get an agent

Buy with an Agent

Dedicated experts at your service

Documentation Services

Leave the paperwork to us

do it yourself

Browse New Launch Condos

Find new units for sale

Prefer to do-it-yourself?

Check out how our platform can help

Browse Resale Listings

Connect with sellers through our app

RESOURCES

Calculate Buyer’s Stamp Duty

Find the amount payable when buying

Affordability Calculator

Find the amount payable when buying

How to Buy an HDB

A step-by-step guide to buying HDB

How to Buy a Private Property

A step-by-step guide to buying condo/landed

get an agent

Sell with an Agent

Dedicated experts at your service

Documentation Services

Leave the paperwork to us

do it yourself

Prefer to do-it-yourself?

Check out how our platform can help

Post a Listing for Free

Connect with buyers through our app

RESOURCES

Calculate Seller’s Stamp Duty

Find the amount payable when selling

How to Sell my HDB

A step-by-step guide to selling HDB

How to Sell my Private Property

A step-by-step guide to selling condo/landed

HOME E-VALUATION

For tenants

Rent with an Agent

Dedicated experts at your service

RESOURCES

How to Rent an HDB

A step-by-step guide to renting HDB

How to Rent a Private Property

A step-by-step guide to selling condo/landed

For landlords

Lease with an Agent

Dedicated experts at your service

Lease Documentation

Leave the paperwork to us

RESOURCES

How to Lease an HDB

A step-by-step guide to renting HDB

How to Lease a Private Property

A step-by-step guide to selling condo/landed

Do it yourself

Prefer to do-it-yourself?

Check out how our platform can help

ARTICLE CATEGORIES

HDB

All things about public housing

Private Property

All things about private property

Home Improvement

Guides for must-know reno tips

Financing

All about mortgage solutions

Towns

Singapore townships in focus

Client Stories

Success stories from customers

Founders’ Message

From the desks of Rhonda & Race Wong

DIY 100% Free, No hidden or success fee

Buying your dream home in Singapore?
Share on facebook
Share on twitter
Share on email
Share on whatsapp

Option to Purchase (OTP): What is it?

Ohmyhome

Ohmyhome

Share on facebook
Share on email
Share on whatsapp

Selling your property? Do OTP and option fee sound familiar? Simply put, as a seller, you are giving the prospective buyer an option to buy the property. In return, the buyer pays an option fee.

What is Option to Purchase (OTP)?

An OTP is a form of contract in resale transactions. You cannot enter into any agreement pertaining to the sale or purchase of a flat aside from OTP. Else, it will be and void.

But what if you have decided to sell on your own and you’re not experienced in making a contract? Don’t worry, there is an HDB-prescribed OTP form, Pursuant to the Housing and Development Act which you can use.

When to grant an OTP?

After you have started marketing for your resale flat, potential buyers will view your unit. The average days on market it takes to sell a flat is 134 days. Which means that if you start sourcing for buyers of your flat on 1 July 2019, you can find your buyer around 11 November 2019.

You have to take note that you must Register Intent to Sell in the HDB Resale Portal first, at least 7 days before you grant an OTP to the prospective buyer.

You also need to ensure that the prospective buyer has registered Intent to Buy. Ask for proof of the buyer’s registration.

So, when to grant the OTP? You grant an OTP once these four conditions are met:

  • You have found a prospective buyer
  • The prospective buyer has registered intent to buy
  • You have registered your intent to sell at least one week ago
  • You have met your Minimum Occupation Period (MOP), otherwise, the OTP will be and void.

How to grant an OTP?

Download the OTP form and use it when granting an OTP to a prospective buyer. No amendments shall be made to the prescribed form.

The prescribed option fee should not exceed $1000. You might wonder whether any sincere buyer would offer a $1 option fee. We would say, why not? You need to negotiate the option fee with the prospective buyer between $1-$1000.

What is option fee?

An option fee is not a deposit or down payment for the flat purchase. Its purpose is for a buyer to lock in your property for 21 days for his purchase. It’s non-refundable, which means that if a buyer decides after the option period not to proceed with the purchase of your flat, you can keep the option fee.

So, you may ask, “Is there a limit to the number of OTP that I can grant?” Nope. You can only grant an OTP once within the option period. If it lapses, then you can grant a new OTP to another prospective buyer.

Think of an option fee as a reservation fee. Once your home is reserved, no one else is allowed to buy it within three weeks aside from the one you’ve granted the option to.

What happens after granting the OTP?

After the action-packed marketing and sourcing for buyers, the deal isn’t sealed yet. Having the buyer exercise the OTP is the ultimate goal, hence, this stage is filled with questions such as “What if the buyer changes his mind?” Instead of sitting back and waiting for the end of the option period, we have compiled tips on what to do before the buyer exercises the OTP.

Unsure of how to continue with all the paperwork for the sale of your flat? Ohmyhome’s experienced agents provide documentation service at a fixed fee of $1,688. Call 6886 9009 to learn more.

Sources: HDB- OTP, HDB- Finance, HDB- Cost

Subscribe Now

Get a notification every time we upload a new blog post.

DIY 100% Free, No hidden or success fee

Buying your dream home in Singapore?

Featured Blogs

Highlighting unique property views for every Singaporean

get an agent

Buy with an Agent

Dedicated experts at your service

Documentation Services

Leave the paperwork to us

Do it yourself

Browse New Launch Condos

Find new units for sale

Prefer to do-it-yourself?

Check out how our platform can help

Browse Resale Properties

Download the app and speak directly to sellers

RESOURCES

Affordability Calculator

Calculate required tax for selling

Calculate Buyer’s Stamp Duty

Find the amount payable when buying

How to Buy an HDB

A step-by-step guide to buying HDB

How to Buy a Private Property

A step-by-step guide to buying condo/landed

bUY OVERSEAS

get an agent

Sell with an Agent

Dedicated experts at your service

Documentation Services

Leave the paperwork to us

do it yourself

Prefer to do-it-yourself?

Check out how our platform can help

Post a Listing for Free

Download the app and connect with buyers

RESOURCES

Free Home E-Valuation

Know the value of your property in seconds!

Calculate Seller’s Stamp Duty

Find the amount payable when selling

How to Sell an HDB

A step-by-step guide to selling HDB

How to Sell my Private Property

A step-by-step guide to selling condo/landed

get an agent

Rent with an Agent

Dedicated experts at your service

do it yourself

Prefer to do-it-yourself?

Check out how our platform can help

Browse Rental Listings

Download the app and connect with landlords

RESOURCES

How to Rent an HDB

A step-by-step guide to renting HDB

How to Rent a Private Property

A step-by-step guide to renting condo/landed

get an agent

Lease with an Agent

Dedicated experts at your service

Lease Documentation

Leave the paperwork to us

do it yourself

Prefer to do-it-yourself?

Check out how our platform can help

Post a Listing for Free

Download the app and connect with tenants

RESOURCES

How to Lease my HDB

A step-by-step guide to renting out an HDB

How to Lease my Private Property

A step-by-step guide to renting out condo/landed

FEATURED ARTICLES

Ohmyhome Raises US$5M in Series A+ Funding

Ohmyhome, the leading Property 
One-Stop Shop Platform

ARTICLE CATEGORIES

HDB

All things about public housing

Private Property

All things about private property

Home Improvement

Guides for must-know reno tips

Financing

All about mortgage solutions

Towns

Singapore townships in focus

Client Stories

Success stories from customers

Founders’ Message

From the desks of Rhonda & Race Wong

Social media

Other