Process of upgrading to a new launch condo

Why are new launches a hit in the real estate market? While this is not a new news, many savvy investors would have known the lucrative returns a new launch project can drive! Here are 2 main reasons:

1.New launch prices often start off low, and grow exponentially until they reach T.O.P. stage. This means that buyers can buy low, and sell high. 

2. The first owners of each unit buys the unit at developer prices - one of the lowest prices the unit sells for. As such, when that owner sells, they are almost guaranteed to make a profit, having bought it at such a low price. They are also able to control the selling price, as they have no need to raise the price further to make a profit.

With that, let’s walk-through the process and schedule of upgrading a new launch condo for a better understanding.

• Check the maximum home loan and property purchase price that you can comfortably afford based on your income, age and loan commitments. Total Debt Servicing Ratio (TDSR) is compulsory in order for the bank to provide the loan amount.

• Check on Loan-to-Value (LTV) Ratio – For your first housing loan, you can get up to 75% LTV ratio with a bank loan. However, the LTV is reduced when it comes to the second housing loan. At this juncture, you should also get an approval-in-principle (AIP) from a bank. Apart from your bank loan, you can also use your CPF funds to help pay for your home. 

• Armed with your budget, shortlist and start looking for new launch condos and make appointments to visit show flats. 

• Secure your new launch condo unit with a booking fee. The Option to Purchase (5% cash only) will be given to you at this point, and you’ll be deemed to have officially booked a unit. This means you’ll forfeit a portion of your option fee (usually 25%) if you abort the purchase. 

• Finalise the loan for the new launch condo. The bank which you are taking the loan from will issue you a Letter of Offer, a document containing the terms of the loan.

• If necessary, hire a solicitor to act in the purchase and take care of the conveyancing matters.

• Within 2 weeks, the developer will deliver the Sales & Purchase Agreement (S&P), following which you’ll have 3 weeks to sign and exercise the Option.

• If you do, you’ll have to pay the 20% exercise fee (i.e. the remainder of the downpayment). This will be due at the point of signing the S&P, or within 9 weeks from the date of the Option, whichever is later.

• You will also need to pay the Buyer’s Stamp Duty (BSD) (and ABSD if applicable) on the S&P within 2 weeks of signing.

• Within eight weeks from signing OTP, you will have to pay the rest of the 15% (cash or CPF) down payment

• Collect the keys to you new home 

Purchasing a property is not a stroll in the park. Not only do you have to make many considerations and decisions, you need to have the financial means and commitments of being able to fund your property purchase. 

Would you like to own one of your dream homes? Wait no more! We have the complete listing to share with you. We are Pamela & Shirley from Wonderhomes.sg! Click comment below or drop us a PM & we will get back to you soonest!