Property Purchase in Singapore

Property Purchase in Singapore cover

Buying a house and owning real estate in Singapore is an achievement that most Singaporeans want to achieve. There are public housing (HDB Flat) and private housing that are available in Singapore. However, no matter which housing type you choose, there are 5 important steps that you need to navigate to increase the chances to find the most suitable home.

1. Budget

Before you start house hunting, figuring out your budget is the most important and critical step that will save you time and disappointment down the road. Without proper knowledge of your budget, you are at risk to run into the situation of falling in love with a dream house that you cannot afford and therefore feeling disappointed. However, the worst scenario is not just feeling disappointed, but having to pay the monetary penalty if you signed the Option-to-Purchase (OTP) agreement and realize the bank cannot approve the required amount for your property purchase. The monetary penalty is the option fee that is 1% of the purchase price for the private property which is normally around 5 figures.

In order to avoid such a scenario, we advise our clients to the Approval-In-Principe (AIP) for their home loan from their preferred bank before their house hunt. AIP is an agreement with the bank to loan you a certain amount for your property purchase. No actual loan takes place for AIP, rather, it is just a guarantee that the bank will loan you a certain amount when you need it. AIP usually is valid for 30 to 90 days in Singapore depending on the bank.

After the knowledge of your home loan amount, the next step is to determine your budget by combining your current financial stand with your home loan. For private property, the Loan-To-Value is 75% of the purchase price or the property valuation whichever is lower. This means that you need to have the remaining 25% of the purchase price either in cash or CPF Ordinary Account (OA). Besides the property price, your budget must also include the stamp duty, legal fees, and agent fees.

Below is one simple example of how to determine your budget.

Alex and Joy are earning $6,000 and $5,000 respectively. Alex is 30 and Joy is 30 this year. They have a total of $200,000 in their CPF OA and they also have a total of $100,00 cash reserve for their new house.

Using our Max Home Loan Calculator, Alex and Joy’s maximum home loan is $1,347,305.

The total fund for Alex and Joy is $300,000 ($200,000 + $100,000)

Break Down

  1. Option fee 5% – $53,571
  2. Exercise fee 15% – $160,721
  3. Buyer Stamp Duty (BSD) $25,979
  4. Full payment – 5% + 75% (Home Loan) – $53,571 + $803,608
  5. Legal fee – $3,000~
  6. No agent fee for buying private property with Home N House


Although Alex and Joy can loan up to $1,347,305 for their property purchase, they can only comfortably afford to buy a $1,071,478 property with a Home Loan of $803,608 and $300,000 reserved for their new house.

Call our friendly consultant if you need assistance in determining your budget for your new property.

2. Needs vs Wants

After sorting out the budget, the next important step is to come out with a list of needs vs wants for your new house. This is an important list that will keep you in line with what you are looking for in your next property.

You must be clear that the needs in the list are deal-breaker and wants are just desired features that are good to have.

With the needs and wants clear define, it will be so much easier to proceed to the step which is to shortlist units for viewing.

Example of Needs vs Wants list:

Within 5-minute walk to MRT StationNo direct west sun
Within 1km from a certain schoolWet market nearby
Main door must face North-SouthNot facing the main road

3. Shortlisting units

After steps 1 and 2, we are ready for action. Shortlisting suitable units for viewing is the basic skill of any real estate agent.

At Home N House, we provide an additional step further, our consultant will prepare a report on each and individual unit regarding the unit valuation, recent transaction, surrounding amenities, and future development so that you can better understand the units.

4. Home Viewing

For home viewing with Home N House, it is very simple as we have already prepared all necessary information for you regarding the development and the unit.

Our consultant will also assist in taking down notes on the unit’s condition and other information from the owners or the seller’s agent.

These are important steps because rather than depend on memory and impression, we can better compare with other units with accurate data and information.

5. Closing

After you find a suitable unit, it is time to offer and negotiate the price and conditions for the sale of the unit.

Once the price and conditions are agreeable with both parties, agents from both parties will start to prepare the documents like Option-To-Purchase, to facilitate the transaction.

Below is the timeline for Private Resale:

Contact our experienced consultant for a smooth and hassle-free buying experience.

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