional financial decisions. I mean my parent’s house is worth something like 800k USD but that’s a house in the SF Bay Area. That house would rent for a minimum of 3000 a month. I should mention it’s way larger than any properties in Taiwan too even though it’s “small”.
What do you think? It really makes me think in Taiwan location is worth 1000 times more than actual house itself.
Location is always a big point, but if you’re buying a condo/apartment, you’re not really owning the land. If you own a house, you can sell the house and someone can come in an knock it down to do whatever the local zoning laws allow. An apartment can only become an illegal office space or cram school, but the upstairs and downstairs are still going to be apartments and the building still remains.
Luxury condos in the US have seen a major downfall (to the point where a Chinese investor pulled out of a project on the third tallest building in Chicago) as wealthy investors have decided that it’s not worth it to own 2 mil USD condos, since they’re only investing in the living space and still have HOA fees to boot. Which is funny, cuz a 2 mil USD condo in Taipei is a far cry from “luxury” absolutely anywhere in the city. But that’s why people cry about population density. Sure, Taipei is dense, but for the size and condition of the space, and considering rent is often less than half the cost of a mortgage, there’s still serious disconnect!
As we are progressing in the (we hope) purchase of the property, I read online there is a deed tax of 6% to pay at some point, but I can’t find anything about this when talking to the real estate agent.
After some months, I felt like an update was needed for whoever is still interested in purchasing in Taiwan.
A few points of data we were able to gather (to demystify the process):
There are several type of properties (residential, commercial, industrial, farmland, etc…)
Foreigners can purchase most of them (depending on your country of origin and reciprocital rules with Taiwan, your mileage may vary).
it is NOT ILLEGAL for foreigers to purchase Farmland at all!
But:
most banks will reject financing farmland purchase for foreigners
while you technically can build a house on the land, (and most of the time nobody will complain), it is also still technically illegal to not use the farmland for …farming (for the first 2~3 years)
because you are a foreigners, chances are you will get more easily in trouble from the legal standpoint (you can’t really sit in the grey area if you are not a local…).
End of the day, regarding the purchase, we were able to find a property, and finance it. Key learnings:
you can find pretty good deals on Industrial/Residential land (as long as not too close from big cities)
financing out of town for foreigners is pretty hard, almost all bank will refuse based on you being a foreigners
Fubon & HSBC were the only one taking the case… (but Fubon was the best option for us)
there isn’t any Loan insurance (as what we have in Europe), so make sure you don’t screw your loan… or the bank will screw you
Loan for foreigners are limited to 70% of the total (just because you are a foreigner )
Rates (for us) hit 1.51% on 20yrs
For evaluation, banks will not go in your property, they may come around (unlikely), but they won’t care about anything else than the outside of building.
Regarding the purchase process:
after negotiating with landlord at the agency, you sign the mandate
mandate declares the escrow company to be used
all contracts are in Chinese (bring a Chinese speaking/reading person)
you will need one of those TW seals (but they can make one for you if you don’t have)
payment goes as follows:
10% + real estate agency fees upfront (in the first week following the deal)
10% second payment ~17 days after deal
10% (yet again) 27 days after deal
70% (balance) when all papers are done (usually 1.5 ~2 months after deal, but this may vary)
on the signature date, you will also be required to pay all stamp/duties etc… (for us it should be less than 150k NTD, I don’t have the calculation on this).
(all payments to escrow company, you get refunded of all payments if you don’t get your loan).
We were able to negotiate a 6month warranty for defect we would not have been able to find (to be repaired at cost of current owners), as well as them fixing any current defects we found. Here again, your mileage may vary.
To apply for the loan you will need:
At least 6 months of salary slips
your employment contract
copy of ID/passports (and original)
bank statements for the last 6months (showing your salary)
proof that this is your bank statement (numbers/names must match somewhere)
you also need a guarantor (ex: can be your wife/husband)
Also:
you can and should put both you and your spouse name on the property (it is the actual standard way of doing it, and does not change/add complexity in any way, don’t listen to the bullshit)
Only the person who pays the loan will have his/her name on it, (the second can and should be the guarantor though…)
Yeah we were exploring the possibility of buying farmland. You need to hold it 2 years and not just let it sit, you have to join the local farm association and actually farm the land. In some cases even a “farm” of solar panels will work. You can build a structure in those first 2 years but it’s limited to 13 or 15 ping (I forget). After 2 years your house can be built at 10% of the land size. And the land must be at least 756 ping to build a house. Many people live in that small initial structure. We’ll probably look for construction land or buy a really old, cheap house and knock it down.
For us, as I have some experience in construction, I checked it myself. But since I am not a professional, I used this as an excuse to negociate some waranty
Either way, you can contract some expert, but they will require down payment, and generally will only work if they can have access to design documents (ex: initial blueprints, etc…).
Not sure if that worth it.
That said, the guarantor is a deal breaker for us single people. There has to be one bank out there that won’t require this. There is no excuse for requiring a guarantor for fixed property.
on this, I wouldn’t know (since I am married), but TBH, finding a bank that will loan to foreigner is quite difficult (as said, only 2 did give it a try, and HSBC is very much not what you want).
In the end, I guess if you are single and want to purchase on a loan, this just adds up to the hardship we tried quite a few banks, all of them declined because of foreigners. The only one which could also work would have been CTBC, but you need to be 3 years if your job, and working for one of the big well-known companies… if this your case, you may be in luck.
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we tried quite a few banks, all of them declined because of foreigners. The only one which could also work would have been CTBC, but you need to be 3 years if your job, and working for one of the big well-known companies… if this your case, you may be in luck.