Isan Real Estate Co., Ltd.
Business Registration number: 0415559001917
303 Moo 6, Ban Pa Kao, Tambon Paktob,
Amphur Nong Han, Udon Thani, 41130 Thailand
Tel: +66943738998, +66851798729
www.isanrealestate.com/th www.isanrealestate.com
Email: connect@isanrealestate.com
How a Real Estate Broker/Consultant Appraises Property in Thailand:
Complete Process with Due Diligence
With respect to all readers, many armchair critics choose to comment on property prices without ever visiting a property. This post is directed to all those interested in or involved with the Real Estate market in Thailand, to explain, as best we can, how an accurate appraisal price is derived.
To be fair, when appraising a property, there is a great deal of detail that needs to be researched before presenting an opinion on the current property or business markets. We assure you it is not anything like a Lotto game, where you wait for numbers to come out and then use those. We ask you to read this post as a guide on how a professional company or appraiser prepares appraisal prices for clients selling and those wishing to buy with confidence. A professional company or appraiser should always follow this methodology. Thailand’s real estate market is highly deregulated and prone to misleading information, and, to be honest, scams.
Property appraisal in Thailand requires combining valuation methodology with thorough legal due diligence to ensure both accurate market value and legal security. Here’s the comprehensive step-by-step process:
PART A: PRE-APPRAISAL PHASE
Step 1: Initial Client Consultation & Terms of Engagement
Objective: Establish a clear scope and purpose of the appraisal
Actions:
- Meet with client to understand their needs (sale, purchase, financing, investment analysis)
- Define appraisal purpose (market value, insurance, divorce settlement, mortgage)
- Agree on fees, timeline, and deliverables
- Sign engagement letter/contract
- Determine which valuation approach is most appropriate
Key Questions:
- Why is the appraisal needed?
- What is the property type (residential, commercial, land, condo)?
- What level of detail is required?
- Are there any time constraints?
Step 2: Request Initial Documents from Client/Seller
Objective: Gather all available property documentation
Required Documents:
- Title Deed (front and back copies)
- Chanote (Nor Sor 4 Jor) – Full freehold title
- Nor Sor 3 Gor – Certificate with measured boundaries
- Nor Sor 3 – Certificate without precise boundaries
- Or Chor 2 – Condominium title
- House Registration Book (Tabien Baan) – if applicable
- Building Permits – for any structures
- Previous Sale Agreements – transaction history
- Survey Maps and Plans
- Tax Payment Records
- Company Registration Documents – if owned by a Thai company
- Condo Documents (if applicable):
- Condominium regulations
- Juristic person financial statements
- Meeting minutes
Note: If the seller cannot provide documents, your team can obtain them from government authorities
PART B: LEGAL DUE DILIGENCE AT LAND OFFICE
Step 3: Title Deed Verification at Land Office
Objective: Confirm ownership, authenticity, and legal status
Process:
- Visit the Local Land Office that has jurisdiction over the property
- Each province/district has its own Land Office
- You cannot do this remotely – a physical visit is required
- Submit Application for Document Review
- Present authorisation letter from property owner (or their consent)
- Request access to the property’s folder
- Land Office maintains paper files (not digital)
- Review the Title Deed Front Side
- Title Deed Type: Verify it’s Chanote (red emblem), Nor Sor 3 Gor (green/black emblem), or Nor Sor 3 (black emblem)
- Land Plot Number (เลขที่ดิน)
- Land Office Code and location
- Land Area: Stated in Rai, Ngan, Talang Wah
- Map/Survey Sketch: Showing boundaries and adjacent plots
- Owner’s Name: Must match seller’s ID exactly
- Review the Title Deed Back Side (CRITICAL)
- ALL transactions must be registered on the back of the title deed
- Transaction History: Every sale, transfer, and inheritance is recorded chronologically
- Current Owner Verification: The Last registered entry shows the current owner
- Encumbrances Registered: All liens, mortgages, leases, easements, usufructs
Title Deed Types Comparison:
| Type | Ownership Rights | Transferability | Survey Accuracy | Recommendation |
| Chanote (NS4) | Full freehold ownership | Freely transferable | High (GPS-based) | Best – accept for purchase |
| Nor Sor 3 Gor | Use and benefit rights | Transferable, can be mortgaged | Moderate (measured) | Acceptable – can upgrade to Chanote |
| Nor Sor 3 | Use and benefit rights | Transferable with neighbour consent | Low (not surveyed) | Risky – boundary disputes are common |
| Possessory Right | Occupation only | Not transferable | Undefined | Do NOT recommend |
Step 4: Encumbrance Check
Objective: Identify all legal claims, restrictions, or third-party rights
What to Check For:
A. Financial Encumbrances:
- Mortgages (บันทึกจำนอง): Bank loans secured against property
- Liens: Claims by creditors
- Unpaid taxes or fees
B. Rights Registered by Third Parties:
- Long-term Leases (more than 3 years – must be registered)
- Usufruct (lifetime use rights)
- Superficies (right to build on another’s land)
- Easements/Servitudes (rights of way, utility access)
- Habitation Rights
C. Restrictions:
- Repurchase Rights (seller retains the right to buy back)
- Pre-emption Rights (another party has the first right to purchase)
- Government Restrictions (protected zones, agricultural land restrictions)
Critical Rule: Under Thai law, all encumbrances MUST be registered at the Land Office to be valid. If it’s not on the title deed, it’s not legally binding.
