Many investors will buy real estate in Singapore as an important way of investment. How to buy a prospective house and resale property in Singapore?

Preparation for Buying a House

Step 1: Understand eligibility

In general, buyers first need to confirm the purchase qualification and confirm the types of property that can be purchased.

A. Detached houses, semi-detached houses and townhouses with land can only be purchased by Singapore Citizens, but villas and townhouses in Sentosa Island can be purchased by foreigners.

B. Foreigners or permanent residents may purchase most apartment properties, including condominiums that have been occupied for more than 10 years;

Apartment lease: There are two types of permanent lease and non-permanent lease (99 years, 103 years, 999 years, etc.).

Step 2: Understand your finances

Confirm your own financial situation, and choose the right property according to your needs. You should plan your house purchase budget in order to confirm that you have enough funds and loans to complete the purchase transaction. Other than that, you will also need to prepare for stamp duty, legal fees and other expenses. (Foreigners can borrow up to 80% of the property price, with the latest fixed rates of around 1.4-1.7% a year.)

Step 3: Survey different types of properties

Generally, the real estate in Singapore can be divided into new real estate and resale real estate in the current situation of real estate. The new real estate can be divided into forward housing and existing housing of the new real estate. The forward housing refers to the housing that is under construction, has not yet been completed and cannot be delivered for use. Commercial housing during this period; The existing house of the new real estate refers to the property that the buyer has passed the acceptance of the delivery standard at the time of purchase and can officially settle in.

Step 4: Select a property and pay a deposit

After choosing the right property, the buyer will need to pay a deposit, and then the lawyer will complete the following purchase procedures.

Purchase Process

1. Purchase a prospective home

Step 1: Buyer pays a 5% deposit.

Step 2: Developer offers the option to purchase to the buyers, which is the pre-sale agreement of the house and the agreement must use the standard format stipulated by the government.

Step 3: The pre-sale agreement expires in three weeks after the developer delivers a copy of the purchase contract and title deed to the buyer or his/her lawyer. The buyer decides whether to buy or not within this period. If the buyer does not want to buy, he must pay a quarter of the deposit as liquidated damages, and the developer will return the remaining three quarters to the buyer.

Step 4: If the buyer decides to buy the property, he/she needs to sign an agreement with the lawyer, and the lawyer can assist him/her with the purchase afterwards.

Step 5: The buyer signs the pre-sale agreement within three weeks after receiving the agreement.

Step 6: The buyer shall pay stamp duty to the Inland Revenue Authority of Singapore (IRAS) within 14 days after signing the agreement. The stamp duty is 3% of the total house price then minus $5,400.

Step 7: The buyer must pay 15% of the purchase price (20% including deposit) within 8 weeks after signing the agreement.

Step 8: The buyer can sign the loan contract and transfer agreement through the lawyer.

Step 9: The buyer pays off the remaining 80% according to the progress of the real estate, and the lawyer assists with the registration procedures, delivery and inspection at last.

2. Buy an existing home

Step 1: After the buyer pays 1% of the total house payment as the deposit, the seller will provide the option to purchase to the buyer, namely the housing pre-sale agreement.

Step 2: The buyer has a 14 days cooling-off period to decide whether to implement the pre-sale agreement. This period is negotiable. If it is decided to go ahead, the option to purchase is signed through the buyer's solicitor. (Both the buyer and the seller have their own lawyers and exercise options). Meanwhile, the buyer pays 4% to the lawyer for collection and gives it to the seller's lawyer. If the pre-sale contract is not executed at the end of the term, all the deposit belongs to the seller.

Step 3: If the buyer decides to execute the pre-sale contract, the buyer shall pay stamp duty within 14 days after signing the pre-sale contract. The stamp duty is transferred by the buyer's solicitor to the Inland Revenue Authority of Singapore (IRAS). The stamp duty is 3% of the total price then minus $ 5,400.

Step 4: The property transaction should be completed within 8 weeks from the date of signing the pre-sale contract. During this time, the buyer must find a bank, arrange a mortgage loan, and find an evaluator to appraise the property. Lawyer will give the buyer a week's notice of the remaining 95% of the house payment, and the buyer must deliver a check to the lawyer three days in advance.

Note: After the down payment, stamp duty will need to be paid at the same time to bank mortgage loan. The developer will notify the bank of the payment schedule in writing, and will also mail the buyer payment information, progress statement, TOP (i.e., pre-sale agreement), and the date of picking up the keys. By this time the loan had also begun to operate.

Description of Relevant Expenses

A. House payment;

B. Condo buyers do not have to pay agency fees;

C. Singapore Buyer's stamp duty varies according to the identity of the buyer and the number of units purchased.

D. Lawyer's fee: about $3000.

Buying a house in Singapore is an overseas investment after all, so buyers need to be more cautious. Please have a read of this article for better understanding and feel free to consult Skyline Business Consulting if you have any relevant questions!