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
- By entering into a Sales and Purchase Agreement
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.
A Definite and Easy Guideline on how to buy Singapore Real Estate for Investment if you are a Foreigner
First off, we need to know the requirements for foreign investors who wishes to own a piece of Singapore real estate. We know that the Singapore government has relaxed the rules of foreign real estate ownership since the 1970s till now. Defining the term Foreigner in Singapore contacts, as long as you’re not a:
- Singapore citizen
- Singapore company
- Singapore LLP (Limited Liability Partnership)
- Singapore society
You’ll fall under the category as a foreigner in Singapore. Restrictions apply on the type of property you would like to buy.
Types of Property That Foreigners are Restricted To:
- You will need relevant approval from authorities before you can acquire the following:-
- Vacant residential land
- Landed property such as detached/ semi-detached/ terrace houses
- Landed property in strata developments which are not approved condominium developments
- Shophouses which are in residential zones
- All the apartments or the whole units in a particular condominium/ project (making you the possible owner of a piece of land)
- Leasehold estate in restricted resdential property for a term not exceeding 7 years
- HDB flat purchased directly from HDB
You are allowed to purchase without prior approval:
- Any apartment within a building
- Any unit in an approved condominium under the Planning Act
Which gives you ample room for investment, since Singapore land is scarce, sound fundamentals and growing population, the demand for homes will only rise.
Next, we’ll cover the transaction process of how to buy your own property as a foreigner even if you haven’t stepped onto this sunny Singapore shore before.