Step 5: Ownership History Verification
Objective: Trace the legal chain of ownership to confirm a valid title
Process:
- Review Chronology of Ownership
- Check every registered transaction on the title deed back
- Verify continuous chain from original issuance to current owner
- Confirm no gaps or suspicious transfers
- Verify Original Title Issuance
- How was the land originally titled?
- Was it properly upgraded from lower-level documents?
- Any government land allocation schemes involved?
- Check for Title Disputes
- Look for annotation of pending legal cases
- Check if any court orders affect the property
- Ask the Land Office about known disputes
- Overlapping Titles (Common Issue)
- Verify no duplicate titles exist for the same land
- Check with adjoining plot owners if necessary
- Review of historical boundary conflicts
Step 6: Land Survey & Boundary Verification
Objective: Confirm physical land matches title deed specifications
Process:
- Physical Site Inspection
- Visiting the property location
- Identify boundary markers (ลูกหลักเขต – Lak Chet)
- Chanote titles have numbered permanent markers
- Verify Land Area
- Compare physical land size to title deed area
- Use GPS tools or hire a Department of Lands (DOL) surveyor for accuracy
- Recommendation: For significant purchases, request an official DOL survey
- Check Boundaries with Neighbours
- Nor Sor 3 titles require neighbour confirmation of boundaries
- Look for encroachment issues
- Verify access to public roads
- Identify Survey Discrepancies
- Chanote: GPS-surveyed, ±5cm accuracy
- Nor Sor 3 Gor: Aerial survey, moderate accuracy
- Nor Sor 3: Hand-drawn, prone to errors
Common Boundary Issues:
- Overlapping boundaries (rural/hillside areas)
- Encroachment by neighbours
- Discrepancies between the title area and the physical area
- Unrecorded easements or access paths
Recommendation: Always conduct Land Office boundary verification (฿2,000-5,000) before finalising purchase
Step 7: Zoning, Land Use & Regulatory Compliance
Objective: Verify the property can be used as intended
Check:
- Zoning Classification
- Residential, commercial, agricultural, or industrial designation
- Verify intended use aligns with zoning laws
- Check for any proposed rezoning
- Building Permits & Construction Compliance
- Validity of existing building permits
- Compliance with local construction regulations
- Building setbacks and height restrictions met
- Environmental Restrictions
- Environmental Protection Zones
- Coastal management zones (if near water)
- Agricultural land conversion restrictions
- Forest reserve areas
- Foreign Ownership Restrictions (Critical for foreign buyers)
- Foreigners CANNOT own land in Thailand (except in exceptional cases)
- Foreigners CAN own condos (up to 49% of the building)
- Check if the property is in a restricted zone near borders/military areas
- Land Use Certificates
- Agricultural land may require conversion permits for residential use
- Check Land Office classification
Step 8: Verify Tax Payments & Outstanding Liabilities
Objective: Ensure no unpaid taxes or fees
Check:
- Land and Building Tax (ภาษีที่ดินและสิ่งปลูกสร้าง)
- Introduced in 2020, replaces the older house/land tax
- Check payment status with the local municipality
- Property Transfer Fees from previous transactions
- Verify all past transfers paid required fees
- Utilities
- Water, electricity accounts are clear
- No outstanding balances transfer to the new owner
- Condominium Fees (if applicable)
- Check juristic person records for unpaid fees
- Review sinking fund contributions
Step 9: Additional Due Diligence Checks
A. For Company-Owned Property:
- Verify company registration and good standing
- Check company ownership structure (foreign nominee concerns)
