Buying property in Singapore

There are several stages involved when buying a property in Singapore right from identifying the right property. One can look for the property in the local newspapers or take the services of the real estate agents. Professional property agents in Singapore assist the buyer in securing the property at best price and protect their interests throughout the purchase. The agents will also ensure that all documents are in order and that the seller is the rightful owner of the property. The Institute of Estate Agents (IEA) has published recommended commissions/fees for real estate transactions.

Check Property and Seller's Credentials
Check with the seller that any renovations and/or alterations to the property were approved and are legal. Agree with the vendor that if the authorities should require any illegal renovations and/or alterations to be rectified, the vendor will be responsible for rectification works, at his expense.

Engage a Solicitor
It is advisable to engage a solicitor to conduct a title search on the property to confirm ownership and title and carry out a bankruptcy search on the vendor.

The solicitor will lodge a caveat at the Singapore Land Registry to notify the public of the buyer's interest in the property, send out legal requisitions to the relevant government departments in order to ensure that the property is not subject to any adverse notices, and liaise with the relevant bank or financial institution and the CPF (Central Provident Fund) Board to ensure that the loan and monies are released on time. The solicitor will also prepare the transfer document and arrange for execution of the mortgage and/or CPF documents.

Option to Purchase
On deciding to purchase a property the first step is to get an Option to Purchase. This is done by making a payment of 1% of the purchase price. Usually 14 days are allowed for the buyer to decide whether to proceed with the purchase and to finalize the finance. There will not be a caveat on it at this stage but the seller cannot sell to anyone else.

If the purchase proceeds, the buyer must then exercise the option by signing and sending the purchasing documents to the seller's solicitor together with a cheque for a further 9% of the purchase price.

Alternatively the agent managing the purchase can prepare the Option to Purchase and present it to the seller. It must clearly state the price, sales completion date and other conditions. Terms and conditions can be drafted by a solicitor.

Once the Option to Purchase has been exercised it is unconditional on both sides. The buyer will lose the 10% deposit if they decide to pull out, and a seller who wants to opt out of the agreement will have to refund the 10% including the accrued interest.

The vendor has the right to seek recourse through the courts if the buyer pulls out, in the same way that the vendor cannot pull out or they may also risk being sued, so a seller cannot decide to pull out and sell to someone else.

Sales and Purchase Agreement?
A solicitor will be needed to prepare a Sales and Purchase Agreement. The sale should be completed within about 10 weeks, and stamp fees are payable before completion. Visit the Inland Revenue Authority of Singapore (IRAS) for more information on Stamp Duty.

Buyer and vendor should arrange a date for inspection of the property before completion of the sale. Check the fixtures and fittings, and also confirm which items the vendor is including in the sale price.

Completion
At completion, the Certificate of Title will be issued on payment of the final balance of the purchase price. While the mortgage exists, the bank will retain the Certificate of Title and will release it to the purchaser when the loan is fully repaid.

For new properties, payment is made progressively or upon completion of construction and issuance of the Certificate of Fitness for occupation. On completion the seller must hand over the property as agreed.

Property Taxes
Property tax is levied whether the property is owner-occupied, vacant or let out. The IRS of Singapore determines the annual value of the property and will tax the owner accordingly and send out a valuation notice. Objections to the assessment can be lodged within 21 days from the date of the valuation notice.

Pricing and Property Valuations
The Urban Redevelopment Authority publishes a guide to Private Residential Property Transactions with Caveats Lodged.

GOWEALTHY.COM © 2008
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Source: http://singapore.angloinfo.com