[Resale Condo Buying Process]

Unlike purchasing a new launch condominium, both the buyer and seller in a resale condo transaction are private individuals. As long as both parties agree to the contractual terms, the deal can proceed. Consequently, the resale condo buying process is not governed by standardised statutory rules like new launches, and buyers may encounter various unique scenarios. Generally, the resale condo purchasing timeline is much faster than buying an uncompleted project (BUC), typically taking 8 to 12 weeks to complete.

Step 1: Securing the Option to Purchase (OTP)

There is no standard statutory template for a resale condo OTP, but property agents will usually provide a standard, widely accepted industry template. Upon granting the OTP, the buyer must pay a 1% Option Fee to the seller on the spot via cash or cheque. The OTP officially takes effect only after the seller receives the 1% cash or when the cheque clears. Once effective, the seller is legally bound to sell the property at the agreed price and cannot back out or alter the terms.

The Option to Purchase typically comes with a standard 14-day validity period. During this window, the buyer can choose to exercise the OTP and proceed with the purchase according to the agreement. If the buyer decides not to proceed, the OTP will lapse, and the 1% Option Fee will be forfeited to the seller.

If the buyer requires a mortgage, they must apply for a bank loan using the OTP within these 14 days. Banks can grant a home loan of up to 80%.

In addition, if the buyer wishes to retain the seller's furniture and fittings, they can negotiate with the seller to include them in the sale, compiling a detailed inventory list to be attached to the OTP. Any other special conditions can also be negotiated and incorporated into the OTP as contractual terms.

Step 2: Exercising the Option to Purchase

Once the buyer commits to the purchase, they can sign to exercise the OTP and pay the 4% exercise fee. Within two weeks of exercising, the Buyer's Stamp Duty (BSD) and Additional Buyer's Stamp Duty (ABSD), if applicable, must be paid.

Step 3: Paying the Remaining Balance via Cash/CPF

The buyer's conveyancing lawyer will assist in completing all legal documentation to finalise the completion of the transaction.