The Most Complete Guide to Buying a Property in Singapore

This is a comprehensive guide that breaks down the seemingly complex property buying journey into easy-to-understand steps. It also helps you gain clarity on the factors to consider for making better decisions at each stage.

There are 6 main stages to buying a property in Singapore:

Stage 1 - Planning Stage 2 - Shortlisting Stage 3 - Viewing Stage 4 - Making Offer Stage 5 - Legal Sales Procedure Stage 6 - Handover

Stage 1: Planning

You can work through 5 steps of assessments to plan for your property purchase.

Assessment Step 1: Eligibility

At the very first step of planning for your property purchase, get to know the types of property that you are eligible to buy.

There are two main factors that affect your eligibility to buy a property in Singapore:

• Age

• Residency Status

Minimum Age

The first requirement to buy a property in Singapore is passing the minimum age of 21 years old.

If you’re intending to buy property for your child who is younger than 21 years old, then you can consider buying a property in trust for him or her. Buying in trust requires that you pay the full property price in cash, without taking any housing loan.

Residency Status

The second factor that affects what property you can buy, is your residency status in Singapore.

For buying properties in Singapore, your residency status is based on three categories:

• Singapore Citizen (Holding a pink NRIC)

• Singapore Permanent Resident (Holding a blue NRIC)

• Foreigner (Anyone who is not a Singapore Citizen)

Singapore Citizens

Singapore citizens can buy:

1. New and resale Housing & Development Board (HDB) flats

2. New and resale Executive Condominiums (EC)

3. Condominiums

4. Private Apartments

5. Houses (also known as landed properties)

For buying new HDB flats and EC, you must be forming a valid family nucleus. For more details, please refer to the eligibility conditions for buying new HDB flats and EC.

For buying resale HDB flats, please refer to the eligibility conditions for buying resale HDB flats.

Singapore Permanent Residents

Singapore permanent residents (SPR) can buy:

1. Resale HDB flats,

2. Resale EC from its 6th year onwards

3. Condominiums

4. Private Apartments

5. SPR interested in buying landed properties may refer to this Singapore Land Authority link for more details.

To buy resale HDB flats, SPR must have attained SPR status for at least 3 years before they are eligible. Please refer to the eligibility conditions for buying resale HDB flats.

Foreigners

Foreigners who are not SPR can buy:

1. Resale EC from its 11th year onwards

2. Condominiums

3. Private Apartments

4. Foreigners interested in buying landed properties may refer to this Singapore Land Authority link for more details.

Assessment Step 2: Needs

Why do you want to buy a property?

Is it a decision born out of your need for bigger space? Is it a part of your family planning? Is it to move nearer to your workplace or your child’s future school? Or do you simply want to make more money from the property investment?

These housing needs can be translated into specific property requirements such as location, size, number of bedrooms, expected rental yield and projected capital gain.

Listing out your property requirements helps you to stay focused on finding a property that meets your needs and to save time during the shortlisting process.

Assessment Step 3: Affordability

Singapore may be a small city but visiting every available property can take you years. The price range is also very wide. Private properties in Singapore can be as cheap as $600,000 and as expensive as $40,000,000.

Knowing exactly how much you can afford will save a lot of time because you can focus on the properties within your chosen price range.

How much can the bank lend you?

The first step to finding out how much you can afford is to have free consultation with a banker. After assessing your financial situation, the banker can give you figure that the bank is willing to lend you for.

This figure is known as in-principle-approval (IPA), approval-in-principle (AIP) or pre-approval. It is usually valid for a period between 30 days and 90 days. You can obtain multiple IPA from different bankers for free before finally choosing to go with one.

Getting this IPA figure is important because it is the basis of any potential property purchase calculations. The loan quantum defines the upper limit of your purchase price, and the interest rates determines the monthly mortgage payments.

You don’t have to take the maximum loan that the bank is willing to lend.

And you should only buy properties within your affordability.

3-3-5 Affordability Rule

A commonly used affordability rule to buy properties is the 3-3-5 rule.

It means that you should be able to pay 30% of the purchase price upfront in cash, the monthly mortgage payments should only be up to 30% of your monthly income, and the purchase price should be up to a maximum of 5 times your annual income.

Keeping to the 3-3-5 rule helps you afford the property comfortably with lesser financial stress.

