Singapore’s private resale housing market saw a surge in prices in May 2021, up by 0.9 percent. If you have been planning to purchase your new home, it can be an exciting step for you and your loved ones. However, from upfront payments to house loans, it can be a huge financial commitment if you are not fully prepared for it. You will also need to factor in conveyancing lawyer fees into your budget, regardless of the type of property you are buying.
What is conveyancing?
Conveyancing refers to the transfer of legal ownership in a property from one person to the other. There are often several transactions to fulfil throughout the conveyancing process, at which a property lawyer will act as a pivotal intermediary to represent your best interests when communicating with the relevant parties. This includes the Central Provident Fund (CPF), Housing & Development Board and Inland Revenue Authority of Singapore (IRAS).
Prior to the purchase
When looking for a residential property to buy, it is crucial to consider these important aspects:
- Eligibility: Only Singapore citizens are eligible to buy landed residential property, according to the Residential Property Act. While foreigners can purchase condominium units in Singapore, should they intend to buy landed properties such as terrace houses, they must seek the approval of the Controller of Residential Property before proceeding.
- Land/Floor Area: Take into account the size of the property’s land or floor area.
- Price: In addition to the cost of your property, keep in mind to include the buyer’s stamp duty and conveyancing fees payable upon signing the Agreement of Lease.
- Financing Options: There are a number of ways to make the necessary payments for your new home. While you can apply for loans through HDB or banks, you may also utilise your CPF Ordinary Account savings for your property purchase.
A conveyancing lawyer will assist you through your preliminary research by conducting a more thorough title search. This includes confirmation of the seller’s ownership of the property in Singapore, which is a critical step to ensure that the subsequent closing experience can proceed smoothly. Conducted via the Integrated Land Information Service (INLIS), this will give you a complete picture of your future property in advance before moving forward with the conveyancing transaction.
Stages of conveyancing when buying your property
1. Option to Purchase (OTP)
To reserve the property of your choice, you will need to sign a binding contract – also known as the Option to Purchase (OTP) – with the seller. This will grant you exclusive rights to purchase at an agreed-upon price. As the option has to be stamped within 14 days from the date of issue, your conveyancing lawyer will be responsible for requesting the amount from you to exercise the OTP promptly.
2. Lodge a caveat
Henceforth, you will be required to lodge a caveat on the property with the Singapore Land Authority (SLA) to inform other potential buyers of your interest in the property. You will have to pay a minimum 4% of the purchase price as requisite downpayment upon signing the Agreement for Lease.
This sum will be placed in a conveyancing account beforehand to pay the seller when the time comes. Your conveyancing lawyer will subsequently do his due diligence to submit the necessary documents to the relevant government bodies.
3. Final steps
Should you be applying for a mortgage or drawing your CPF funds, your conveyancing lawyer will manage all finance-related matters to ensure a successful completion. Thereafter, he will proceed to notify IRAS of your new ownership of the property upon key collection.
Own your new home at ease
There are many factors that will affect how long your property deal takes to complete. For these reasons, it is paramount to have a reliable property lawyer to finalise these complex transactions for a smooth property purchase. Ideally, you can expect the conveyancing process to be completed within a span of 12 weeks.
Get in touch with our expert conveyancing lawyers for more information today.