You have just made up your mind to start hunting for property in the market, there is no other place to go other than visiting the new launch condo show flats. It is a nice step but you have to hold your horses first. There are a few prep work you have to do before stepping your foot into the awesome looking show gallery. First, you have to know that showflat shows operate on a first come first served basis, going unprepared you may end up missing the right unit for you to someone who comes prepared. Below is a step by step guide of the mandatory prep work before visiting any showflat:
Step 1 – Know Your CPF Usage
If you know you’re going to use your CPF you should find out how much you are able to use to purchase the property. For first-timers, your CPF is limited to your entire Ordinary Account funds only. For the second and subsequent purchase, your CPF amount is dependent on both your Special Account and your Ordinary Account. Visit www.cpf.gov.sg to log into your CPF account to the exact amount you’re able to use for your property purchase.
Step 2 – Securing Your Housing Loan
This is a very important step many buyers have been overlooking for long. After your CPF is settled you need to ensure that the bank is willing to lend you funds for your purchase. Approach any mortgage broker or a banker and apply for Approval In Principle (AIP) for free and in about three days. Remember to have all the required documents with you.
Step 3 – Know Your Additional Buyer Stamp Duty
Your first purchase is free from any additional buyer stamp duty if you’re a Singaporean. The second and subsequent purchase will attract a duty of 7% and 10% respectively. If you’re a permanent Singaporean your first purchase attracts a duty of 5% of the price and 10% for the subsequent purchases. For foreigners (non-Singaporean) every purchase is taxed 15% of its price.
Step 4 – Know How The Normal Progressive Payment Scheme Works
Understanding how this scheme works helps you plan all your cash flow in advance. After confirming your choice unit you will need to:
- Pay 5% to the developer’s account in exchange for the (Option To Purchase) OPT
- In two weeks time, the developer will send the Sales and Purchase Agreement (S&P) to you or your chosen lawyer.
- Upon receiving the Sales and Purchase (S&P) you have three weeks to exercise your option. If you fail to exercise your option within three weeks 75% of the Option To Purchase fee is refunded to your account.
- The Stamp Duty and Additional Buyer Stamp Duty (if applicable) should be paid within 14 days after your exercise.
- The remaining 15% is should be paid within 14 weeks after the initial OPtion To Purchase (OTP) date.
Step 5 – Know the Balloting Process
Most often the new launch condo developers will have a period of one to two weeks for pre-launch before the official launching day. This period is meant to allow buyers to know the available unit sizes and finishing. During this period buyers are allowed to register for a non-obligatory seat on the launch day. On the official launch day buyers who have already registered are invited to the show flat where they participate in the balloting process to select their choice unit at a very high discount before the general public steps in. To register for balloting you need to have the following documents with you:
- A copy of NRIC or passport.
- A filled and signed copy of the Expression of Interest form.
- A cheque that is addressed to the developer’s account.