And this rule is helpful whether you are buying a property for your own usage or for investment.

Singapore Housing Loan Rules

This rule also happens to be in line with Monetary Authority of Singapore’s (MAS) rule of mortgage servicing ratio (MSR) imposed on HDB flat and EC buyers. MSR restricts the buyers’ monthly mortgage payments to a limit of 30% of their monthly income.

For buying private properties, the MAS has a rule called Total Debt Servicing Ratio (TDSR). TDSR restricts buyers’ total monthly debt obligations to a maximum of 60% of their monthly income.

There is also a loan-to-value (LTV) limit imposed based on various factors such as buyer’s age and number of properties owned.

To read the details of MSR, TDSR and LTV, please visit MAS’s explainer on housing loan rules.

Other fees related to buying a property in Singapore includes the Buyer’s Stamp Duty, Additional Buyer’s Stamp Duty, Legal Fees, and Property Agency Fees.

Central Provident Fund

Central Provident Fund (CPF) Ordinary Account (OA) savings can be used for

• Down payment of property

• Housing loan repayment

• Stamp duty

• Property legal fees

• House Construction Loan repayment

• Private vacant land purchase

• HDB Home Protection Scheme premiums

However, there is an important issue that home buyers intending to use CPF for property purchase should take note.

CPF Refund and Accrued Interest

Funds in CPF OA accumulates interest at a rate of 2.5%. When you withdraw the funds in the CPF OA for property related fees, the withdrawal amount stops accumulating interest. And when you eventually sell your property, you must refund the amount of CPF withdrawn along with the interest that it was supposed to gain while idling in your CPF OA. This interest to be refunded is called accrued interest.

When you use CPF OA for your property purchase, not only does the withdrawn amount not gain the 2.5% interest, but you also must come up with the 2.5% interest yourself when paying back to the CPF OA.

This means while you may have to rely on CPF funds initially to make the property purchase, it is a smarter move to make voluntary refunds and use cash to pay your mortgage loan whenever possible. This way you can continue to gain more interest in the CPF OA and optimise your wealth growth.

Assessment Step 4: Lifestyle

Different property types bring with them a different living experience. Read on to learn more about the lifestyles that HDB flats, condominiums and landed properties offer.

HDB Flats

As Singapore’s public housing, HDB flats enjoy a reputation of being more spacious and affordable than newer condominiums and apartments. More HDB flats are now increasingly connected to public transport bus stops and MRT stations by sheltered walkways. Eateries, supermarkets, and amenities are also within walking distances. This means that most people staying in HDB flats can enjoy a high level of accessibility, choice, and convenience.

Condominiums

Condominiums are private apartments with facilities. The types of facilities, design and landscaping within the compound define the lifestyle experience one gets when staying in the condominium. 50m swimming pool, gymnasium, sky pool, sky deck, jacuzzi, barbecue pits and tennis courts are examples of facilities highly sought after.

There are well designed sheltered walkways within the condominium compound to shield residents from sun and rain, but usually you can’t find any outside the compound that connect to bus stops. This is a drawback to most residents who don’t drive because raining is quite frequent in Singapore.

Many residents in condominiums form group buy communities to order things like groceries, carpentry work and food as a big group to enjoy discounted rates.

Landed Properties

Landed properties are properties attached to the land you buy. Many people view landed properties as the most prestigious form of properties in Singapore, with Good Class Bungalows representing the highest end of the property market in Singapore. Buyers of landed properties are automatically conferred a status of being successful in their businesses or careers.

Most buyers of landed properties have cars. And so, walking distances to nearest public transport are usually on the higher side.

Apart from that, there are many advantages to owning a landed property.

The most obvious one is that you can design your own living experience by rebuilding the property to have it look the way you want, subjected to building regulations.

Most landed properties are spacious. And you can construct your own exclusive swimming pool and little gardens.

Write down the lifestyle that you want

Make a list of essential and non-essential factors that you care about. If you love nature, maybe proximity to nature parks is something that you want in your property. Or perhaps you are someone who must swim daily, then swimming pool is at the top of your list.

Assessment Step 5: Progression

Buying a property in Singapore is a big commitment because it is easily the most expensive purchase in your life. That is why most people want to make profits and avoid losses while meeting their housing needs when buying properties in Singapore.

Let’s visit the basics for a moment.