- Review shareholder list
- Confirm the company has the authority to sell
B. For Condominiums:
- Foreign Quota: Verify building hasn’t exceeded 49% foreign ownership
- Juristic Person Financial Health: Review management accounts
- Building Condition: Check maintenance records
- Meeting Minutes: Review for planned special assessments
C. For Leasehold Properties:
- Verify lease registration (if over 3 years)
- Check lease terms: duration, renewal options, transferability
- Confirm rent payment records
- Verify lessor’s ownership of underlying land
PART C: PROPERTY VALUATION
Step 10: Physical Property Inspection
Objective: Assess property condition and features
External Inspection:
- Location Assessment:
- Proximity to amenities (schools, shops, hospitals, transport)
- Neighbourhood quality
- Road access and infrastructure
- Flood risk zones
- Land Evaluation:
- Land size, shape, topography
- Landscaping quality
- External structures (walls, gates, parking)
- Building Exterior:
- Roof condition, age, materials
- Wall condition (cracks, water damage, paint)
- Windows and doors quality
- Overall structural integrity
Internal Inspection:
- Layout & Space:
- Number of bedrooms, bathrooms
- Living areas, kitchen, dining spaces
- Floor plan efficiency
- Condition Assessment:
- Flooring quality and condition
- Wall finishes
- Ceiling condition
- Plumbing and fixtures
- Electrical systems
- Air conditioning units
- Renovations & Improvements:
- Recent upgrades noted
- Quality of materials used
- Compliance with building codes
- Special Features:
- Swimming pool, garden, garage
- Security systems
- Built-in furniture
- Depreciation based on the age of the property
Step 11: Market Research & Comparable Sales Analysis
Objective: Gather data on similar properties and market conditions
Data Collection:
- Identify Comparable Properties (“Comps”)
- Same area/neighbourhood
- Similar property type and size
- Similar age and condition
- Sold within the last 3-12 months (not easy to verify in Thailand)
- Sources of Market Data:
- Recent sales registered at the Land Office
- Current listings on property portals
- Real estate agent databases
- Property developer price lists
- Bank appraisal reports
- Market Trend Analysis:
- Supply and demand dynamics
- Price trends (rising, stable, declining)
- Days on market (absorption rate)
- Economic conditions affecting the market
- Interest rates and financing availability
- Location Factors:
- Infrastructure developments (MRT, highways)
- Government projects (Smart City, high-speed rail)
- Employment hubs nearby
- School districts and amenities
Step 12: Select and Apply Valuation Method(s)
Thailand uses three internationally recognised valuation approaches:
METHOD 1: Market Comparison Approach (Most Common for Residential)
Best for: Residential properties, condos, land with active market transactions
Process:
- Select 3-5 comparable properties that have sold recently
- Record sale prices of comparables
- Identify differences between the subject property and comparables
- Adjust comparable prices:
Adjustment Factors:
- Location: Better/worse location (+/- 5-15%)
- Size: Larger/smaller (+/- per sqm)
- Age: Newer/older (+/- 5-20% depending on condition)
- Condition: Better/worse maintenance (+/- 10-25%)
- Features: Pool, garage, renovations (+/- value of feature)
- View: Scenic view, privacy (+/- 5-15%)
- Time: Market changes since comparable sale (+/- based on trend)
- Calculate adjusted prices for each comparable
- Reconcile values: Weight the most similar comparables more heavily
- Arrive at the market appraisal estimate
Example:
- Subject Property: 3BR house, 200 sqm, 10 years old, good condition
- Comparable 1: 3BR, 180 sqm, 8 years old, sold ฿3.5M
