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Local and international property developers have entered Vietnam in large numbers, building condominium and villa projects.
The units are often off-the-plan or under construction, resulting in a different purchasing process from resale units.
The first step in the purchasing process of new units is to pay the booking fee. In this article, I cover the topics you need to know about the fee.
- What is a property booking fee?
- Is the property booking fee refundable?
- Property Types Requiring Booking Fees
- How much is the property booking fee in Vietnam?
- How can I pay the property booking fee?
What is a property booking fee?
Potential property buyers pay a so-called property booking fee for units in off-plan and under-construction projects.
Developers charge the fees in branded condominium and villa projects where there are a large number of units available.
Paying the property booking fee is the first step in the sales process and allows you to participate in the sales event later on, where more information is shared about the project.
During this event, persons who paid the booking fee can pre-select units as well.
Keep in mind that you don’t necessarily have to attend the official sales event in person, but the agent can do so on your behalf.
After you’ve paid the booking fee, you receive a booking number. You then get priority to participate in the first sales event and to choose units.
Persons that haven’t paid the booking fee must wait until a later stage and when the best units are often sold out. Investors who participate early can secure properties that generate higher capital appreciations and rental yields.
Is the property booking fee refundable?
Yes, the fee is generally refundable. From time to time, agents can also pay the booking fee on behalf of buyers in advance.
Having said that, keep in mind that it can be difficult to transfer the funds back from Vietnam to your country of origin.
Developers can only do so to Vietnamese bank accounts. As such, the developer will have to transfer the money to your agent’s account, or you will have to set up a local bank account.
Property Types Requiring Booking Fees
As mentioned, property booking fees are generally only required for off-plan and under-construction projects. Unit types can include both villas and condominium units.
Even if this article focuses on the official term of ‘property booking fee’ used in the purchasing process of new projects, a similar fee is sometimes paid for resale units.
It’s common that buyers secure resale units by paying a portion of the purchase price upfront, proving their interest to the buyer. The quicker the payment (preferably in cash), the higher the chance that you will secure a unit.
This is common for distressed or discounted units and where investors see great potentials for capital appreciations and/or instant rental incomes.
How much is the property booking fee in Vietnam?
The property booking fees differ depending on the developer and the standard of the project. The property type can also affect the booking fee to be paid.
Rates are generally as follows:
- USD 2,500 for average properties
- USD 5,000 for high-end properties
- USD 10,000 for luxury properties
Contact your agent or the developer for information regarding the booking fee for your selected project. Besides, confirm whether the fee is refundable and how to manage the refund if needed later.
What happens after I paid the booking fee?
The developer hosts the official sales event and where potential buyers and agents participate. You and/your agent must bring your booking number and you will be able to select units at the event.
Around 2 to 3 weeks after the sales event, it’s time to pay the initial deposit. The deposit is usually 10% to 20% of the unit value and not refundable.
The following payments are done monthly and 1% to 3% paid each month, depending on the project and the developer.
The whole payment process as follows:
- Refundable booking fee: USD 2,500 / USD 5,000 / USD 10,000
- Deposit Agreement: 10% to 20% of property value
- Installments: 1% to 3% per month – up to 50% of property value
- Hand Over: 45% (total of 95% paid)
- Hand over and issuing Certificate of Ownership: 5%
- Maintenance fee/sinking fund: 2%
Total amount: 102% due to the maintenance fee of 2%