A residential property is a shelter. And it can only be a shelter.

It can be your home as a shelter for you and your family, or it can be rented out as another person’s home.

The property is an investment only when it generates positive cash flow, or when it is sold at a selling price higher than the costs of acquiring and maintaining the property.

In the case of a residential property, the only source of cash flow is rental income.

If you use the property as your home, and you do not collect rent, then the only way for it to make more money is when you sell it at a price that is higher than your total cost of buying and maintaining the property. We call this capital gain.

And Singapore currently has no capital gains tax, which means you get to enjoy most of your property’s capital appreciation.

There are factors that help us identify properties that are more likely to appreciate in price, but no one can guarantee that it will happen.

Capital gain is uncertain. No one can tell the future of the property market because it can be affected by too many unpredictable factors.

The government can implement new cooling measures. There is a possibility of trade disagreements causing economy downturn. The stock market can crash and cause many people to lose their hard-earned wealth. Or natural disasters can strike and cause massive damage and disruption.

Also, no one can know for sure whether someone will come along and pay you the higher price that you want to sell your property for.

But one thing is certain.

For those who plan to stay in the property for decades without intention of selling or renting, your property is not an investment asset. Instead, it is a liability because you must pay monthly mortgage, maintenance fees and property taxes, resulting in negative cash flows. Even if your property value appreciates, it means nothing if you don’t sell it to cash out.

Property purchase can be a form of savings plan. You may have heard of the term asset progression planning or property wealth planning. They refer to the same concept of preserving and growing your wealth through carefully planned property purchases and sales. And it has worked well for many folks.

So, a property can be an investment asset, a liability or a savings plan depending on the actions you take with the property.

When planned and executed properly, your property purchase can help grow your wealth and enable a progression towards the next property class.

Stage 2: Shortlisting

Having gone through the planning stage, you should have a clear idea of the property features to look out for.

But before you run off going on viewings, you need to shortlist the properties.

After the viewings, you can then refine the list further to a few final choices for making the offer.

There are people who choose not to have a clear search brief before going on property viewings. And they are the ones most likely to find property viewings both tiring and time-consuming.

Here’s how you can be laser-focused and shortlist properties that are worth your time going down to view.

Prepare a checklist of requirements and identify the ones that matter most to you.

For most people, price is the most important factor, followed by number of bedrooms, and then location.

Here’s a sample list of requirements that you can follow or add on based on your needs.

1. Price Range

Having obtained IPAs from bankers, you have a clear idea of the upper limit of your price range. By keeping within your price range, you won’t encounter disappointment by visiting a property that you like only to find out that you can’t afford it.

2. Number of Bedrooms

This is an extremely important factor to consider because your home must accommodate your current and future family size. If you have plans to increase your family size, then you should put the number of bedrooms as one of your top priorities.

3. Location

It could be proximity to your workplace, MRT station, nature park, or schools. Think about how far you’re willing to travel by walk or by car to a particular location from your home on a regular basis.

4. Size

Newer apartments have more expensive price per square foot, and the developers in Singapore are keeping them affordable by reducing the apartment sizes. This results in many newer bedrooms not being able to accommodate anything more than a queen size bed.

If you prefer a larger sized unit, you may have to either go for older apartments or pay a larger premium for new apartments.

5. Property Type

If your price range allows, you may have to decide which property type to go for. Your choice of property type is closely linked to your affordability and choice of lifestyle.

6. Floor Level

Some people like to stay on high floors, while others enjoy staying on lower floors.

Higher floors come with higher price tags because more people like staying on higher floors.

To these people, higher floors mean better views, more natural winds, lower noise levels and lesser insects.

But higher floors can also mean longer waiting time for lifts, and when lifts break down they must climb many steps of stairs.

There are those who value staying on lower floors because they’re often more affordable. And they can simply take the stairs instead of waiting for lifts.

7. Direction of Facing

In Singapore, some people want properties with no West sun because it gets very warm in the afternoon. Others want properties without East sun because they don’t like the sun to wake them up in the morning.

And then there are those who like to have either East sun or West sun because they like to have sunshine for their plants or laundry.

Finally, there are also people who believe strongly in Feng Shui and hence will want the facings to match the Feng Shui guidelines.

8. Amenities

Consider the amenities that your family regularly need to visit. Things like supermarkets, library, salons, nature parks, swimming pools, shopping malls, and proximity to schools.

