Procedure in Buying a Property

DECIDING ON LOCATION

Depending whether you are buying the property for own stay or investment, location plays an important role. Properties in prime districts retain their value very well and they usually have the highest capital gain in the property market. Properties in the suburbs are lower in price and may be more suitable for own stay rather than investment. If you are purchasing a property solely for investment purposes, prime districts properties like district 09, 10, 11 or the Central Business District are the safest buy. Properties closer to the sea with spectacular scenic sea view at the East Coast are also great for a resort home or investment.

LOAN ELIGIBILITY

You need to check whether your credit status and income proof can enable you to loan 80% of the of the valuation or sale price. For a foreigner, major banks or financial institutions in Singapore can only loan up to 70% or 80% of the valuation or sale price, depending on their financial status. Please see latest transacted prices, so you will have a brief idea on choosing the right property with the right budget.

OPTION TO PURCHASE

Once you have decided to buy a property. Prepare a 1% cheque of the purchase price in exchange for the Option to Purchase from the seller. Option to Purchase will be prepared by the seller's (vendor) solicitor or property agent. You are given 14 working days (excluding sat, sun & public holiday) days to decide whether to proceed with the purchase. If you decide to proceed, exercise the option by signing in your solicitor's office and forward it to the seller's solicitor together with another 4% or 9% (agreement between the vendor and purchaser) of the purchase price.

OFFER TO PURCHASE

Alternatively, your realtor will prepare the Offer to Purchase and attention to the seller. The letter will state the purchase price, sales completion date and others. Other terms and conditions can be drafted out by your solicitor or realtor.

COMPLETION OF SALE

Completion of the sale will take around 8 to 10 weeks time (agreement between the vendor and purchaser). Your solicitor will lodge a caveat on the property, coordinate with the financial institution, CPF board (if applicable) & prepare the mortgagor/mortgagee documents.Stamp fee will be payable to Inland Revenue Authority of Singapore (IRAS) within 14 days upon exercising the Option to Purchase or signing the Sales and Purchase Agreement when you buy from a property developer. For properties above S$360,000, stamp fee payable will be 3% of the purchase price minus S$5,400.

INSPECTION OF PROPERTY BEFORE TAKING OVER

The buyer can state in the Option to Purchase for permission to inspect the property before the completion of the sale. Check the fixtures and fittings, and also the items in the inventory list that the seller had agreed to give with the property.

Procedure in Renting a Property

RENTAL PROCEDURE

Deciding on the right location is very important and it will determine the convenience for you family and yourself. Price - budgeting yourself will also evaluate which are the areas and apartments or houses that are suitable for you.

STEP 1

Once you have commit yourself on deciding a rental property, your realtor will draft out a letter of intent (LOI) attention to the owner together with a 1 month security deposit given to the landlord. The letter will state of your requirement eg. You need a fridge, extra bed or anything that you think you will need.

STEP 2

The landlord will have 7 days to consider before signing the letter of intent.  After the landlord signed the Letter of Intent and accept this deposit, he cannot rent the property to other party. This deposit will become part of the security deposit or advance rental after the Tenancy Agreement is signed. The standard practice in Singapore is usually one month's rent for every year of lease. It will only be payable upon signing of the Tenancy Agreement. When the lease term ends, the deposit will be refunded without interest. However, the landlord reserves the right to deduct from the deposit all costs and expenses arising from the tenant for breaching any of the covenants stated in the Tenancy Agreement.

STEP 3

After the letter of intent is duly sign. The landlord will prepare the Tenancy Agreement. You will need to prepare the rest of the security deposit and advance rental upon signing of the Tenancy Agreement. For 1 year lease - 1 month's deposit and 1 month's advance rental. For 2 years lease - 2 month's deposit and 1 month's advance rental. This amount will include the security deposit that had been given earlier on.

STEP 4

On your commencement day, your realtor and the landlord will be present to handover the keys and go through the inventory list. You have to properly check that every item stated in the inventory is in good working condition. Once you have check everything is in good condition, only then you will sign on the inventory list.

STAMP DUTY

In Singapore, Tenancy Agreement need to be stamped by the Inland Revenue Authority of Singapore. Only after the Tenancy is stamped then it can be considered a valid contract as evidence in court for any disputes that may arise in the future with your landlord. This is to protect the interest of both parties. The stamp duty is normally borne by the tenant. Computation as followsMonthly rental divide by 250 x by 12 month (1 year lease) = Round off to nearest dollarMonthly rental divide by 250 x by 24 month (2 year lease) = Round off to nearest dollar

OTHER EXPENSES BORNE BY TENANT

Electrical & water supply, gas, telephone line, Cable TV, internet broadband and etc.

FAQs

FAQs ON RENTAL 

o    How & where do I start if I'm looking for an accomodation in Singapore?

We would recommend you to go for Service apartment or hotels in Singapore if you're staying here for less than a year. If your employment contract is more than a year, therefore you can take a look at our property search engine or contact us.

o    What do I have to do next after I've found a suitable apartment or house?

Make known of your interest to your realtor. He or she will prepare the Letter of Intent (LOI), list down your requirement & your rental price offer & will pass it over to the owner together with a one month rent as goodfaith deposit. For more specific rental procedure, please see Rental procedure

o    What is the deposit like if I'm going for a 1 year or 2 years lease? 

Base on a monthly rental of $3000;

1 Year lease agreement: 1 month rental, $3000 + 1 month deposit, $3000 = $6000

2 Year lease agreement: 1 month rental, $3000 + 2 month deposit, $6000 = $9000

3 Year lease agreement: 1 month rental, $3000 + 3 month deposit, $9000 = $12,000

o    What other fees & expense do I need to pay after signing the tenancy agreement?

-Stamp Duty, computation are as follow;

For 1 year lease or less 

(Monthly rental x 12 month) Round off to nearest dollar                      

                250

For 2 years lease or more than 1 year;

(Monthly rental x  24 month) Round off to nearest dollar                      

                250

Power supply deposit ($150 for HDB flat, $300 for private apartment & $500 for landed property. These deposit will only be applicable when you receive your first bill) TV license ($110 yearly) Internet, Singapore cable vision (SCV) phone lines & ect.. are all optional subscription  

o    Why is stamp duty necessary?

It's compulsory for all tenancy agreement to be duly stamp by Inland Revenue Authority of Singapore (IRAS) so as to safeguard both parties from any disputes in future & it is a valid contract as evidence in court

o    How do I go about searching for my dream home?

You can use our property search engine for the latest property up in the market & our project directory to know the details of each individual project 

o    How can I find out from my financial status for the amount of mortgage loan that I can get?

We can help you to get an in-principal loan approval from your choice of bank. The letter will state the amount of loan that you will be granted. What you need is a photocopy of your NRIC, prove of employment, latest payslip or your latest 2 years income tax assessment. From there, we will be able to work out your financial budget in buying your dream house.

o    What are the current bank interest rates?

Bank interest rates differ if you take a 80% loan, 75% loan & so on. You may contact us if you would like to inquire. We shall get a banker to call you & list out all details

o    What is the step by step procedure?

Please see our step by step buying procedure for more specific detail.

o    What is the agency fee like?

No agency fee imposed for private properties buyers.