- Adjust +10% for smaller size = ฿3.85M
- Comparable 2: 3BR, 220 sqm, 12 years old, sold ฿4.2M
- Adjust -8% for larger size = ฿3.86M
- Comparable 3: 3BR, 200 sqm, 10 years old, with pool, sold ฿4.5M
- Adjust -12% for pool feature = ฿3.96M
- Reconciled Value: ฿3.85M – ฿3.95M range → Estimated Market Value: ฿3.9M
METHOD 2: Cost Approach (For Special Properties)
Best for: New construction, special-purpose buildings (schools, hospitals), properties with few comparables
Process:
- Calculate Land Value
- Use market comparison for land in the area
- Land value per sqm × land size
- Estimate Replacement Cost New
- Cost to build an identical new structure today
- Include: Materials + Labor + Overhead + Contractor profit
- Use current construction cost per sqm (฿15,000-40,000/sqm typical)
- Calculation Depreciation
- Physical Deterioration: Wear and tear from age/use
- Functional Obsolescence: Outdated design, inefficient layout
- Economic Obsolescence: External factors (neighbourhood decline)
- Typical depreciation: 2-3% per year for residential buildings
- Calculate Depreciated Replacement Cost
- Replacement Cost New – Accumulated Depreciation
- Add Land Value
- Total Property Value = Land Value + Depreciated Building Value
Example:
- Land: 400 sqm × ฿50,000/sqm = ฿20M
- Building: 300 sqm × ฿25,000/sqm = ฿7.5M (new)
- Depreciation: 10 years old × 2.5%/year = 25% = ฿1.875M
- Depreciated Building: ฿7.5M – ฿1.875M = ฿5.625M
- Total Value: ฿20M + ฿5.625M = ฿25.625M
METHOD 3: Income Approach (For Investment Properties)
Best for: Rental properties, commercial buildings, hotels, investment analysis
Two Sub-Methods:
A. Direct Capitalisation Method
Process:
- Calculate Gross Rental Income
- Annual rent from property
- Deduct Vacancy & Collection Loss
- Typical: 5-15% depending on market
- = Effective Gross Income
- Deduct Operating Expenses
- Property taxes
- Insurance
- Maintenance and repairs
- Property management fees
- Utilities (if owner pays)
- Common area fees
- Do NOT include: Mortgage payments, income tax
- = Net Operating Income (NOI)
- Determine Capitalisation Rate
- Market rate of return for similar properties
- Thailand typical: 4-8% depending on property type and risk
- Higher cap rate = higher risk/lower value
- Calculating Property Value
- Value = NOI ÷ Capitalization Rate
Example:
- Gross Annual Rent: ฿1,200,000
- Vacancy Loss (10%): –฿120,000
- Effective Gross Income: ฿1,080,000
- Operating Expenses (30%): –฿324,000
- Net Operating Income: ฿756,000
- Capitalisation Rate: 7%
- Property Value: ฿756,000 ÷ 0.07 = ฿10.8M
B. Discounted Cash Flow (DCF) Method
Process:
- Project future rental income over hold period (5-10 years)
- Forecast expenses and vacancy rates
- Calculate annual net cash flows
- Estimate property sale price at the end (terminal value)
- Discount all cash flows to present value using the appropriate rate
- Sum of present values = Property Value
More complex, used for sophisticated investment analysis
Step 13: Reconcile Multiple Valuation Methods
Objective: Arrive at the final value opinion
Process:
- Compare results from different methods
- Weight each method based on:
- Property type (residential favours market approach)
- Data availability (sufficient comparables?)
- Purpose of valuation (investment favours income approach)
- Consider qualitative factors:
- Market momentum
- Unique property features
- Buyer motivation (typical vs. special use)
- Arrive at the final market value opinion
Example Reconciliation:
- Market Comparison Approach: ฿8.5M (weighted 60%)
- Cost Approach: ฿8.2M (weighted 20%)
- Income Approach: ฿9.0M (weighted 20%)
- Final Value Opinion: ฿8.6M
Step 14: Consider Market Conditions & Risk Factors
Adjustments Based On:
- Market liquidity: How quickly can property sell?
