Buying a condo these days mean paying a hefty price tag. However, there is one cost-effective solution to owning a unit – choosing a new launch condo. With this, you get to avail of many discounts from the developers from early bird discounts to stamp duty reimbursements.
The only downside is waiting for three years before it will be built. If you have the time, it is wise to go for it and wait. But how do you go about buying a new launch condo? Here’s a simple guide to purchasing a new launch condo:
Sort your finances at the onset
While sorting finances is a pain, it is essential in your journey. Sorting out finances at the onset will help you find out how much you can actually afford to pay for your home. In the end, sorting finances will save you a lot of money and frustration.
You should consider the following when it comes to your finances:
- Get AIP (Approval-in-Principle): even if you think you are a good candidate for a huge loan, it will be the decision of the bank. This is the reason why you have to get AIP from a bank. This will give you a good idea of how much you will actually get when you apply for a loan in the future.
- Check CPF (Central Provident Fund): this is a savings plan for working Singaporeans and Permanent Residents. The best part is you can use CPF to help pay for your home.
- Think about miscellaneous fees and costs: you must know that you are legally bounded to pay at least 20% (5% Option Fee and 15% Exercise Fee) of the property price. Aside from the 20%, you should also include incidental costs like BSD (Buyer Stamp Duty), legal fees and many more.
- Consider ABSD (Additional Buyer Stamp Duty): as the name suggests, this is required in addition to BSD as a property market cooling measures. For Singapore citizens and Permanent Residents, ABSD can be up to 5%.
After sorting your budget, the next thing to do is to shop around. There are many prime locations around Singapore like One Pearl Bank Outram. At this point, you have to hire a property agent, who is helpful in guiding you through the process. With the property agent, there is no burden of researching.
Visit flat shows
Buyers are given the chance to visit the show flats of developers. This usually happens one to two weeks before the official date of a new launch condo. You should make the most of this opportunity.
Though there are no actual prices, if you are keen on buying, you can complete EOI (Expression of Intrest) form then hand it to the developer along with a blank check addressed to the developer’s account.
Finalise loan and hire a lawyer
If you are decided, you should approach the bank to finalise your loan. They should issue you a Letter of Offer. You need to hire a lawyer to deal with conveyancing.
You need to sign the Sales and Purchase Agreement. After its delivery, you have three weeks to sign it. If you do not, you have to pay the 15% Exercise Fee. You should also pay the BSD.