How to buy a condo in Singapore if it can be done in 28 Days.
Our 28-day guide to help you buy a condo will give you the information and knowledge you need to be a Savvy Buyer.
The Pros: it doesn’t have to take 28 days! Most of these steps can be completed in a week or two.
The Cons: Sometimes, it takes a lot longer to buy a condo… Low inventory, High Asking Prices, Owners moving the goal post (Deciding to change the asking price after receiving offers), or changing needs can mean it takes longer to get what you want.
Note: Sometimes, after the government implements a cooling measure, it may cool off the market for a few weeks before the buying interest builds up again.
How to Buy a Condo: Day 1-7 – Get Your In-principle Approval
Day 1: Prepare the vital paperwork. The banks will need a few things from you to pre-approve you for a mortgage:
- NRIC for all buyers ( Front & back )
- Last 3 months computerizes / electronics Payslip + 3 mth bank statement showing salary crediting for employed oversea
- For Self Employed, you must show the past two years of Notice of Assessment (NOA).
Day 2: Get your downpayment together. You’ll need at least 5% of the purchase price as a downpayment to buy a condo if you do not have any mortgage property loans under your name. If you plan to Buy first and Sell, you may want to clear off your existing bank loan for you to be eligible for the 75% Maximum Loan to Value with a 5% Cash Component and 20% CPF/Cash Component. (You have to side aside more Cash/Cpf if you have an existing property in your name)
- You need to have at least the 1% option money for Resale, 5% Upfront for New launches. If the money isn’t easily accessible – for example, you need to sell your shares first – you can plan the funds to come in based on the allocated timeline. Usually, be within two weeks to up to three months or more to provide mutual parties agreement.
- If your downpayment is in a high-risk investment, consider cashing it out earlier so it isn’t subject to any blips in the market. I have ever encountered that after the buyer placed the 1% option money, the stock market had a major correction, and due to that, the buyer decided to forgo the option money and does not want to liquidate the stock as he has a larger stock at the moment of time.
Day 3: Make sure your deposit is accessible. You’ll need to either have a cheque or, nowadays, we see more commonly that the option money can be made via bank transfer (Fast Mode) which the home seller or developers receive and check instantly upon the transfer is being made.
However, if you plan to do so via bank transfer, the agent should do their due diligence to ensure that the bank account and payee details should be in the Vendor’s name and not anyone else.
Day 4: Find out about your chosen bank with competitive interest rates. – to help first-time homebuyers buy a condo and do their financial planning with prudency:
- Compare the advantages and disadvantages between Fixed Rates and Floating Interest Rates.
- Although the Banks strictly follow MAS, the different banks have different procedures and SOPs. Some banks do not give in-principle approval. Some banks are fine if you can sign some declaration forms, and some will be very strict that you need to see all your bank credit card statements, if any.
Day 5: Get pre-approved for a mortgage. Knowing how much you can afford before you start shopping or buying a condo is essential, so getting pre-approved for a mortgage is an important step. Getting a mortgage for a condo is slightly different than getting a mortgage for an HDB:
- Bank’s Mortgage application form (Needs to Sign by all borrowers)
- Declaration form for credit Facilities form attached (To be signed by all borrowers, each borrower must sign a copy.)
- HDB page to show no HDB housing loan -> Log in to www.hdb.gov.sg using singpass ->select “My Flat”-> select “Purchased Flat” -> select “Financial Infor” and the page will show “You do not own an existing HDB flat as at 25/05/2023. (S1234567C, enquirer’s NRIC number).
(To Note: Do not use digital signature for all the forms)
Day 6: Educate yourself about closing costs. During most of the time, the Seller pays the fees; you can appoint an exclusive buyer agent to work with you hand in hand to recommend and find you a condo that meets your needs.
Other closing costs include legal fees, valuation fees, and any adjustments (for example, reimbursing the Seller for prepaid expenses includes the property tax and MCST fees.
Day 7: Be ready for the costs of owning a condo:
- Condo MCST Fees: It may be surprising that condo fees vary significantly between buildings. Depends on the number of units in the development and how efficiently the committee team can do the cost-efficiently. This cost is on top of your mortgage loan. Note: condo fees generally increase each year. If you’re buying a brand-new condo, you can expect the first few years of increases to be significant.
