Step 1: Pay the property seller the Option Money which is equivalent to 1% ($6,000) of the agreed sale price in cash.
Step 2: Within the stipulated Option Period (usually within 14 days of the Option), exercise the right by signing the 'acceptance copy' of the Option form, and paying another 4% ($24,000) of the sale price in cash. Within these 2 weeks, you must obtain a letter of offer from the bank in order to exercise the OTP.
Step 3: Upon exercise of OTP, you need to pay Buyer's Stamp Duty (estimated 3% of the purchase price) within 2 weeks from the exercise date. This can be via your CPF.
Step 4: The balance 20% ($120,000) of the downpayment can be paid in CPF or cash and is payable at least 2 weeks from completion date.
Step 5: The balance 75% ($450,000) is via a bank loan.
There are also other costs such as the following:
1. Banking costs - interest cost and pre-payment charges
2. Related taxes - stamp duties for a contract, mortgage, pro-rated property tax
3. Legal costs - conveyancing fees
4. Other closing costs - valuation fee, caveat fee, agent's fee
1. Stamp duty.
Refer to IRAS's calculator here: https://mytax.iras.gov.sg/ESVWeb/default.aspx?target=MSDCalculatorIntro
2. Pro-rated property tax
When the property is sold, the buyer will share the portion of the property tax that is not 'used' by the seller. Do note that all property taxes are paid in advance in January. For example, if the full year property tax is $600 and the property transaction is completed on the last day of June 2020, you will share with the seller the property tax amount proportionate to the percentage of the year that each has ownership of the property. In this case, you will have to pay $300, being 50% of the property tax already paid by the seller in the beginning of the year.
The standard rate for conveyancing fee charge on a private property transaction is 0.4% of the transacted price or up to $2,500, whichever is lower. Some lending banks absorb legal fees on the condition that the loan is not fully redeemed before maturity.
Other closing costs:
You may also pay for other related charges such as:
1. Valuation fees
In general, a purchaser must fork out the valuation fee for the property appraisal done on request of the mortgagee bank, and/or CPF Board (if CPF savings is used to purchase the property). In general, for private residential and non-residential properties, the valuation fee is between $400 and $500 but it could be higher in some cases when the licensed appraisers are required to perform more tasks related to the appraisal, for example, floor space measurements. Some lending banks absorb the valuation fees on the conditions that there is to be no full resumption before the loan matures.
2. Insurance premium
There are various type of property-related insurances inducing fire insurance and 'mortgage reducing' insurance. Most lending banks require the security to be protected with at least a fire insurance. However, not all lending banks require the security or loan amount to be insured. When the loan amount is insured, it is often called 'mortgage reducing insurance'. The premium is often pegged at 1% to 1.5% of the loan quantum.
3. Caveat fee
Caveat fee is often fully absorbed by the lending bank on the condition that the loan is not fully redeemed before maturity. In the event that the property is sold and the loan is fully redeemed the mortgagor will have to fork out the caveat fee.
4. Agent's commission
Purchasers of private properties are not required to pay the agent's commission. However, in the event that a property is bought and sold in quick succession, the purchaser is required to pay the agent's commission if a real estate salesperson is engaged to market the property. While there is no industry mandated law, agents typically charge a commission equivalent to 2% of the contracted sale price.
Hope this answers your question.