Home Buyer's Guide & The Buying/Selling Process

Source : Urban Redevelopment Authority (URA) [http://www.ura.gov.sg/lad/HBG/basicCheck.htm]

Buying a new apartment, flat or house may probably be your single largest investment. Hence, before you even visit a showflat or view any unit, it is important that you familiarise yourself with some existing Government policies which may affect you.

Fast Facts:
.If you own a HDB flat or Executive Condominium, you have to fulfill the minimum occupation period before you can purchase private residential properties

.If you are a Non-Singapore citizen, you have to obtain approval from the Controller of Residential Property before you may buy landed houses.

.You should consider your finances before committing to any property purchase, taking into consideration the limit on the use of CPF monies for property purchase and the loan amount you can obtain.

.You can access free property market information, such as prices of private residential properties transacted over the last 12 months, from URA website.

.Besides the price of the property, other fees such as stamp duty and property tax are payable.

.You may wish to consult a lawyer on your rights and obligations before signing any document.


Check Your Eligibility to Buy
Before you consider buying your dream home, check whether you are eligible to buy especially if you own a HDB flat and/or are a non-Singapore citizen (including Singapore Permanent Resident).

If you own a HDB flat, you may wish to check whether you have fulfilled the minimum occupation period required for your HDB flat before you can purchase private residential properties. For more information, visit the Housing Development Board of Singapore (HDB) website. [http://www.hdb.gov.sg]

If you are a non-Singapore citizen (including Singapore Permanent Residents), you have to obtain approval from the Controller of Residential Property, Singapore Land Authority, before you may buy landed houses. For more information, visit the Singapore Land Authority (SLA) website.[http://www.sla.gov.sg]


Considering Your Finances
You should consider your finances and decide on a budget that you would be able to commit towards your property purchase. You could use the "Housing Affordability Calculator" from CPF's website to estimate your housing loan based on your income and ability to service the loan.

If you decide to utilise your CPF monies, you should take note that there are limits on their use for property purchases. Information on the use of CPF monies and how proceeds of sale from your previous residential property will be handled is available from the Central Provident Fund Board (CPF) website. [http://www.cpf.gov.sg]

If you need to borrow from banks, you should familiarise yourself with the terms of the loan and mortgage as well as the variation in interest rates for the period of your loan. You may wish to discuss with a banker to determine the maximum loan amount that you may obtain, the interest rate and period of repayment for the loan. The list of local and foreign full banks operating in Singapore can be found in Monetary Authority of Singapore (MAS) website. [http://www.mas.gov.sg]

Your application for the use of CPF monies and/or loans from banks will take some time to be processed. Your lawyer will also need time to carry out certain checks regarding the property to be purchased. To ensure that you have enough funds to meet the payments required as well as a place to stay, you should plan carefully when you should sell your existing home and when to purchase a new home. For information on the process of sale of HDB flats, visit the Housing Development Board of Singapore (HDB) website. [http://www.hdb.gov.sg]


Property Market Information
URA provides free information on the property market, including:

• List of the launch and sale status of uncompleted private residential projects. The list is updated every month.

• Prices of private residential properties that were transacted with caveats lodged over the last 12 months.


Know the Fees Payable
You may want to find out more about the other fees payable when purchasing a residential property. Besides the following fees, you should also find out from the sales agent or your lawyer on any other fees which you may have to pay.

For information on stamp duty and property tax payable, visit the Inland Revenue Authority of Singapore (IRAS) website.[http://www.iras.gov.sg]

A valuation report on the value of the property to be purchased is required by banks and the CPF Board. For a list of valuers and the fees payable, visit the Singapore Institue of Surveyors and Valuers(SISV) website. [http://www.sisv.org.sg]


Consult a Lawyer
You may wish to consult a lawyer to understand better the process of buying a property and your rights and obligations before signing any document. In engaging a lawyer you should also clarify the scope of services to be provided as well as the fees payable. For information on lawyers and the legal profession in Singapore, visit the website of The Law Society of Singapore [http://www.lawsociety.org.sg]


The Buying/Selling Process:

1) Select an agent
Optional, but recommended. A professional agent will not only help you to find the right property, but also ensure you get the right price, ensure all small details are covered prior to purchase, guide you through the process and make recommendations on financing and legal representation.

2) Find your property and agree a price
When reaching a preliminary agreement to buy, ensure that all important points have been discussed and agreed, including any repairs or changes prior to purchase, what stays and what goes, any special requirements from both side and the anticipated schedule.

3) Sign an Option to Purchase
For Private Property - This is obtained from the seller through their lawyer or agent. At this point you are required to pay a non-refundable option fee (normally 1% of purchase price). The option period is usually 14 days.

For HDB Property - Since 15 April 2003, the HDB standard Option to Purchase has replaced the Sale & Purchase Agreement as the form of contract to be used in resale flat transactions. Buyers and sellers should not enter into any other forms of agreement or supplemental agreements.

4) Appoint a Lawyer
You now need to appoint a lawyer to make legal enquiries on the status of the seller, the title of the property and the terms of the sale.

5) Arranging Financing
Compare interest rates and special terms when choosing your finance scheme. You can apply for withdrawal of CPF savings by completing an application together with a valuation report prepared by a licensed valuer who is on the CPF panel of valuers.

6) Exercise the Option / HDB 1st Appointment
For Private Property - If all is well you now sign the sale contract, and pay 5% of the purchase price (less the option fee). You also need to pay stamp duty within 14 days of the contract.

For HDB Property - The buyer and seller must both attend the Sales Declaration & Registration appointment to seal the closing price. After this appointment, HDB will check eligibility of the transaction and arrange for a 1st Appointment – usually about 4 weeks after the Sales Declaration.

7) Legal Inspection & Completion
Your lawyer will carry out an investigation of title deeds and send requisitions to various government departments. The seller’s lawyer will also prepare the completion statement and send documents for stamping to effect completion.

8) Settle Payment and Handover / HDB 2nd Appointment
For Private Property - You now settle the outstanding balance of the purchase price. This might be 8 to 12 weeks after exercising the option. The seller’s lawyer will then handover the keys and title deed of conveyance, and you become the owner of your new home.

For HDB Property - Completion takes place at the 2nd Appointment, usually about a month after the 1st Appointment. The insurance and mortgage is arranged and stamp duty, legal fees and agent fees are paid. The sale is completed and arrangements are made for moving into your new home.