- Other Expenses: You must also pay broadband, term insurance loan (Optional) and property taxes.
- Building Upgrading Cost: condos will be due to Repainting usually works within a 5-7 Years window. Most of the time, it will be using the money from the sinking funds, which also means that the funds would be depleted, and the residents may have to pay any unexpected or unbudgeted expenses.
How to Buy a Condominium: Days 8-15 – Figure Out What You Want
Day 8: Get your team in place. Buying a condo is a team effort, and you’ll want to make sure you have the right team in place:
- You can work with the BUYCONDO Team– Your Agent plays a critical role in ensuring you buy the right condo in the right neighbourhood – and of course, negotiating the price and terms of the agreement. Do your research before hiring a real estate agent – read online reviews and get recommendations from friends and family. Trusting the wrong agent could cost you tens of thousands of dollars and cause you a lot of grief. Preferably one that is experienced and can flag cases when there are any abnormalities.
- Real Estate Lawyer – Your lawyer will give you sound advice on any request and how to safeguard your interest. They will also be the ones working with the appointed Bank that does the disbursements on the completion of the sale.
- Banker or Mortgage Broker – Whether you work with your current bank or bring in a mortgage broker to find you the best deal, involve them early.
Day 9: Determine your needs and wants: Neighbourhood – Condominiums in the heartland, city fringe or core districts (CCR/OCR/RCR). Do you want to live in the middle of the action or on a quieter residential street? How important is easy access to MRT and highways if you drive and the proximity to your workplace?
Day 10: Determine Your Needs and Wants: Type of Condominium
- Condos vs Apartments– Which one is right for you? High Density or Low Density. Kids Friendly or prefer someone more suitable for the yuppies.
- Condos in low-rise, mid-rise, or high-rise buildings are based on plot ratios to determine the type of buildings you prefer.
- Lofts or Non-lofts – Personal Preference and Lifestyle.
- Building Size – Would you rather live in a small boutique building with fewer units and amenities, or do you dream of a high rise with all the bells and whistles and a concierge?
- Building Facilities – 50m lap pools, 24-hour concierge, bowling alleys, massage tables, dog washing stations and billiards rooms, function rooms for aerobics classes etc. These are all your wants and may not be your needs.
- Building Type – Mix-development Integrated Projects or Pure Residential. If you need to access to the MRT, supermarkets, and bubble tea shops just right below your residence.
Day 11: Determine Your Needs and Wants: Condo Unit
- Unit Size – How much space do you want? How much do you need? How many toilets do you minimally need? Condos are usually priced by square foot, meaning that the bigger the apartment, the more expensive it is. How will you use your space? Is a balcony or patio worth for the extra of extra $100,000 to $200,000 it might cost?
- Unit Features – Fancier finishes and Branded Appliances = money. Don’t forget: there are some great opportunities to buy slightly older condos needing refreshments and save some cash.
- Parking – Not all condos have free parking, and not all can allow more than one car lot per household. If you don’t need parking, this might be an opportunity to save money. Some Condos that charge the parking space separately are found within CBD areas or in Mixed Developments.
- Storage – Do you need a Store Room? Having a Condo without one means if you decide to keep one item (Furnishings/Movable), you are more likely to give away the existing to create space for the new.
What compromises are you prepared to make? Everybody makes compromises.
Day 12: Get To Know the Market
- Market Reports and News may not always be as accurate as expected. Those reports can be reported largely on an overall but not on a particular condo with other strengths, such as being near Elite Schools or Malls with higher demands.
- Start looking at the last transacted prices and a reference to the current prices for sale. You may find opportunities within some specific developments and areas.
- Talk to your agent and understand the demographics, actual demand, and possible growth in the area.
- Not getting the true reflected situation may lead you to miss some good properties being taken up faster than you can decide.
Day 13: Get Your Helpers Onboard
- If others (spouse, partner, parents) are involved, get them feedback.
Day 14: Finalize Your Budget At this point, you should be pre-approved for a mortgage, so you know how much you can spend; you’ve become familiar with asking and selling prices in the neighbourhoods and buildings that interest you; now it’s time to decide: how much do you want to spend to buy a condo?
