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Buying and Selling: What Are The Documents You Need in a Property Transaction?

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It’s no secret that the legal documents you need are important to seal the deal on the purchase of residential property whether you’re a buyer or a seller. It is equally important for both parties to have a basic understanding of the documents that they will eventually sign. So, strap in for an easy to follow guide on the legal documents you need to know during the buying and selling process.

1. Letter Of Offer/ Intent To Purchase

The Letter of Intent to Purchase is also referred to as the Letter Of Offer. This document basically states that the buyer has intentions to purchase the property, and is written up by the appointed realtor.

There are several important details to take note of within the document, such as the selling price of the property with the included fixtures and furnishings, and the set date by which the Sales And Purchase Agreement (SPA) should be signed by, usually within the next couple of weeks. The document will also set forth the initial conditions of the offer and purchase that are put in place to protect both the buyer and the seller. Examples of the conditions of offer and purchase include the return of an earnest deposit if for some reason the sale does not go through.

During this stage of the buying and selling property process, an earnest deposit will be made by the buyer in a show of good faith and to secure the property. This deposit is only two to three percent of the selling price and counts towards the ten percent of the legal down payment required by law.

2. Sales And Purchase Agreement (SPA)

The SPA is the legal document that seals the deal between the seller and buyer of the said property. Hiring a lawyer is always suggested for both parties when it comes time to write up and sign the SPA. This is because the document details the agreed-upon terms and conditions of the sale. Lawyers will know what to look out for in the best interest of their client, as the document doubles as a safety net that protects both parties if anything goes wrong.

The SPA will set forth the agreed-upon manner of payment, how long the defect liability period is, in the case of a new property by a developer, and property plans with details of materials and measurements. The document will also state when and how the buyer will receive the keys, and what would happen if the seller fails to vacate the property and possession of the keys by the set date specified in the SPA.

Once the SPA is signed, no further negotiations on the conditions of the sale can be entertained, and so the seller and the buyer must both respect and acknowledge the terms that have been laid out. This protects the buyer by making sure that the seller cannot change anything stated in the agreement to their benefit, and visa versa. Buyers will need to note that they will be responsible for having to pay stamp duty on the SPA.

In the case of purchasing a new home from a property developer, one of the perks given to buyers is often the free drafting of a SPA, however, be sure to have your lawyer look over it. In the case of inheritance, a SPA is usually not involved as it is just a transfer of names.

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3. Memorandum Of Transfer

The Memorandum of Transfer is a legal document that signals both parties to start celebrating as the transfer of ownership has legally been completed. This document exists be it a transfer of ownership of a property from a developer to the buyer, or seller to a buyer in the case of secondary market purchase.

Similar to the SPA, there is a stamp duty charge so be sure to include it under your additional expenses that come with buying a house. However, buyers will receive a 100% exemption from having to pay the stamp duty on the Memorandum of Transfer in the case of spouse transfer. A 50% exemption will be given when a parent transfers the property to the child or vice versa.

4. The Facility Agreement

The Facility Agreement is commonly known as a loan agreement and details the terms and conditions of the housing loan taken by the buyer. The agreement is drawn up by the bank’s lawyer as it’s designed more or less to protect the bank’s interest. The buyer, also referred to as the borrower in this situation, has to pay the legal fees for the facility agreement.

Now that you have a good grasp on the importance of each legal document that plays an essential role in the buying and selling process of a residential property, you’ll be able to keep up with your lawyer and agent with ease.


With Ohmyhome’s trusted agent services, we are able to help you buy, sell, rent and lease out properties according to your needs and requirements. As part of the Ohmyhome ecosystem, not only would you have the support of an individual agent, but the company as a whole.

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