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Steps by Steps guide to Property Buying Print E-mail
1) Ownership
Check that the seller is the owner of the property.

(a) Eligibility to sell
Ensure that the seller is eligible to sell the property. For a private property mortgage to a bank, if the seller is selling the property below his buying price, and is unable to pay the shortfall on his bank loan, the bank may not allow the transaction to go through.

(b) Bankruptcy
If the seller of the property is a bankrupt, the seller need the written consent of the Official Assignee to sell the property. The Official Assignee may request for all money, including option money to deposit to be paid to them.

(c) Eligibility to buy
Purchaser should make sure of his eligibility to buy a property according to the Residential Property Act and HDB’s eligibility rules. There also restrictions on foreigners to buy properties in Singapore.

2) Considering Factores
Location: Distance to work places, schools, parents and leisure places.
Size: How large a home is needed for present and future needs.
Facilities: Swimming pool, tennis courts, gym and other condominium type facilities.
Amenities: Distance to market places, shops, banks etc.

3) Points to Note
The following points listed need to be checked to ensure property purchase proceed smoothly.

(i) Illegal renovations / Alterations
Ask the seller whether renovations or alterations is being done legally. Get the understanding from the seller should the relevant authorities require seller to change any of the illegal renovations or alterations, the seller should bear the costs.

(ii) Ethnic Integration

For HDB purchase, purchaser need to satisfy the ethnic integration policy. If the number of families of the purchaser’s ethnic group exceeds the prescribed quota, the purchaser will not be allowed to buy a unit in that area unless the seller is also of the same ethnic group.

4) Completing the Sale
After a price has been agreed between seller and purchaser, both party can then proceed on to complete the sale by making payments and transferring the Certificate of Title (CT) from the seller to the purchaser. The CT is issued by the Singapore Land Authority.

(i) Option of Purchase

Before the purchaser can proceed on to apply for the Certificate of Title,  the purchaser will need to enter into a valid and binding real estate contract (drafted by lawyer), in the form of Option to Purchase (OTP).

At this stage, the purchaser will need to put up an option fee which is 1% of the agreed sale price. Upon this payment, the purchaser has the right to buy the property at the agreed price. The purchaser however can opt not to proceed with the deal at the Option stage losing only the option fee.

(ii) Entering Sale and Purchase Agreement.

The purchaser will need to put up another 9% of the agreed sale price known as Option Exercise Fee to accept the OTP which will then form a valid sale contract, known as Sale and Purchase Agreement. The two payments (Option fee and Option exercise fee) then form the down payment, which is 10% of the agreed sale price. The balance of the payment must be settled on or before legal completion date.

This is done after the purchaser’s lawyer has performed all due diligence checks including Certificate of Title and bankruptcy searches.

(iii) Inspection the Certificate of Title.

The Certificate of Title (CT) is the only legal document that proves property ownership. Hence, after the purchaser has accepted the Option to Purchase (OTP), the CT will be handed over to the purchaser’s lawyer for inspection.

Usually, the purchaser’s lawyer will hold on the CT until legal completion where the old CT is surrender to the Singapore Land Authority (SLA) for the purpose of reissuing a new CT to the new owner.

(iv) Legal completion
Upon approval by CPF board for the release of purchaser’s CPF funds for the purchase, the purchaser’s lawyer will proceed on to prepare (a) completion statements and (b) draft conveyance (transfer document).

(a) Completion statements
It is being issued to the mortgagee bank for purchaser to finalise the amount of down payment required and to the purchaser to determine the balance of the purchase price which the purchaser must pay after deducting the deposit.

Usually, the completion statement is being sent to the purchaser a few days before the legal completion date.

(b) Transfer Document
On the legal completion date, the purchaser settles the outstanding balance of the purchase price.  The seller’s lawyer will then hands over the house key and the Transfer Document to the purchaser’s lawyer.

The Transfer Document will record the evidence of the transfer of ownership of the property from the transferor (the seller) to the transferee (the purchaser)  
(c) Issuing of Certificate of Title (CT)
The purchaser’s lawyer will apply for the Certificate of Title (CT) from the Singapore Land Authority on the same day and will safeguard it until the CT is handed over the mortgagee bank.