9. Facilities

If you’re getting a condominium, then you may have to care about what facilities matter to you. Because there is no point in paying high maintenance fees every month when you don’t have a need for any facilities.

10. Timeline

Timeline is a very important factor that many home buyers overlook, but a well-planned timeline can help you save thousands of dollars.

The typical legal sales process of a resale property takes between 8 and 12 weeks. And renovation usually takes up another 8 to 12 weeks. That means it can take between 4 months and 6 months from starting the legal sales process to moving into your new home.

Timing it wrongly can result in you having to spend more money getting a temporary accommodation. And it is hard to find owners willing to rent out their properties for just 3 to 4 months.

Begin Shortlisting

With your list prepared, you are now ready to hop onto platforms like 99.co, EdgeProp.sg, and PropertyGuru.com to start your shortlisting process.

From here, it’s about contacting the listing agents to arrange for viewings at your shortlisted properties.

Stage 3: Touring

View the properties and discover details in person.

Viewing is one of the most important steps that you cannot skip.

Because photos and videos can be deceiving.

The property photos and videos you see online are often created to make the properties look attractive during the marketing process.

Therefore, you must be physically present to discover details that cannot be captured by the photos and videos.

Here’s a list of essential points to pay attention when viewing resale properties:

1. Surroundings

The journey to the property, the roads leading into the car park, the walkways from the nearest public transport, the noise level, and activities in the immediate surroundings. Make sure you are okay with the surroundings.

2. Neighbours

Good neighbours can make your life more pleasant, and bad neighbours can create a living hell. If possible, get a chance to speak with them and have a gut feel of who they’re like. It won’t be entirely accurate, but at least you get a rough idea of the kind of relationships you can build with them if you stay here.

3. Smells

Take note of the smell both outside and inside of the property. Are there musty mouldy smells that suggest fungal growth or water leakage? Check every built-in cabinet for signs of unwanted infestations.

4. Paint

Check whether the paint in the ceiling and the wall near ceiling is flaking or has. Water seepage and leakage issues can be tough and costly to fix.

5. Renovation

Whether you intend to do your own renovation of the property after purchase, you should find out when the last renovation was done. Most people will not spend a bomb on renovation just for selling. If it’s an old property and the renovation was done just shortly before putting the property on the market, then there’s a high chance that the seller is trying to conceal certain issues.

On the other hand, if the renovation is quite some time ago, then it’s likely to be a genuine renovation for the seller’s own enjoyment. In this case, you will check the conditions of the renovation to see if you’re going to keep it or do your own renovation.

Make sure to check the power sockets to see if rewiring is needed.

Check that doors, cabinets, and windows can open and close properly.

Turn on taps to see if water can flow through the sinks and pipes smoothly.

If there is built-in oven, be sure to ask owner to pre-heat oven during your visit so that you can check its condition, because repairing build-in oven out of warranty can be expensive.

Lastly, ask whether the owners had any pets. Pet urine can seep deep beneath the surface of some materials. You can’t see them, but when the weather gets warm, the smell released can be overwhelming. Sometimes, a whole house thorough cleaning is required to resolve smell issues.

6. Reason for Selling

Find out why the owner is selling the property. It may be personal reasons, but it may also be due to undesirable conditions such as loan shark harassments or constantly resurfacing property issues that are unfixable.

7. Minimum Selling Price

Most properties are advertised at a higher price so that there is room for price negotiation.

But sometimes, the minimum selling price may be too high to begin with. And the landlord cannot go any lower because of other financial related issues.

Be sure to ask the agent about this, so that you won’t waste time trying to negotiate a property price that is mission impossible.

Stage 4: Making Offer

Giving a price that both sides agree with.

It’s natural that all buyers want to buy low because they can then make profit more easily when they sell higher.

And sellers naturally want to sell higher so that they can maximise their profit gain.

Eventually when it’s your turn to sell your property, you’ll also want to sell higher to make a profit.

But you’ll also be asking,

“What is the true market value of the property?”

That’s the magic question in the minds of all sellers and buyers.

Valuation firms mainly use the direct comparison approach to obtain a property valuation.

Direct comparison approach considers the recent transaction prices of similar properties in the process of arriving at a property value.

