The Real Estate Buying Process for Foreigners in Singapore

Are you a foreigner reading this and want to Buy Real Estate in Singapore but not sure how to get started?

You’re at the right place.

In this article I’m going to give you an overview of the buying process.

Even if you’re completely green, don’t worry as I will break down process down into steps.

If you’re looking for professional advice at every step of the way, Get in Touch with me.

Let’s dive right in!

Step 1: Understanding Singapore

So, you may know already know Why you want to buy property in Singapore.

But do you know the areas of Singapore to consider?

TimeOut Singapore Map

Global magazine Time Out group is actually a great source of information on this.

Their website has guides to more than 50 Singapore neighbourhoods!

However, if you want something more straight to the point, check out my pick of the 5 Popular Locations Foreigners Need to Know Before Buying Singapore Real Estate.

Step 2: Finding Real Estate in Singapore

Armed with an understanding of which area in Singapore you want to look at, Step 2 is the Search Process.

A common source of course, is Google, where a quick search for ‘properties for sale Singapore’, delivers the following results.

 

 

 

 

 

 

 

 

These are online Real Estate Marketplaces like say… Zillow in the United States, Rightmove for the UK, and realestate.com.au by REA Group in Australia.

If you have searched for homes on an online marketplace in your home country, how the Singapore websites work should be very familiar to you.

Browse listings. Contact the Lister. Arrange a Tour. Like the unit? Negotiate Price and Terms.

Then, after you’ve found that property and agreed terms, the transaction process differs for new, still under construction developments, and completed properties.

Additional tidbit: do that note that if your preference is to window shop with brokerages on the street, that type of market presence is largely missing from the Singapore landscape. Most searches are online.

Step 3A: The Transaction Process for New, Under Construction

In a nutshell, payment required is based on the current progress of construction according to the following milestones.

Milestone

Payment
(as % of purchase price)

Upon Purchase

20%

Completion of foundation work

10%

Completion of reinforced concrete framework of unit

10%

Completion of partition walls of unit

5%

Completion of roofing/ceiling of unit

5%

Completion of door sub-frames/ door frames, window frames, electrical wiring, internal plastering and plumbing of unit

5%

Completion of car park, roads and drains serving the housing project

5%

Temporary Occupation Permit

25%

Certificate of Statutory Completion

15%

The initial Purchase takes 8 weeks.

It is a standard new launch under construction condo sale process which is regulated by the Controller of Housing and is standard for all such properties.

Here’s an explanation:

Day 0: Where you pay 5% of the purchase price to book the unit and receive an Option to Purchase (OTP) from the seller.

Within Day 0+2 weeks: Receive the Sales & Purchase agreement (S&P)

Day 0+2+3 weeks: Execute (Sign/Exercise) the S&P within 3 weeks of receipt, with stamp duties to be paid within 14 days thereafter.

Up to Day 0+8 weeks: Remaining 15% paid to complete the purchase.

Then, the next payment is required depending on the relevant milestone.

For example, if the partition walls of unit have already been built, the additional payment would be 10%+10%+5% = 25%.

Following which, the next 5% is only required when the roof/ceiling is completed.

At Temporary Occupation Permit (TOP), that is when keys are distributed, and owners can take possession of the unit.

However, the legal transfer of the property is only upon Certificate of Statutory Completion.

In Singapore, the typically build timeline from initial launch sales to TOP, is around 3-4 years.

Step 3B: The Transaction Process for Completed Property

While new properties are usual preferred by most buyers, there may be reasons to consider existing resale properties.

Importantly, unlike buying a new construction property which is strictly regulated by our Singapore authorities, a completed property purchase is a private arrangement between seller and buyer and hence every detail such as the option fee, exercise period, completion length and even contractual terms can be negotiated!

Still, there are some market guidelines which are often followed:

Day 0: Where you pay 1%-5% of the purchase price as deposit (“the Option Fee”) to reserve the unit and receive an Option to Purchase (OTP) from the seller.

Day 0+2 weeks: Commonly 2 weeks, this is the time you have to execute the option. Where buyers are taking a loan, the mortgage is confirmed with the bank during this period. For those who do not need any financing and are paying fully in cash, they can even proceed to the next step immediately.

During this period, buyer has the right to buy the property.

If they do not proceed however, they lose the deposit.

Sellers cannot retract their intention to sell.

Execute the Option: Pay an execution sum typically ranging from 5%-20% (less “the Option Fee”), as indicated in the OTP. Stamp duties to be paid within 14 days thereafter.

Completion: 8 – 12 weeks from Option execution. Complete the rest of the payments to the seller (the remaining sum to make 100%) and collect the keys to the unit.

A definite attraction of resale property is being able to receive possession of the unit fast.

Note: whether buying new or completed, you’ll need a property lawyer to manage the entire transaction.

This typically costs about 0.3% of the purchase price.

So that’s it! You’ve got your house.

Overall, the buying process is very similar regardless of whether you’re a foreigner or local.

The main difference is in the Stamp Duties. (Find out the difference here)

Nevertheless, how many buy/sell transactions do we make in our lifetime?

Especially as a foreigner, there could be many unfamiliar things to navigate…

And it’s also not a small transaction. Worth millions of dollars, any mistakes can be really costly!

Why not let a licensed professional help you with this journey?

Contact me for a discussion!

For further self-reading about how you can get started with Singapore Real Estate, I have the perfect guide for you.

Check it out!

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