What is the payment scheme for buying a resale condo

Payment Scheme for Buying Resale Condos in Singapore

When purchasing a resale condo in Singapore, the payment process follows a structured timeline with specific deposit requirements at each stage.

Option Period and Initial Deposit

Once you've identified a property you wish to purchase, the seller will issue an Option to Purchase (OTP). At this point, you need to pay a 1% option fee of the purchase price to lock in the deal. This fee secures your right to purchase the property during the option period, which is typically 14 days. During this time, you can conduct inspections, arrange financing, and decide whether to proceed.

Exercise of Option

After the 14-day option period, if you decide to proceed with the purchase, you must exercise the OTP by paying an additional 4% exercise fee of the purchase price. Once this is paid, the transaction becomes binding and you cannot back out without penalty.

Total Deposit After Exercise

After exercising the OTP, your total deposit will be 5% of the purchase price, comprising the 1% option fee plus the 4% exercise fee combined. From this point onward, the transaction is legally binding.

Legal Completion

Following the exercise of the OTP, your lawyer will manage the Sale and Purchase Agreement and coordinate with the seller's lawyer on all documentation matters, including loan redemptions, CPF refunds, and outstanding fees. Legal completion typically takes 8 to 12 weeks, during which final payments are made, ownership is transferred, and physical handover occurs.

It's worth noting that both buyers and sellers can negotiate the option period length or option fee amount, as long as both parties agree to any amendments in the OTP terms.