Each transaction price is a match of what a buyer is willing to pay and what a seller is willing to accept for the property transaction to go through.

So, when a valuation firm produces a property valuation, that’s the valuation firm’s opinion of what the property should be transacted at based on similar past transaction records.

But every buyer and seller are different.

Different in terms of their views, knowledge, financial ability and what they value.

Some think a property on higher floors should be more expensive because of better views but others think living on a higher floor means taking a bigger risk in the event of fire break out.

Some think West sun is a negative aspect because it makes the property very hot and stuffy in the afternoon, but others think West sun is good for getting the much needed sunshine for laundry, plants and maybe a suntan.

In some cases, the seller has an urgent need to sell the property, so he sells the property at a much lower price than other sellers. In some cases, a seller believes he should only sell the property if he can gain a certain amount of profit, so he holds on to a high price indefinitely until he meets a willing buyer.

There are no right or wrong prices for properties.

Only willing seller, and willing buyer.

When a property developer is launching a new project, they set the price according to the profit margin they hope to gain and the value they think it brings to the buyers.

The market response to their project can turn out good or bad, but there is no right or wrong to the way they price their projects.

Similarly, you should make an offer based on your understanding of similar transactions and your comfort level in paying for a property.

Note that you can only take a loan amount based on bank’s valuation of the property.

This means that if you agree to buy a property at $1.5m but the bank’s valuation is $1.4m, then the bank is only willing to grant you a loan based on the valuation price of $1.4m.

You’re highly recommended to make an offer based on the 3-3-5 affordability rule.

It means an offer where you can

1. Comfortably pay up to 30% of purchase price in cash and take the remaining 70% as loan.

2. Have a monthly mortgage amount up to 30% of your monthly income.

3. And keep the purchase price to a maximum of 5 times your annual income.

Stage 5: Legal Sales Procedure

Steps to Buying Resale HDB Flat

1. Register Intent to Buy at HDB Resale Portal.

Here's the link to HDB Resale Portal.

2. Obtain loan pre-approval.

Either get a HDB Loan Eligibility (HLE) Letter at HLE Application if you intend to take a HDB loan, or obtain a pre-approval from bankers if you intend to take a bank loan.

HLE is valid for 6 months while bank loans pre-approvals in Singapore are valid for between 30 and 90 days.

3. Search for a suitable property.

Find properties on property platforms and classified ads or engage a property agent to help you in this.

4. Pay option fee and obtain Option to Purchase (OTP) from a seller.

The option fee can be from $1 to $1000.

The seller can download a copy of the OTP from the HDB Resale Portal after registering Intent to Sell.

After being granted an OTP, you will have 21 days to think over and decide whether to proceed with the purchase.

During this period, the seller cannot grant another OTP to other buyers.

5. Request for HDB Valuation.

You must request for HDB valuation of the flat on the next working day after receiving the OTP.

Each Request for Value has a processing fee of $120 inclusive of GST and the property valuation will be valid for 3 months.

6. Pay deposit to exercise the OTP.

The sum of this deposit and the previously paid option fee must not exceed $5000.

Or you can let the OTP expire if you do not wish to proceed with purchase and your option fee will be forfeited to the seller.

7. Appoint law firm if you are taking bank loan.

HDB will have lawyer for you if you are taking HDB housing loan.

8. Submit Resale Application at HDB Resale Portal.

After you exercise the OTP, both you and the seller must login to HDB Resale Portal and submit a Resale Application within 7 days of each other.

It’s recommended that both of you submit the Resale Application within 3 days from the day you exercise OTP.

Buyers and sellers must each pay an administrative fee of $40 if flat type is 2-room or smaller, and $80 if flat type is 3-room or bigger.

You will need to submit your solicitor’s name and address in the Resale Application.

9. HDB Acceptance of Resale Application.

Upon receiving your Resale Application, HDB will verify the information. If everything is good, they will notify you and the seller of HDB’s acceptance of your Resale Application via SMS. You can expect this SMS in around 10 working days from the date where the second party submitted the Resale Application.

10. Endorse Resale Documents Online.

Within 6 days from receiving the SMS notification on HDB Acceptance of Resale Application, you’ll need to endorse the resale documents in the Resale Portal.

On endorsing the resale documents, you’ll need to pay caveat fees and title search fee.

