Step-By-Step Guide To Buying A New Launch Condo In Singapore

With more than 30 new launch condos being lined up for first half of 2020, you may be considering to buy a new project to stay or as a investment.

But how do you go about getting yourself one of these new condos?

Step 1. Check Your Finance Capability

Before starting on anything, it is best to sort out your finances. Finding out how much you can afford for the property, how much CPF is avaiable for property purchase, how much loan you can get and what other fees required etc, is the most important step. This will save you from incurring more costs later on.

Guide to Buy A New Launch Condo

Above is the table for Loan to Value Limit(LTV) for Private Residential Property. Based on the table, you can find out how much is the LTV you can qualify depending on whether you have any exisiting mortage loan and also the downpayment require for the purchase.

Besides LTV, you also need to take into consideration the Total Debt Servicing Ratio (TDSR) rules , which states that your total loan liabilities (including car loans, credit card debt and so on) cannot exceed 60% of your income.

Lastly, you have to factor in Buyer’s Stamp Duty and legal fee. If you already own 1 or more property in your name, you have to factor in the Additional Buyer’s Stamp Duty.

[Recommended articles: Guide To Stamp Duty For Property In Singapore]

It is highly recommended to get a get an In-Principle Approval(IPA) from a bank before purchasing you new condo. IPA is an agreement with a bank, stating the amount of loan that you can loan from the bank within a validity period, usually between 7 to 30 days.

Step 2. Check Out The Condo Showflat And Submit An Expression of Interest

Now armed with your budget, it is time to shop around for the new launch condo that is ideal for you. You can either do the research on your own or engage a real estate agent to give you advice.

You can engage our real estate consultant from YourNextProperty101.com for free consultation and advice here >> https://yournextproperty101.com/buying-property-in-singapore/

Once you have shortlisted the projects that you like, you can visit the developer’s show flat to have a look at the mock-up unit and the project model. For new condo launches, usually there will be a preview day usually 1 to 2 weeks before actual launch day. During the preview, the units for sale and the acutal pricing will not be avaible at this point in time. However, potential buyers can submit their interest by filling up the Expression of Interest (EOI) form, together with a blank cheque issued to the developer’s project account.

The cheque allows the potential buyer a chance to obtain a balloting queue number on the launch day. The cheque will be returned to the buyer without any penalty eventually if the buyer does not wish to proceed with the purchase.

Step 3. Select And Book Your Unit

On launch day, the potential buyer will be given a ballot number. The buyer has to be present once the number is called or else the opportunity to select the units will be forfeited. Once the number is called, the buyer has to select a few units based on the preferred choice. Usually, there will be a queue before the selection, it is advisable to have a few choices in case the first choice is the taken up by other buyer ahead of the queue.

Once the unit is booked, the buyer will have to fill up the blank cheque the amount which is equivalent to 5 percent of the purchase price of the property. After that, the buyer will be given a set of Property Details Information (or ‘PDI)’ documents – this is a set of all the floor plans, rules and regulations, offered items and other documents related to the unit has booked. At this point in time, the buyer will be issued with the corresponding Option To Purchase (OTP) for the unit.

If you are not buying a new launch condo in 2020, but projects that are launched previously, you will only need to visit the project’s show flat and select the unit you want to purchase and proceed with the booking. You will not to go through the preview launch and balloting process.

Step 4. Hire Solicitors And Secure Your Bank Loan

With the OTP, you are now ready to secure the bank loan for your property. Go to the bank with the OTP and the bank will issue you a Letter of Offer, which is a formal contract that states the terms of the loan package.

You’ll also have to engage a lawyer to do the conveyancing work for you, it is advisable to engage a lawyer that is in the bank’s panel of lawyers. Legal fee for conveyancing is around $2000 to $3000.

Step 5. Sign Sales & Purchase Agreement And Pay Stamp Duties

Within 2 weeks from the date that the Option To Purchase is issued, the developer will deliver the Sales & Purchase Agreement (S&P) to you. You will have to sign and exercise the S&P within the 3 weeks from the date on the S&P. Upon exercising the S&P, you’ll need to pay the Buyer’s Stamp Duty (and ABSD if applicable) within 2 weeks of signing it.

Subsequently, within 8 weeks from the date of OTP, you’ll have to pay the 15 percent of the purchase price (which is the remainder of the downpayment) in cash or CPF monies or a combination of both.

Step 6. Start Paying Progressively

The remaining 80% of the price of your condo will be made progressively, each time the developer completes a certain stage in construction:

Step 7. Collect You Keys

And finally, after the condo TOP, it is time to collect the keys.

After you have collected your keys, it is not over yet!

You will have 12 months of defects liability period to check for all kinds of defects in your condo unit.

With so many new launch condos available in the market, it can be quite confusing on which is the right one to purchase. It is advisable to consider and research carefully before making the purchase. Do consider factors like whether the property is at a good location, close to an MRT station, the entry price and whether the unit will be easy to rent out in the future after TOP. When in doubt, you may contact us for free consultation and advice.

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