A Step By Step Process To Buying A New Launch Condo (Part 1)

Step 1: Falling in Love with Your New Home ❤️

It all starts with a visit to the show flat. Picture this: sleek countertops, stylish finishes, and an incredible view! You explore the space, find “the one,” and decide, yes, this is it! 🏠

To lock in your choice, you’ll need to pay a 5% booking fee. For a $2 million condo, that’s $100,000. This needs to be in the form of a Cashier’s Order or cheque payable to the developer. You’ll also get a document called Property Details Information (PDI), which tells you everything you need to know about your unit – like the layout, size, and special features.

Quick Tip: Double-check the details before you sign the PDI. Make sure everything matches your dream home vision!

Step 2: Getting the Option to Purchase (OTP) ✍️

After you pay the booking fee, the developer will issue an Option to Purchase (OTP). This is a big deal because it’s like the official “Yes, we want you to buy this place!” moment.

Now, take that OTP and send it over to your banker as soon as possible. This way, they can start preparing your bank loan while you plan your next steps.

Step 3: Signing the Sales & Purchase (S&P) Agreement 📑

Within a couple of weeks, the developer will give you the Sales & Purchase (S&P) Agreement. You have three weeks to review, sign, and return it. Once you sign, it’s a done deal – the condo is officially yours! 🥳

But here’s a little secret: if you change your mind before signing the S&P, you can back out. Simply return the unsigned S&P to the developer’s lawyer, and you’ll get back 3.75% of the 5% booking fee. It’s like a safety net if you need to rethink the purchase.

Step 4: Time to Pay Stamp Duty 💰

Congratulations! You’ve signed the S&P, and now it’s time for the Buyer’s Stamp Duty (BSD). For a $2 million condo, the BSD is $69,600. If you’re a Singaporean buying your first property, there’s no Additional Buyer’s Stamp Duty (ABSD) – hooray! 🎉

Make sure to pay the stamp duty within two weeks of signing the S&P. It’s one of the key steps to securing your new home.

Step 5: The Down Payment & Loan Kick In 🏦

Two months after signing the S&P, you need to prepare for the next big payment: 15% of the condo price. That’s $300,000 for our example. This payment is part of your total down payment.

If your condo is still under construction (which is often the case with new launches), your bank loan won’t cover everything right away. Instead, the bank disburses the loan gradually as the building progresses. This means you only pay for each part of the construction as it’s completed – a bit like paying in installments for a new car as it’s being built.

Your New Launch Buying Timeline 🗓️

Here’s a quick summary to keep things simple:

1. Visit the Show Flat: Pick your favorite unit and pay the 5% booking fee.
2. Receive the OTP: Send it to your banker for loan processing.
3. Get the S&P Agreement: Sign it to seal the deal (or return it unsigned if you want to back out).
4. Pay Stamp Duty: Complete the BSD payment within two weeks.
5. Make the Down Payment: Get ready for the 15% down payment and let the bank handle the rest as the project progresses.

Pro Tips for First-Time Buyers 🌟

• Get Loan Pre-Approval: Talk to your banker early to get a pre-approved loan amount. This way, you’ll know exactly how much you can borrow, making the process smoother.
• Hire a Lawyer: A good property lawyer will help you understand all the paperwork and ensure you don’t miss any important details.
• Think About Future Value: If you’re buying for investment, consider the location, future developments, and potential rental demand.

Want More Guidance? 📖