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| Buying Guide |
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| financing the property |
| necessary documents |
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| Once you have found a property you want to buy, this document explains the steps to actually complete the purchase. Note that at this point you may want to appoint a solicitor to act for you – but please consult your agent about this first. You will need a solicitor in these phases of the purchase process: to act in purchase, to act in mortgage (if you are taking a loan from the bank), and to act in withdrawal of funds from the CPF Board (if you are using CPF Funds). Typically, one solicitor can do all of this, so there is no need to appoint multiple solicitors.
Before you sign any contracts, make sure you can actually get the money to purchase the property. Any deposits paid for reserving the property will be forfeited if you cannot go through with the transaction – unless the cancellation is due to conditions stated in the contract. | | |
| financing the property |
| | | Most people will finance their property using a bank loan (mortgage). The amount you can borrow will depend on your own personal financial circumstances plus the bank’s valuation of the property or the actual transaction price (whichever is lower). Singaporeans can usually borrow up to 90% of the value and foreigners usually up to 80%. The bank will take into account your capacity to pay the monthly instalments – for this they will evaluate your income, assets, employment history and your age, and they will also check your credit history for any previous payment problems.
For the deposit you can use your Central Provident Fund (CPF) savings, if you have an account, and the rest has to be in cash. A Singaporean with good CPF savings might not need much cash to pay for a property, but foreigners should expect to have at least 20% in cash (+ fees) at hand to purchase a property. | | |
| necessary documents |
| | | The contractual part is typically a simple two step process. First you will sign an ‘Option to Purchase’ agreement with a good faith deposit. Following this, you have 14 days to decide whether to go ahead or not with the purchase. Alternatively, you can just give the seller the full deposit on ‘Offer to Purchase’ and bypass the ‘Option to Purchase’. After this, you will sign the ‘Sales and Purchase Agreement’ with the seller to complete the sale.
Option to Purchase
Once you have decided to purchase the property and agreed the price with the seller, you should ask for an ‘Option to Purchase’ agreement. The ‘Option to Purchase’ agreement is typically prepared by the seller’s agent or solicitor, and you should therefore go through it with your agent or solicitor before signing. However, any amendments need to be agreed by the seller. Typically 1% of the purchase price is given to the seller in exchange for the option as a good faith deposit. | | |
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