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.