FAQs on Buying a Property, Condo or Apartment in Singapore |
| Some things you need to know about buying property, condo or apartment in Singapore |
| What are some things to consider? |
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• Your budget
• Size of property
• Age of property
• Location
• Partially or fully furnished
• Other requirements (balcony, seaview, etc)
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| Will I need a solicitor? |
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You will need one to act in purchase, to act in mortgage and to act in withdrawal of funds if you are using your CPF.
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How can I finance my property?
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You can get a bank loan (mortgage). Typically, Singaporeans can borrow up to 90% of the purchase price, and foreigners 80%.
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| Can I use my Central Provident Fund? |
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You can use your CPF to pay the deposit, while the rest has to be in cash. Foreigners should expect to pay at least 20% (including fees) of the purchase price in cash.
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| When should I meet my banker or mortgage broker? |
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You should meet your banker or mortgage broker before signing any contracts to make sure that you can actually get the loan to finance your purchase. Any deposits paid to reserve the property will be forfeited if you cannot go through with the purchase.
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| What documents do I need after I have decided on a property? |
| If you have decided to buy a property, you should ask for an “Option to Purchase’ agreement from the seller. At this point, you will give the seller 1% of the purchase price as a good faith deposit. In exchange, ‘Option to Purchase’ usually states that for the next 14 days, the seller is not allowed to offer the property to another buyer. If you do not follow through with the purchase, the 1% deposit will be forfeited.
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| What if I do not need the grace period? |
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Your agent will prepare an “Offer to Purchase” agreement stating the price, completion date and other conditions that you may have. If the seller agrees, your agent will then prepare a Sales and Purchase Agreement, and a deposit of 5% or 10% of the purchase price is given to the seller.
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| What happens after the Sales and Purchase Agreement? |
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Your solicitor will complete the sale (e.g lodge a caveat of the property, coordinate with the bank, etc). The whole process generally takes 10 weeks to complete.
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| When should I inspect the property before taking over? |
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You should do so before signing the Sales and Purchase Agreement. The ‘Option to Purchase’ should clearly state you are allowed to inspect the place before the sales is completed. Check the fixtures and fittings which the seller has agreed to sell with the property. If there are problems, get the seller to fix them before you sign the Sales and Purchase Agreement.
If you are buying a HDB flat, HDB will inspect on your behalf.
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| What are the fees and commission incurred? |
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Agent’s Commission:
For private property, this is paid by the seller and is typically 1-2% of the sale. For HDB, it is borne by the buyer and is about 1% of the sale.
Solicitor’s Fee:
Typically 0.3-0.6% of the transaction value, borne by the buyer.
Mortgage Fee:
This is administrative fee or valuation fees charged by the bank, about $200-$300. You will also need to insure your property before the bank agrees to the mortgage.
Stamp Fee:
Paid to the Inland Revenue Authority of Singapore within 14 days upon exercising the ‘Option to Purchase’ (or signing the Sales and Purchase Agreement if you buy from a property developer). The fee is 3% of the purchase price, minus $5,400 for sales above $300,000. In addition, the mortgage stamp fee is $500.
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