Day 15: If you haven’t already, call the BUYCONDO team! We’ve sold hundreds of condos and pride ourselves on helping condo Buyers navigate the path of condo ownership.
How to Buy a Condo: Days 16-20 – The Property Search
Day 16: Start searching online – Pretty much every condo Buyer first sees the condo they eventually buy online. There are a few ways to search for properties online:
- www.buycondo.sg is catered for home buyers to find suitable condos available in the area of their choice.
- Custom Listings. Another way to get quick and easy access to properties for sale is to have your agent send you a daily email with new listings that match your criteria.
- The best way to search online is to have your agent set you up a Property Search Whatsapp Chatgroup (including you and your partner) where you and the agent can set up multiple search parameters and keep each posted when there are new listings.
Contact the BUYCONDO team to set you up on a property search.
Day 17: Start looking at condos in person – Let the house hunting begin!
- Working with your agent and remember to block of time slots that you are available, you can book private showings at the condos that interest you.
- Leave it to your agent to do the coordination and prep work and call if needed, as your agent may know how to handle and ask questions that can be useful for you and consolidate from you.
Day 18: Condo Due Diligence When you find an apartment or condo unit that interests you, it’s time to do some due diligence.
. Here are some of the things to be on the lookout for:
- Main Contractor Reputation – Who originally constructed the condominium? What’s their reputation and history with similar condominiums?
- Quality of Construction – Just like there are good and bad developers, there are excellent and lousy condo buildings – buy a good one. The quality of the construction doesn’t only impact appearance – it impacts maintenance, costs, noise and resale values. Work with a REALTOR familiar with the condos and builders in your target area – they’ll have great intel about the buildings that may not be obvious to you.
- Unattractive Features – When shopping for a condo, look for things that might detract from value – small windows and dark spaces with minimal natural light, foul odours from neighbouring businesses, non-ideal views and noises from ground-level tenants or nearby garbage facilities.
- Owner/Occupiers vs Tenants – If you’re a tenant right now, you’ve probably never considered the impact tenants can have on property values. So you can know who may potentially be your neighbours. Would there be more demand in the car park lots or not.
- Condo Management – Property management companies vary in quality, and well-managed buildings hold their value better and are more pleasant to live in. The condo board is responsible for hiring and managing the property management company, which employs the staff (on-site property manager, concierge, cleaning company, etc.). Find out who the property management company is and do some research.
- Building History – You can tell a lot about how a condo is run by looking at its history. Any Horror Lawsuits between the MCST and the Owners?
- Condo Upkeep and Maintenance – Will the building you’re considering buying in be attractive to other buyers? Is it in a good state of repair? When you walk into the lobby after a long day from the office, will it feel like home?
Day 19: Unit Due Diligence
- View – Don’t get attached to a view (unless it’s the sea view, and even then…). Are there any empty plots nearby or in front? whether a condo probably is constructing there in a few years. And while you may have paid for a great city view when you bought the condo, you realized the view would not be there forever.
- Neighbours – While your neighbours will come and go, finding out what you can about them doesn’t hurt. Do they have an unattended dog who barks all day? Are there many pairs of shoes outside your neighbour’s house placed untidily?
- Use all your senses – What do you hear? What do you smell? What do you see?
Day 20: Neighbourhood Due Diligence As with all real estate decisions, location, location, location is key. Consider:
- Transportation options, demographics in the area and building and is there any potential growth in the prices in future? Are we anticipating any buildings that are going en bloc or future GLS?
- Proximity to grocery stores, parks, schools, and nightlife is essential for your enjoyment and important for resale.
- Prices – You cannot expect the prices all to be similar because there is a mixture of motivated and non-motivated sellers. If you buy a condo in an appreciating market (going up in price), it can still be worth it to pay a bit more now, which is quite normal as the property sellers may price it in, especially for some obvious reasons going on such as the surrounding prices are calling a lot more than the condo that you shortlisted.
How to Buy a Condominium: Days 21-28 – Offer Time + Closing
When it comes time to make an offer on a condo, all these steps will happen simultaneously. In the meantime, educate yourself about each phase of the offer and closing process.
