Every investment has a certain risk. Foreigners interested in buying real estate in Vietnam should be aware of the following concerns.
Top 4 Risks of Buying in Vietnam
Missing legal requirements for a home sale
The law in Vietnam states that property developers are not allowed to offer houses to buyers. Property developers must first achieve minimum standards such as project completion, off-plan sales agreement approval, and financial arrangements before selling a home to customers off-plan.
Therefore, make sure to check that a property developer has met all the pre-requisites before purchasing any real estate in Vietnam.
It is not easy to get the pink book as a foreigner
When going through a real estate purchase process in Vietnam, you need to understand the many acceptable conditions for real estate acquisition and ‘pink book’ award. Buying real estate in Vietnam is easy, but getting the pink book as a foreign buyer is considerably more difficult.
The Red Book and the Pink Book are nicknames for two major real estate papers published in Vietnam. The red book was a certificate of land use rights issued by the Ministry of Natural Resources and Environment. The pink book was a document issued by the Ministry of Construction that listed the rights to ownership of real estate or development/construction activities.
Confusing Property Features
Property developers may not be able to clearly explain the use of their properties, leading to confusion among international buyers or investors. Some property 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 can face significant hurdles in the process if the pink book is not released on time. Before assigning the purchase and sale agreement to the new buyer, make sure that the property developer applies for the pink book.
Stay alert to the risks of purchases
Buying property in Vietnam as a foreigner is not an easy task. Apart from these common risks, you have to go through a long and complicated process before owning it.
There are companies that can make this easier for you. Home base is a real estate technology company that offers more property alternatives to both foreigners and locals, as well as up to 90% down payment assistance. They use a proven model that is popular in the United States (similar to Divvy Homes, Zillow, and Reddoor). It is backed by well-known companies and private inventors from around the world, including Y Combinator, Partech Partners, Iterative VC and VinaCapital. Homebase makes home ownership more accessible to everyone in Southeast Asia.
Call (+84) 964 245 404 or fill in a contact form if you want to know more about Homebase.