Every investment has some level of risk. Foreigners interested in purchasing real estate in Vietnam should be aware of the following concerns.
Top 4 risks of buying in Vietnam
Missing legal prerequisites for a home sale
The legislation in Vietnam states that project developers are not permitted to offer houses to purchasers. Project developers must first achieve minimal standards such as project completion, off-the-plan sale agreement approval, and financial arrangements before selling an off-the-plan home to customers.
Therefore, make sure to check if a project developer has fulfilled all the precedential requirements before buying real estate in Vietnam.
It’s not easy to get the pink book as a foreigner
When going through a property purchase process in Vietnam, you must comprehend the many acceptable circumstances for real estate acquisition and ‘pink book’ granting. Purchasing real estate in Vietnam is simple, but obtaining the pink book as a foreign buyer is substantially more difficult.
The red book and the pink book are nicknames for two key real estate papers published in Vietnam. The red book was a land use rights certificate given by the Ministry of Natural Resources and Environment. The pink book was a document provided by the Ministry of Construction indicating rights to property ownership or development/construction activity.
Confusing property functions
Project developers may fail to clearly explain the uses of their properties, leading to confusion among international purchasers or investors. Some project developers even provide customers with false information about the owners.
Useful article: Everything You Need to Know About Property Valuation in Vietnam
When the new buyer does not have the pink book, the sales and purchase contract is assigned.
Foreign real estate buyers may face considerable hurdles during the process if the pink book is not issued on time. Before assigning the sales and purchase agreement to the new buyer, ensure that the project developer applies for the pink book.
Stay alert on the risks of purchasing
Buying property as a foreigner in Vietnam is no easy task. Aside from these common risks, you’ll have to go through a long and complicated process before owning.
There are companies that can help make this easier for you. Homebase is a real estate technology company that offers greater ownership alternatives to both foreigners and locals, as well as up to 90% down payment assistance. They use a tried-and-true model that is popular in the United States (similar to Divvy Homes, Zillow, and Reddoor). It is backed by well-known corporations and private inventors from across the world, including Y Combinator, Partech Partners, Iterative VC, and VinaCapital. Homebase makes homeownership more accessible to anybody in Southeast Asia.
Call (+84) 964 245 404 or fill out a contact form if you want to learn more about Homebase.
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Source: Vietnam Insider