Dear Value Client,

To enhance the general awareness on the proceeding of Real Estate Acquisition for both Property Owners & Potential Buyers who possess interest in properties in Singapore.

I) Option To Purchase. Upon agreement of Selling/Purchase price between Property Owner and Potential Buyer,

1. The Realtor will prepare the Option To Purchase (OTP) form as assigned by Realtor Agency;
2. Buyer will issue a cheque in favour of the LEGAL Owner amounted to 1% of the Purchase Price (market practice) as an Option Fee;
3. Owner will sign on the Opion To Purchase form upon receival of Option Fee.
4. Buyer will retain the original signed copies while Owner will receive duplicated copies thereafter.

II) Exercise Option. Buyer will be required to exercise the received Option within 14 days from the date of issue stated in the document, he/she will be required to:

1. Engage a Lawyer as Buyer's Solicitor in acting for the interest of Buyer.
2. Present another cheque amounting to 5% of Purchase Price LESS Option Fee paid (i.e. 4% for this case) to Owner's Solicitor via Buyer's Lawyer.
3. Acquire Letter Of Offer from Financial Institution IF the Buyer is applying for morgage loan for the property purchase.
4. Buyer take note that both original signed Option and the cheque for balance amount are to reach Owner's Solicitor BEFORE the expriy of the Option.
5. Owner will have the legal right to retain the entire amount of the Option Fee IF Buyer has failed to exercise the Option before the expiry date.
6. Owner will be required to engage a separate lawyer agency as Owner's Solicitor in acting for his/her own interest.

III) Stamp Duty Fee. Buyer will be required to pay Stamp Duty to IRAS within 14 days UPON Option exercised. The amount payable will be calculated basing on the Purchase Price or Market Valuation, whichever is HIGHER, following below stated break down:

1. 1% for the first SGD180'000 = SGD 1'800
2. 2% for the second SGD180'000 = SGD 3'600
3. 3% for the remainder amount thereafter

IV) Completion Of Sale. From this point onwards, the duty & responsibility lies between the Solicitors of both parties. Generally, the sale transaction will be completed in 8~12 weeks duration, where both Buyer and Owner will mutually agree upon an estimated completion date. During Exercising of Options, Buyer can request officially for an Inspection Of Property before the completion of sale.

1. Documents required by Buyer Solictor after Option exercised (For Buyer Only)
   1. CPF Statement (All legal Buyers of the property [i.e. Husband & Wife], if CPF is to be utilised)
   2. Photocopy of Identification Card
   3. Letter Of Offer from financial institution.

V) Commission Payable. For private property in Singapore, the commission payable upon transaction completion stands in between 1~2% of the selling price, borned soley by the Owner. However, there are occasions where Owners sold their property at extremely low price that Buyers paid for the commission instead. Owner or Buyer shoud ensure the receival of Official Invoice being issued from registered property agency, thereafter a crossed cheque in favour to the agency shall be issued. DO NOT pay cash directly to the property agent.

Thereafter, enjoy your new dream home!!!

Still have doubt?? Call me now..

Written & Edited by Ronnie Chong