Getting the Buying Paperwork Right for Resale Properties

Buying Property Guide

The good thing about hiring a solicitor and a property agent is that they will assist you in dealing with and preparing all relevant paperwork. This however, does not exempt you from getting involved with your own transaction.

It is recommended that you educate yourself on what goes into preparing the documents before you hire a solicitor. A solicitor will typically assist you by acting in purchase, in mortgage and/or in the withdrawal of funds from the CPF board.

There are several documents you will need to prepare beforehand; financial records, tax records and the legal description of your property including proof of house inspection.

These are integral to the entire procedure and only by preparing the documents yourself or with the help of an agent will you be better equipped to understand the process of your transaction.

Once you have all your documents in order, the solicitor will assist you in the contractual part of the transaction which is a simple two-step process.

The first part is to offer the ‘Option to Purchase' (OTP) agreement. There will be a good faith deposit of typically 1% of the purchase price for private resale property to be paid to the seller at the point of receiving the agreement. If you exercise the OTP, a payment of 5% - 10% of the purchase price, minus the deposit is expected. For more information, click here.

For HDB resale flats, the deposit is normally $1,000. If you exercise the OTP, you will have to pay up to $5,000 minus the deposit. For further information, you can visit HDB's site.

The buyer may request to view proof of housing inspection at this point so it is prudent to have such pertinent information with you during the process at all times.

The seller may also request to view the buyer's loan approval letters from the bank if they are planning to finance the purchase of the property with a loan.

The OTP form entitles the buyer to contemplate his decision on buying the property and submitting the signed document to the seller within 14 days, failing which the transaction and deposit will be lost immediately.

The seller will keep the deposit and is now free to offer his property to someone else.

The OTP should also clearly state permission to inspect the property before completion of the sale. The buyer should check everything the seller has agreed to sell with the property. The seller is obligated to fix any problems before the buyer signs the Sales and Purchase Agreement.

If you are selling a HDB flat, HDB authorities will inspect on your behalf and will check for any unauthorized renovation. If such things are found, the seller is expected to return the flat into a condition permitted by HDB before the sale can be approved.

Some sellers may wish to bypass the ‘Option to Purchase' mode by presenting buyers with a binding offer directly, known as the ‘Offer to Purchase'. This document will be prepared by the solicitor or agent and it would state the completion date, price and any other conditions you may have.

Upon accepting and signing the ‘Offer to Purchase', a deposit of 5% or 10% of the purchase price is made to the seller.

The Sales and Purchase Agreement is the second phase and in this regard, the solicitor will embark upon the necessary steps to complete the sale such as coordinate with the bank/CPF board for the mortgage and preparation of the contracts. The entire process will typically take up to 10 weeks to complete.

As the solicitor generally takes over in the contractual stage to complete the sale, here are some things to know;

• A precise legal description of the property being sold must be included in the real estate agreement. This description should be as detailed as possible and should make mention of the legal identification of the property.

• The purchase price should be explicitly stated in the agreement, by appearing in both text and numbers so as to avoid potential confusion.

• Information about the mortgage used by the buyer should also be present in the agreement, along with any contingencies. Contingencies should be declared, especially with regard to loan approval.

• The agreement should include a specific closing date, by which both parties technically must seal the deal. An extension to this deadline cannot be made unless both parties agree.

• The full and correct names of both parties must be stated clearly. This includes hyphens, any designations and aliases which either party might be using. While seemingly trivial, this is actually rather important.

If you are considering on purchasing a resale HDB flat for yourself, HDB has prepared a list of eligibility criteria you have to meet. You can read our guide here.

If you are 35 years and older and a single Singaporean interested in purchasing a resale flat, read our guide on ‘Resale flat acquirement for Singles'.

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