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What is the procedure for buying private resale
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When buying a private resale property in Singapore, here is the general procedure you can follow:
Engaging a Property Agent
While optional, it is often recommended to engage a property agent to help in the search and negotiation process.
Financial Planning
Plan your finances carefully, including checking your eligibility for a bank loan and understanding the various costs involved, such as the Buyer's Stamp Duty (BSD), which is computed based on the purchase price or market value of the property, whichever is higher.
Property Search and Selection
Search for properties that meet your criteria and select the one you wish to purchase.
Offer and Option to Purchase (OTP)
When you find a suitable property, make an offer to the seller. If the seller accepts your offer, an Option to Purchase (OTP) will be signed, accompanied by a deposit, usually 1% of the purchase price unless otherwise negotiated. You will typically have 2 weeks to exercise this OTP before it expires.
Due Diligence
During this period, your agent or you will perform due diligence, such as obtaining a Proof of Ownership, before proceeding with the payment of the deposit.
Securing a Bank Loan
Use this time to review bank loan packages and secure a Letter of Offer (LO) from the bank.
Engaging a Conveyancing Firm
Engage a conveyancing firm to handle all the legal matters related to the purchase.
Exercising the OTP
Within the 2-week period, once you have secured your bank loan and engaged a conveyancing firm, you will exercise the OTP by signing the Sale and Purchase Agreement and paying the remaining deposit, typically 4% of the purchase price. The conveyancing firm will also collect payments for the Buyer's Stamp Duty and legal fees.
Completion and Legal Matters
After exercising the OTP, you will wait until the completion date, when you become the legal owner of the property. Before this date, you will need to pay the remaining down payment, which is 20% of the purchase price.
This process ensures that all legal and financial aspects are handled properly, making the transaction smooth and secure.
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