The next steps, decisions and documentations.
“So you have choosen your unit, what’s next”
Congrats! Now that you have decided to buy your property, be expected to live your dreams in years to come. However, to make your goal remain one instead of remaining a dream, you would not want to be caught by surprises, or unforeseen payments or procedures to deter you from exercising the property until making your first foot into the unit.
Here are the steps to note after you have received your Option to Purchase (OTP).
- From the time you paid 5% and received your OTP, have you decided to use your bank loans and CPF? If so, you will need to
- Know your manner of holding (If you buy the property with someone else)
- Choose a bank, or make a comparison to decide which bank to take your loan from
- Choose a law firm (Propertywiki tip 101: Be sure to check that the firm quotes an ‘All-in’ price, so you don’t get a heart attack. Propertywiki tip 101: Check if your law firm is in the panel of the bank you choose)
- Receive your Sales & Purchase Agreement (SPA). Usually a duplicate or Triplicate Copy with the Developers’ Law firm’s letter in it.
If you have informed your agent upon purchase that you have selected a law firm, your agent will arrange with the Developer to send it to them directly.
There are a couple of things to note on;
- namely, the date that your law firm or you receive. (You only have a deadline of 21 days to exercise the document).
- By the way, Exercise document = the day you sign in the presence of the lawyer + sent to developer’s law firm. Doesn’t mean the day you sign is the exercising day. You can sign in advance and inform the law firm when is the latest date to exercise.
- If you miss the date, the developer assumes you would not want to proceed anymore, and they are entitled to deduct 25% of your booking fee (Meaning 25% off the 5% money you paid to the developer for the OTP)
- Special mention: If you do exercise, however, YOU WILL LOSE 20% OF PURCHASE PRICE.
So now that you have noted and planned on the above, what’s next?
It’s time to go meet the one person who stands by your side should you face any problems with your property matters, (Aside from your dedicated agent, of course). Your legal representative, indeed. Their core duties are as follows:
- Facilitate for your CPF withdrawal (if you are using it to pay for your lump sum property/mortgage loan repayment)
- Mortgage document (It’s a document that they will liaise with your bank’s credit department internally to make sure the money comes out from the bank to pay to your developer)
- Advise you on the fine details of your S&P agreement (The relevant clauses you must note, the breakdown of payments to pay, when do you get your keys? What to do for your DLP, etc)
- For very elaborate details, read the details here.
So why choose a law firm who is in the panel of the bank?
It’s simply because you do not need to bear the extra cost for your law firm to engage another law firm within their panel So do note this: In the panel, no extra fees, not in the panel = legal fees + extra top up.
Finally, the last keynote: If you are buying with someone, decide if you want it to be Joint Tenancy or Tenancy-in-Common. The differences are:
- Joint Tenancy (JT): 50% share each (for 2), 33.33% each (for 3), 25% each (for 4).
- Tenancy-in-Common (TIC): You can choose any % you like for each person. 20% yourself, 80% your co-owner. But, you can choose 50% each too.
- Then what’s the difference? JT is for survival of the fittest. The one who leave first, the other person’s share will go to the other in equal amount automatically. TIC wise, not automatically, the one who passes away would need a will to decide exactly how his/her share is to be distributed accordingly.
Okay now that you’re ready, be sure to prepare your funds, bring along all the necessities that your lawyer tells you to bring. Some standard items are:
- Your NRIC(s)
- Power of Attorney – Only if you cannot be present and you assigned someone to sign on your behalf.
- Marriage certificate (For married couples purchasing together only)
- Birth certificate (For parents and children purchasing together)
- CPF Overview (Details that Shows your OA, SA, Medisave)
- Bank mortgage Letter Of Offer
- Chequebook (Lump Sum Payments, Stamp Duty Payments, Legal Fees)
- Note: Not required only IF you are using CPF to pay for everything
- This only works for new launch private properties
- Recorder: To record down your discussion with your lawyers so you don’t forget what they tell you. (Your S&P Agreement may not be the easiest thing to understand and you may forget the very important stuff)
For more in-depth details on the S&P Agreement, read here.
And you are officially a homeowner! Congratulations to making your footprint towards your new property. Do contact us if you have any further queries and we will do our best to answer it if it is not found in the guide!
Click here to read part 1
Click here to read part 3