Buy New Project From Developer
Buying new project from developer is of its exciting advantages for a potential buyer. Here are some top reasons why you should consider to purchase at new launches.
- Enjoy the latest design by renowned architects, and the improving quality and comfort with technological advances and latest manufacturing standard.
- Total new condition: you need few renovations or repairs, which are obviously the benefits new homes can bring along. Today’s new homes are engineered specifically to minimize maintenance work.
- Energy efficient and eco-friendly environment: nowadays more and more new properties are developed accordance with energy-saving and eco-harmony requirement. You will live in a safer and healthier condition when you move in.
- Competitive price and promotional bonus: homebuyers like properties with high quality and reasonable price. The developers know cheap-looking selling price makes great sense. By pricing at the right position, they will often offer some discounts on the selling units to attractive the keen buyers.
- Progressive payment scheme: you just need prepare the 20%~30% of selling price as the down payment after signing the sales and purchase agreement. Then you just follow the schedule to make payment progressively. For those who leverage on the bank loans, your monthly instalment is significantly lower than the one of similar resale unit before the issue date of Certificate of Statuary Completion or Temporary Occupation Permit.
- One warranty for defects liability: the principle of caveat vendor applies. The developer has the liability for any defects and variation from specifications within the 12-month defect liability period.
- Potential capital gain: you are the first owner of your desired project. Put it in the resale market in future as first owner and you can reap the most harvest from your investments.
- Enjoy the transparency, standard and easy procedures, no headache of negotiation with individual seller and multiple appointments to view houses.
Next, is there any helpful buying guide for homebuyer to refer to? Yes, here we collect a useful guide on buying property from developer. You can refer to the following step-by-step process for a smooth and comfortable purchase.
Step 1. Do your homework and self-check
Before you visit a showflat or view any unit, you should be familiar with the governmental policies to buy, market information, finance planning and all the cost for purchase, and rights and obligations binding with sales and purchase agreement and so on. Here are some questions you should have the right answers:
- Have you fulfilled the minimum occupation period before you can purchase private residential properties, if you own a HDB flat, DBSS flat or Executive Condominium?
- Have you, for non-Singapore citizen, obtained approval from the Controller of Residential Property before you may buy landed houses, including strata landed houses?
- Have you known the market information about transaction price, or monthly rental similar to the new launch project you are keen to?
- Have you evaluated your financial condition wisely? How much cash can you use? How much CPF can you use? How much bank loan can you borrow? Have you prepared for stamp duty fee, lawyer fee, or additional stamp duty fee, or seller stamp duty fee, etc.?
- Have you consulted your lawyer about the purchase procedure, rights and obligations after your sign the documents such as standard Option To Purchase, Sale and Purchase Agreement?
Step 2. Visit showflat to view site plan, property unit and market sentiment
Once you have done your homework, you are ready to visit showflat. In the showflat, you are advised to make certain of as many as possible matters about the project and unit. Here are them:
- How much different between the show flat and actual unit to be constructed?
- Does the developer have obtained a sales license and building plan approval that allows the developer to sell housing units?
- Have you gone through the site plan, floor plan, floor area, especially the specifications of the unit?
- Have you make sure the approval use of property and possible conditions and restrictions imposed by relevant authorities?
Step 3. Fill and submit Expression of Interest (EOI) to developer’s appointed agency salesperson
When you hear news that the new project is going to launch after you visit its showflat, we call this the preview period. During the VVIP preview period, you are encouraged to express your interest with filled EOI form attached with all the buyers’ NRIC photocopies and blank cheque and to submit to your preferred agent.
This is critically important when you have concluded the new launch is a good buy. With full document EOI submitted to developer representative, you will be issued a ballot ticket and given priority to choose the preferred unit on booking day before open to the public. Just imagine you could not get your ideal unit without the priority system, other buyers who have received the ballot ticket could do.
Step 4. Show your interest in Option To Purchase by paying a booking fee
If you have decided to purchase the property unit, you are required to pay a booking fee in cash, between 5% and 10% of the purchase price and accept the Option To Purchase from developer. Here are some things you should reminder.
- The validity period of option is 14 days. So the developer should delivery the Sale & Purchase Agreement to you by hand within 14 days after granted the Option to you.
- The purchaser is not allowed to assign or transfer the Option to Purchase that has been granted to him by the developer to any other persons. You should fill in all intending purchasers’ names in the Option To Purchase.
- Option To Purchase is valid for 3 weeks from delivery of the Sale & Purchase Agreement to the purchaser.
- To exercise the Option, the Sale & Purchase Agreement has to be signed within 3 weeks and the balance down payment paid, which is usually the 20% of purchase price minus the booking fee for the 1st property buyer.
- 25% of the booking fee from purchasers will be forfeited if the Option is not exercised.
- Expected vacant possession date is stated in the Option to purchase. The developer has to pay liquidated damages to the buyer if fail to deliver vacant possession on time.
Step 5. Exercise the Sale & Purchase Agreement
After sign the Option, you will receive a standard form of Sale & Purchase Agreement in hand from developer. You have around three weeks to decide to exercise the agreement or not. Here are the key points you should keep in mind.
- What are your rights and obligations once you Exercise the Sale & Purchase Agreement?
- Have you prepared for your down payment, stamp duty fee?
- Have you got the approval-in-principle letter from your banker and arranged the progressive payment schedule?
- What are your rights and obligations once you Exercise the Sale & Purchase Agreement?
- Have you known how much is your share value which determines the share in the project and maintenance charges payable?
- Have you read through the specifications of unit again to make sure about the type of materials, finishes, fittings, appliances, furnishings, etc. to be used or provided for a unit and the common facilities?
- Have you informed the developer in the case of sub-sale your unit which is not completed yet to another purchaser?
Step 6. Move in with Notice of Vacant Possession from developer
When Temporary Occupation Permit has been issued as the construction moves on, the developer should deliver vacant possession of the unit to you on time. You can move in with keys. A feeling after long time of expectation triggers you exciting. No brainer, you will go through every space of your unit. Here are some things you should aware:
- Have you made a thorough inspection of the unit and common property upon taking vacant possession to make sure there are no defects?
- Have you know that there are 12-month defects liability period during which the developer is obliged to rectify these defects free of charge?
- Have you understand procedure and method to rectify defects?
Step 7. Complete the sale and issue the legal title of ownership to you
Once the project goes to the completion of sale, the developer should issue a Notice to Complete to you. Once completion, the developer should convey the unit to you with a legal title which can be either a Duplicate Subsidiary Strata Certificate of Title for strata subdivided property or a Duplicate Certificate of Title for non-strata subdivided property.
Duration the years of purchase process, what makes you concern secondly most should be the progressive payment schedule besides the quality and progress of construction. The following table shows a standard progressive payment scheme you can refer to for arranging you payment more smoothly. as shown in the table, for the home buyers who apply for bank loan, the maximum loan to value ratio for the first, second, third and subsequent mortgage loans can only be up to 80%, 50% and 40%, respectively. The minimum cash down payments are 5%, 25%, 25% respectively too.