Day 21: The Right Offer Price– How much is the condo worth? What should your offer be? Your agent will be critical in helping you understand the condo’s value. While the price per square foot in the building is an essential factor, there are plenty of other things to consider when comparing one condo to another, including:
- What floor is the unit on
- View
- Facing (north/south/east/west)
- Layout
- Unit Mix (This is very Important)
- Upgrades and renovations
- Ceiling height
- Unit Number
For a complete review of how condos are priced, check out Valuing a Condo.
Day 22: The paperwork–
- Offer to Purchase – To state your intentions to buy and the price that shall be offered. If there is any special requirements be good to state clearly during this stage.
- Tenancy Agreement– To be clear on what you will expect to take over, especially when getting a property with a tenancy. Are there any special clauses inside that you should be aware of? Your Agent can help you to vet through and flag if there are any, as they are usually familiar with how the standard tenancy agreements are usually drafted.
- Option to Purchase – the legal document containing the sale’s price, terms and conditions agreed to by both the Buyer and Seller. Are the sellers using their appointed agency standard OTPs, or will they be using one that is drafted by their Lawyers? If it is non-standard, seeing a draft may be good.
- Completion Date and Seek for Cooperation– While the parties will agree on a completion date, the timeline is usually around 3 to 4 months. Please be ascertain that you are ok with the completion date, as it will be difficult to please the seller if you want to change the date to another, subjecting the seller to consent.
Day 23: Make Sure Your Deposit is Ready!
I know we covered this before, but it’s essential to access it.
The Buyer provides the deposit (1%) after a successful condo purchase has been negotiated. The balance exercise fee (4%) is held in the CVY account(usually by the Seller’s lawyer’s CVY account). Deposits must be paid (cheque or bank transfer) on the spot in exchange for the option to purchase. (Case by Case basis) Suppose you don’t fulfil the conditions of your offer (for example, you have a financing condition and cannot obtain financing during the conditional period because you are unable to exercise the option). In that case, the deposit shall be forfeited, and no way to make a recovery unless the parties re-negotiate for a new term and condition.
Day 24: Conditions – Conditions are part of an offer to purchase, allowing the Buyer time to complete their due diligence. Some non standard conditions that we are seeing them coming:
- Financing Condition –The standard option does not allow the Buyer to back out of a sale if they don’t obtain financing from the banks, so be prepared to be ready to commit before you place the 1% Option money.
- Home Inspection Condition – while these aren’t common in condo purchases, a home inspection condition allows the Buyer to view the property after the option and exercise fee have been settled. Home Sellers would usually want to avoid this as they will not be uncomfortable if there are any opinions on the condition of the house given that you are buying it as-it-is basis for resale condos.
Day 25: Offer process – Your agent will prepare the offer, including your initial offer price, terms and conditions. It will be valid for a specific time (we call this irrevocable period). Once you’ve signed off on it, your agent will present the offer to the Seller’s agent/Seller. The Seller can:
- Accept the offer as-is -They agree to the terms and conditions you’ve offered and sign it. Congratulations!
- Sign back the offer with different proposed terms (for example, at a higher asking price, with a different closing date, etc.). This now becomes a counter-offer from the Seller back to the Buyer. This is the most common scenario–usually, several back-and-forth negotiations take place with each side making concessions until, hopefully, a mutually agreeable contract is reached.
- Decline the offer: If your offer is entirely unacceptable to the Seller, they can decline it–no negotiation, no anything. We’ve seen Sellers reject low-ball first offers and offers decline mid-negotiation. So starting the offer at a fair and reasonable price may be good to avoid such scenarios.
Day 26: Bidding wars – If there’s more than one offer on the condo simultaneously, you’re in a multiple-offer situation, more commonly known as a bidding war. You might be surprised that it is still possible to encounter this Bidding war in any market. Hence it will be important for you not to get too complacent. An experienced agent will advise you on the approach and strategy required to buy the condo.
Day 27: Deal Done– When we refer to ‘Signed Option to Purchase is Secured’, we mean the vendor (Sellers) has signed the option to purchase, and it is a non-retractable offer made by them by granting you the rights to purchase the property.
Day 28: Follow through with the Sales Process! Send the signed OTP to your banker to process the loan application. You should not fret as you have already approved your indicative loan size. Whether buying took you five days, 30 days or six months, it’s time to celebrate. You have come from a far journey to get your dream home.
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