Continuing from where we left, we’ll now can up the process of acquiring a piece of real estate in Singapore. There are generally two ways of purchasing a private residential property in Singapore.
By Way of an Option to Purchase
This is the more common way of transacting. You will have to come up with an initial 1% of the purchase price (we call it the “option money”) in exchange for the Option to Purchase.
Your are usually given 14 days to decide whether to proceed with the purchase. If you decide to proceed, exercise the option by signing and forward it to the seller’s solicitor together with another 4% of the purchase price.
Note if you think you would want to abandon your intention to purchase, the seller (vendor) will be entitled to forfeit your option money.
Completion of sale will usually be 8 – 12 weeks after exercising the option. This period allows both solicitors to seek relevant authority permissions, lodging a caveat and check whether the property title is make good.
By Sales and Purchase Agreement
Less common way to transact (example: developer sale). You usually pay a deposit of 5% to 10% usually of the purchase price. There’s no backing out upon signing a Sales and Purchase Agreement unless the seller (vendor) is unable to fulfill certain conditions in the agreement.
But Before Purchasing..
Before signing any Option to Purchase or Sales & Purchase agreement, always be prudent and ask your Realtor to vet the clauses properly for you. And to be on an even safer side, you can always forward the copy of Option to Purchase for your solicitor to vet everything is A-okay.
Your Realtor can always use an Offer to Purchase with the words ‘Subject to Contract’ added to be on tbe safe side in your favor pending on situations. Remember to add these words at the back of your cheque as well.
Hi,
What is the schedule for a property purchase?
Like in the case of an Option to Purchase, understood that the 1st two weeks 5% must be given, how about the rest?
Hi Eric,
If you’re talking about a standard purchase for an uncompleted project directly from the Developer, you suppose to
Pay a booking fee of 5% upfront
Exercise your option with 15% after receiving your S&P agreement (which should reach you within 3 weeks usually) 8 weeks from option date
The disbursement of your remaining funds (whether you’re using the Bank, or using cash) will be as follow:-
Foundation Work – 10%
Reinforced Concrete Framework – 10%
Brick Walls – 5%
Ceilings – 5%
Doors & Window Frames – 5%
Carparks, Roads and Drains – 5%
Temporary Occupation Period (TOP – handing over of keys) – 25%
Certificate of Statutory Completion (CSC) – 15%
Hi Benson,
Thanks for the info.
What about the purchase of a completed one?
I guess that until the option part it’s the same with surely the stamp duty + the rest of the amount.
1% – For your Option Paper
4% – To exercise your option in front of your conveyancing lawyer (usually within 2 weeks)
— Stamp Duty is suppose to be paid within 2 weeks after exercising option, but your solicitor usually will arrange for both to be done during the exercise.
The remaining 95% depends on whether you’re taking a loan from the bank and the amount of CPF/ or cash top up you need. This schedule is already set in your option paper. Usually 8 – 12 weeks.