- Economic outlook: GDP growth, employment trends
- Interest rates: Financing costs affecting affordability
- Government policy: Tax changes, foreign ownership rules, infrastructure projects
- Location-specific risks: Flood zones, political instability, oversupply
- Property-specific issues: Legal complications, structural problems
PART D: REPORTING & DELIVERABLES
Step 15: Prepare Comprehensive Appraisal Report
Report Contents:
1. Executive Summary
- Property address and description
- Appraised value
- Valuation date
- Purpose of appraisal
2. Property Identification
- Legal description (title deed number, Land Office)
- Title deed type and ownership
- Land area and building size
- Zoning and land use classification
3. Due Diligence Findings
- Title verification results
- Encumbrance status
- Ownership history summary
- Boundary verification
- Regulatory compliance
- Any red flags or concerns
4. Physical Property Description
- Location and access
- Land characteristics
- Building description and condition
- Special features and improvements
- Photos and site plans
5. Market Analysis
- Area overview and trends
- Supply and demand dynamics
- Comparable sales data with adjustments
- Market value indicators
6. Valuation Methodology
- Approach(es) used and rationale
- Detailed calculations for each method
- Comparable property analysis with adjustment grids
- Income/expense projections (if applicable)
7. Reconciliation & Final Value Opinion
- How methods were weighted
- Final market value conclusion
- Value range (if appropriate)
8. Assumptions & Limiting Conditions
- What was assumed (e.g., clear title, structural soundness)
- Limitations of the appraisal
- Caveats and disclaimers
9. Certification & Signature
- Appraiser credentials and license
- Statement of independence
- Signature and date
10. Appendices
- Copies of the title deed
- Survey maps
- Photos
- Comparable sales data sheets
- Market data sources
Step 16: Present Findings for Client
Deliverables:
- Written Appraisal Report (full or summary format)
- Executive briefing meeting to discuss findings
- Answer client questions about methodology and value
- Provide recommendations:
- Is the property reasonably priced?
- Any legal/title concerns to address?
- Investment viability (if applicable)
- Suggested offering price (for buyers)
- Suggested listing price (for sellers)
SUMMARY CHECKLIST: Thailand Property Appraisal Process
Due Diligence Checklist:
✓ Title deed verified at the Land Office
✓ Ownership confirmed and history traced
✓ Encumbrances checked (mortgages, leases, liens)
✓ Boundary survey verified with markers
✓ Land area matches the title deed
✓ Zoning and land use compliance confirmed
✓ Building permits validated
✓ Tax payments up to date
✓ No pending legal disputes
✓ Foreign ownership restrictions reviewed (if applicable)
✓ Environmental restrictions checked
✓ Access to public roads confirmed
✓ Neighbouring plot owners consulted (for Nor Sor 3)
Valuation Checklist:
✓ Physical property inspection completed
✓ Comparable sales identified and analysed
✓ Market trends researched
✓ Appropriate valuation method(s) selected
✓ Calculations performed with adjustments
✓ Multiple methods reconciled
✓ Market conditions factored in
✓ Final value opinion determined
✓ Comprehensive report prepared
✓ Client presentation delivered
Key Takeaways for Thailand Property Appraisal
- Legal due diligence is non-negotiable – Never skip Land Office verification
- Chanote is best – Always prefer a full freehold title for foreign buyers
- Everything must be registered – Unregistered encumbrances are not valid
- Physical inspection is mandatory – Title alone doesn’t tell the whole story
- Use multiple valuation methods – Triangulate for accuracy
- Market comparison is king – For residential properties, comps are most reliable
- Hire licensed valuers – For official purposes (bank loans), use SEC/Valuers Association certified appraisers
- Budget 2-4 weeks – Thorough appraisal with Land Office checks takes time
- Foreigners need to take extreme care – Land ownership restrictions, nominee structures, legal compliance
- Document everything – Photos, measurements, comparable data, all sources
This comprehensive approach protects both the appraiser’s credibility and the client’s investment security in Thailand’s complex property market.
Disclaimer: This document is produced for informational purposes only. We do not claim to be legal professionals. If in doubt, please consult your legal advisor.
© Isan Real Estate Co., Ltd. 2025
Author: Ernie Draper, Managing Director, Isan Real Estate Co., Ltd.