2022 Guide to Buying a Condo in Singapore: How to Buy?

Benjamin Su

Benjamin Su

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Ever wondered what the steps are to buying a condominium on the resale market? Here’s a handy guide on all the steps in your buying journey, from starting your financial planning to vcollecting your keys upon completion. Understanding the expectations at each step may expedite your condo-buying process and save you from incurring additional charges or penalties!

Buying a Condo in Singapore: Buyer’s Timeline

TimelineSteps
Step 1: Map out your finances and set your budget

Check the maximum home loan amount and property purchase price you can afford based on your income, age, and loan commitments.

Costs to note:
Buyer’s Stamp Duty (BSD) – BSD is tax paid on the higher of the purchase price or valuation of the property bought.

Total Debt Servicing Ratio (TDSR) – The TDSR prevents borrowers from over-extending with their loans. The current TDSR is 55%, meaning you cannot use more than 55% of your gross monthly income to service your loans. This includes car loans, home loans, credit cards, and any personal loans reflected in an individual’s credit report. We recommend that applicants obtain a copy of their credit bureau report and refer to the statements reflected in the report to estimate their total debt obligation.

Loan-to-Value (LTV) Ratio – For your first housing loan, you can get up to 75% LTV ratio with a bank loan. However, if you purchase a unit above its valuation, you would need to cover the difference yourself since banks do not extend loans on the excess.

Additional Buyer’s Stamp Duty (ABSD) – Liable property buyers in Singapore must pay ABSD on top of the existing BSD. ABSD and BSD are computed on the purchase price as stated in the dutiable document or the property’s market value whichever is higher. The ABSD is currently 17% for Singaporeans, 25% for permanent residents and 30% for foreigners.
 
Validity period varies from 7 to 30 days at the bank’s discretion.Step 2: Obtain In-principle Approval (IPA)

You should also consider getting an IPA from a financial institution (FI) to determine the maximum loan quantum that they’re willing to extend to you. This will be based on your financial capabilities and credit history and may take 7-30 days depending on the FI you’re seeking, the accuracy of the information you’ve provided and whether you’ve submitted all the necessary documents.

We suggest going for a higher IPA amount at this stage because you can always request to lower the loan after approval but not always vice versa once you place the deposit.

Doing this will ensure that you do not lose the Option fee, usually 1% of the property purchase price, which you’ll have to pay once the seller has granted the Option to Purchase (OTP).

Ohmyhome offers an in-house mortgage advisory service to assist you on your home loan. Our mortgage specialist will compare home loan packages across all the banks in Singapore to advise you on the best rates at no cost!
Step 3: Browse condo listings on free property platforms

Do research on property platforms by shortlisting the units that match your criteria. Start by narrowing down your search according to your housing needs. Ohmyhome’s free listing platform offers detailed filters for buyers to find exactly what they are looking for, such as location, budget and even size. Simply download the Ohmyhome app on the Play Store or App Store.

If browsing through thousands of listings is an issue due to time constraints, you can submit your preferences to Ohmyhome’s MATCH algorithm to get yourself a curated list of suitable units. This service is free!
Step 4: Chat with the homeowner and arrange for home viewings

Schedule an appointment to get a closer look at your potential new home. It is best to schedule the viewing a few days in advance to provide ample time for the seller to prepare the property for viewing.

The Ohmyhome in-app chat allows you to directly contact the seller and enquire about the property and/or arrange a home viewing.
Step 5: Make an offer

Be sure to do your research by checking out the recent transactions and current market prices at Ohmyhome before making an offer through the in-app chat.

Once you’ve found the right home at the right price, you can make an offer!

If the seller accepts your offer, he/she will grant you the OTP.
Step 6: Engage a lawyer

You’ll need to engage a lawyer to help you exercise the OTP on time, as well as with the rest of the conveyancing process. This involves the legal transfer of home ownership from the seller to you, the buyer.

If you will be using your CPF funds and/or getting a home loan to finance your home purchase, consider appointing a law firm from CPF’s panel and your FI’s panel. This will ensure that you won’t have to engage two lawyers for those two things, saving you hundreds of dollars in legal fees.

Pro-tip: Settle all your legal conveyancing needs with Ohmyhome’s legal partners. A great consideration if you’re looking for a seamless end-to-end engagement, where everything can be settled at a single touchpoint!
At this step, you have 2-weeks (Or as agreed with the seller):Step 7: Get the Option-to-Purchase (OTP) and pay the Option Fee to the seller

The OTP is a legal agreement between you, the buyer, and the seller to buy the private property. Once the OTP has been granted by the seller, you will need to pay the Option Fee, which is usually 1% of the purchase price. After doing so, you’d have successfully expressed your interest in this private property, and the seller is not allowed to issue OTPs to other buyers.
Exercise the OTPStep 8: Exercise the OTP

You will have 14 days to exercise the OTP and prepare the remaining 4% downpayment in a cashier’s order. This process has to be done by your conveyance lawyer and sent to the seller’s lawyer. The OTP would lapse if not exercised at the end of the option period, and the 1% option fee would be forfeited.

We suggest handing the 4%cashier’s order to the lawyer for exercising the OTP at least a day in advance to avoid delays.
2 weeks from the date of exercising the OTPStep 9: Pay Buyer’s Stamp Duty (BSD), Additional Buyer’s Stamp Duty (ABSD), and legal fees

The BSD and ABSD (if applicable) will be based on the property’s purchase price or market value, whichever is higher. Your legal representative will advise you on when to make the payment. Usually, it is within 14 days from exercising the OTP or you may face a penalty.
8-12 weeks from exercising the OTP (Or as agreed with the seller)Step 10: Get the keys!

Once you’ve completed the final payment and your home loan has been disbursed, it’s time for the moment you’ve been waiting for – collecting the keys to your new home!

Looking for an HDB or private property?

Here’s how you can speed up your home search

Let Ohmyhome’s smart data-matching technology MATCH you with the right home, according to your specific needs. Submit your preferences to us and our algorithm will filter all our available listings based on those, and we’ll WhatsApp them to you once we find a match. We’ll also send you relevant content that you can use for your research and inform your home buying decision, so you no longer have to spend hours searching online for the information that you need.

You can also call us at 6886 9009 to secure an appointment with any of our Super Agents or message us in the chatbox at the bottom, right-hand corner of the screen. You can also WhatsApp us at 9727 5270!

Frequently Asked Questions

1. When is a good time to buy a Condominium?

There is always an opportunity in every market condition, such as the low-interest rates in the current market.

2. What are the costs involved when buying a new condo in Singapore?

On top of the purchase price, be prepared to set aside money for the Buyer Stamp Duty (BSD), Additional Buyer Stamp Duty (ABSD) and other legal and mortgage fees.

3. Are foreigners allowed to acquire a condo in Singapore?

Yes, foreigners can purchase a condominium unit without approval under the Residential Property Act. It is also worth taking note that this approval does not exclude them from the ABSD.

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