Buying Property Procedure

Buying a property in Singapore is a huge investment and often require due diligence from the buyer to ensure that the property is purchase at a good price and suit the needs of the owner. This is especially important if you are a first time property buyer.

Generally buying a property requires at least 2 to 3 months for the whole transaction to complete and for a HDB unit, the duration might even stretch longer, again depending on the volume of sales. This transaction duration does not include the homework that the owner has to do prior to committing the purchase. These homework include self discovery, understand your reason for buying a property, working out on your finances, understanding the property transaction process, spending your weekend to go apartment hunting and liaising with all kinds of property agents.

Below are some pointers which we would like to share when purchasing an apartment.

Before Purchase- Due Diligence

1. Identification of your main reason for purchasing the apartment. Are you purchasing for investment purpose of to stay in.
   • Buying a property for Investment purpose, Investors would go for apartments that offer them a potential high rental yield or return of investment.
2. Understanding your Finances
   • Property buyer needs to know firstly the payment structure when purchasing a private property. Generally the payment structure is as below.
     5% cash + 15% ( CPF or a combination of cash and CPF) + 80% bank loan.
   • Property buyers also need to know their own finances well. How much money the bank is willing to lend you base on your current income and liabilities. Often Property buyers make the mistake assuming that the bank will lend them the money without taking into consideration that banks often have stringent rules and regulations on mortgage loan.
   • We strongly advise all property buyers to obtain an approval in principle from the bank on the amount of loan they can borrow base on their current financial commitment before making any purchase commitment. This will help the property buyers to have a good understanding on what kind of price-range apartment they can afford and from there narrow down on apartment that fits that bill.
   • Stamp duty and legal fee charges have to be taken into consideration as well.
3. Talk to not one but different property agents
   • Property buyers should not be shy to talk to different property agents to verify information credibility and to gather different insights and opinions.
4. Spending precious weekend to visit new launches and to go for house viewing.

Entering into a transaction.

When you have indentified your ideal apartment and is ready to make the purchase. The following steps will take place.

• Be prepared to pay for a 1% deposit to the seller and in exchange you will receive the Options to purchase documentation from the seller.
• You have exactly 14 days to exercise the Option to Purchase. Which means you have 2 weeks time frame to further decide if you wish to commit to the purchase. If you do not exercise the Option to Purchase document within 14 days, you will forfeit the 1% deposit. If you choose to commit the purchase, you will need to endorse on the Option to purchase documentation and submit to the seller solicitor together with the remaining 4% cash payment. You may endorse the Option to purchase at the presence of your own solicitor and have your solicitor action on your behalf.
• You will also be required to pay for the Stamp Duty. Stamp Duty will have to be paid using Cash upfront and upon completion of your transaction. CPF will then reimburse the stamp duty fee back to you if you wish to use your CPF monies to pay for the stamp duty.
• Legal fee. You may have to top up the balance of the legal fee depending on the amount of the legal fee and the subsidy that your bank is offering to you when you acquire the bank loan.
• The whole transaction process will take another 8 weeks or so. Your appointed solicitor will assist you to lodge a caveat on the proper and handle the rest of the required documentation with the various institutions.

Property Buyer Mortgage Consultants are experienced in the property buying process and can act as Property Buyer advisors to guide buyers into avoiding dishonest property agents.

Property Buyer Mortgage Consultants do NOT receive commission from Property transactions of Buying and Selling.

About Property Buyer Mortgage Consultants

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