A Guide to Buying Resale Condos

1. WORK OUT YOUR BUDGET

When purchasing a resale condo and taking a first property loan, you would need fork out 5% in cash and another 20% in cash and/ or CPF. You can then take a 75% Loan -to -Value (LTV) bank loan to finance the rest of the purchase.

For Loan tenures exceeding 30 years or beyond the borrower's age of 65 years, LTV is 55% ,

cash 10% and cash/CPF 35%

If you are taking a second property loan, LTV is 45% , cash 25% and cash/CPF 30%

Don't forget to add Buyer Stamp Duty (BSD) and Additional Buyer Stamp Duty (ABSD) if applicable. And the cost of engaging a lawyer.

Your bankers will also check your Total Debt Servicing Ratio (TDSR) or the maximum amount you pay in monthly instalments for all your existing loans including house loan, car loan, personal loans to make sure it does not exceed 60%. before they disburse the loan.

2. CONSIDER YOUR REQUIREMENTS

Once you have worked out your budget, its time to consider your other requirements. It may vary according to your family needs and situation.

Own Stay or Investment

If you are buying to stay then consider your own needs. If buying for investment then think in terms of what your potential tenants would want and whether the unit will bring in the profits you desire.

Freehold or Leasehold

In a similar locale, freehold properties cost 15-20% more than leasehold properties. If you want your property ( especially landed ones) to be passed down generations, then go for freehold. If not, leasehold properties.are just as good and both can have en-bloc potential.

Location

Different districts in Singapore have different characteristics and price tags. The Core Central Region (CCR) comprises Districts 9,10,11 and downtown areas and are the most expensive. The Rest of Central Region (RCR) properties are the next in value while the Outside Central Region (OCR) properties are the most affordable. Do also consider if you need to stay near your parents or your children's school.

Proximity to MRT/ Accessibility

If you intend to take public transport often, then it would be wise to find a place that is near to an MRT station or at least accessible with bus stops and choice of buses to your most travelled to destinations. Proximity to MRT will also render your property more tenantable if you intend to rent it out.

Schools and Amenities

If you have school going children then you may want to stay near their school. Amenities such as market, supermarket, shopping malls , eateries, medical clinics etc in the vicinity would be a plus point.

Upcoming Growth Potential

If there are plots of land in the surrounding which are marked for residential use but not yet released by the government for sale, then there is a likelihood that more condos will will built there in future and as land price increases in future so will the price of the new launch and consequently all the properties in the vicinity will also enjoy an uptick in pricing.

3. Browse through Property Portals, View and Select Your Property

Once you have considered all your requirements, it is time to look for your dream property. You can either do it yourself or engage a real estate agent to help you.

Property portals such as PropertyGuru and 99.co are where the majority of property listings are. You can easily contact the agents who are marketing the property to arrange for a viewing

4. Sign the Option-To-Purchase (OTP)

After viewing a number of properties, you probably have a good idea of which one best fits your requirements. Before you decide to sign on the dotted line, do get in touch with your banker to get a In-Principal-Approval(IPA) for Bank Loan. You'll also have to engage a conveyancing lawyer who will make sure the property title is properly transferred to your name.

5. Exercise the Option

After you sign the OTP and paid the 1% deposit, you will typically have 14 days to exercise the option. During these 14 days, the seller is not allowed to accept any other offers. You will also have the option of not continuing the sale but your deposit will be forfeited.

If you decide to exercise the option, you will normally go to the seller's lawyers office to pay the balance 4% cash and 20% cash/CPF together with the 75% loan. Buyer's Stamp Duty (BSD) and Additional Buyers Stamp Duty (ABSD) ( if applicable) is also due within 14 days.

6. Wait for Completion

All that is left is to wait 10-12 weeks for completion where the lawyers will get to work to settle any outstanding loans, CPF balance transfers and checks on the title. Meanwhile you can make arrangements to move out of your current home and look for renovation contractors ( if required) for your new property.