Depending on how you take life, buying a condo can be either as easy as eating a pancake or as hard as cracking a seashell with your teeth. Some people do it quietly and never mention it; others make a big fuss and cry about it. But what is true is that the level of difficulty depends on your knowledge of the local real estate market.
So, here is a 5 step guide to buying condos in Singapore.
Get the right people for the job
Buying a condo is not like walking into a department store and picking up a product. You will need a real estate agent, a lawyer and a friend or two who knows something about condos. If you are taking a bank loan, the bank will assign you a lawyer. You can find a real estate agent from the Council of Estate Agents (CEA), which is the governing body for real estate agents in Singapore. Make sure to get good, honest and experienced people who can get the job done.
Go condo hunting
Do not just pick a condo from a website or a newspaper advertisement. Advertisements can be misleading. The photos are usually prettier than the real thing. Pull up your pants and go condo hunting with your real estate agent. Most new condominium complexes have a showflat, such as the Martin Modern showflat located in Martin Place, District 9. Visit the showflat and take a good look at it.
Hold it while you secure your financing
After you have made up your mind to buy a condo, get the owner (seller) to reserve it for you, which he will do for up to two weeks. You will be required to pay an option fee amounting to 1% of the price. After that, you will have one month to find the necessary capital and pay a second option fee of 4%. If you fail to do so, your first option fee may end up being forfeited. You will be allowed to take out a loan of up to 80% if it is it’s the first time you are buying a property and up to 50% if it is you have bought one or more properties in the past.
Make the down payment and settle the fees
Once you have paid the second option fee, you will be required to make down payment of 15% for your first property and 45% if it is your second property. You will also be required to pay Buyer’s Stamp Duty (BSD), real estate agent’s fee and lawyer’s fee. Make sure that you understand what total debt servicing ratio (TDSR) means. It means that you cannot spend more than 60% of your monthly income to service your debts. For executive condos, the cap is even less at 30%. You will be required to return your loan at a fixed monthly rate, which depends on the duration of your mortgage and the rate at which your bank charges interest.
Make sure the paperwork is in order before moving in
Once you have settled all your payments, you can collect the keys and move into your new condo. But before doing that, make sure that all the paperwork is in order. If your condo is still under construction, then you will have to wait until it is completed, which may take a year or two.
Knowing how to do things the right way makes life easy and helps save a lot of money. So, learn everything you need to know about buying condos before starting the process.