The caveat fees are either $128.90 (if you are taking HDB housing loan) or $64.45 (if you are not taking HDB housing loan). The title search fee is $32.

So, you will either be paying $160.90 (with HDB housing loan) or $96.45 (without HDB housing loan) on endorsing the resale documents.

11. HDB Approval of Resale.

From endorsing resale documents and making the payment, you should be receiving the HDB Resale Approval within 1 week.

12. HDB Resale Completion.

HDB will send the notification via SMS for you to attend the Resale Completion Appointment in person. It should take about 8 weeks from the date of HDB Acceptance of Resale Application to Resale Completion.

You must make payment of all your existing conveyance fees and property tax up to the date of sales completion. Remember to bring along the receipts for the Resale Completion.

For more details on the terms and conditions, please refer to the HDB Resale Procedure maintained and updated by HDB.

Steps to Buying Resale Private Property

1. Obtain bank loan pre-approval.

This should be your first step to know the maximum property price you can go for. Without this, you can’t make any offer because you won’t know whether you are able to obtain a loan for the price. Some buyers have lost their deposits for their OTP because they’re unable to secure a loan for the offer they made.

2. Search for a suitable property.

Explore properties on property platforms and classified ads or engage a property agent to help you in this.

3. Pay Option Fee and receive Option to Purchase (OTP) from a seller.

The Option Fee for buying a private property is usually 1% of the agreed purchase price.

When you pay the Option Fee, the seller will grant you an OTP that is valid for 14 days or for a duration that you mutually agree upon. Sometimes you may need a longer validity date to facilitate and time concurrent property transactions.

4. Appoint law firm.

The law firm will help you with the calculations of payments and explain to you the subsequent steps to take for successful sales completion.

5. Exercise the Option to Purchase by paying remaining Deposit.

You will exercise the OTP at a law firm and pay the deposit equivalent to 4% of the purchase price.

6. Pay Buyer’s Stamp Duty

Within 2 weeks from the date of exercising the OTP, you must pay Buyer’s Stamp Duty. You also must pay Additional Buyer’s Stamp Duty if this purchase is not your only property.

7. Sales Completion

The completion of the property purchase will usually take place between 8 and 12 weeks after exercising the OTP. The actual date of completion is mutually agreed upon by you and the seller, usually dependent on the processing time needed for your law firms to drawdown funds.

Steps to Buying a New Launch Property

1. Obtain bank loan pre-approval.

The first step to buying a new launch property is also to get pre-approvals from banks, so that you know how much you can afford.

2. Shortlist the projects.

You can find information on the latest projects by searching online or by having a consultation with a property agent.

3. Tour the show flats.

Whether you made an appointment online or walk-in to a show flat, you’ll be served by a property agent appointed by the developer.

4. Book a unit by paying the booking fee to get the Option to Purchase (OTP) from developer.

The booking fee required is 5% of the purchase price in cash.

5. Confirm bank loan and hire a conveyancing lawyer

6. Sales & Purchase Agreement (S&P) Sent to appointed law firm

Within 2 weeks, from the day you booked the unit (booking day), the developer will send the S&P to your appointed law firm.

7. Exercise Option and sign S&P at law firm

Within 3 weeks from your law firm receiving the S&P, you will endorse and sign the S&P at the law firm’s office.

8. Pay Stamp Duty

You must pay buyer’s stamp duty within 2 weeks from exercising the S&P. If you’ll possess two or more properties in your name after this purchase, then you also must pay additional buyer’s stamp duty.

9. Pay Balance of 20%

Within 8 weeks from booking day, you must make the balance payment equivalent to 20% of the purchase price in either cash or CPF.

10. Progressive Payment

From here, the developer will notify you when payment is required upon each stage of project completion.

Stage 6: Handover

Beyond receiving keys to your new home, discovering defects is the real key to peace of mind.

New Property

For newly completed properties, developers will grant a 1 year defects liability period where they will rectify any defects uncovered.

Note that the 1 year defects liability period starts from the date when Temporary Occupation Period (TOP) for the property is announced.

This means that it starts from the date of Notice for Vacant Possession and not the date when buyers collect the keys for their units.

Defects are mainly categorised into two types: patent defects and latent defects.

Patent defects refer to those defects that are obvious to the buyer and can be discovered with reasonable inspection of the property.

Latent defects are defects that the buyers cannot be expected to identify based with reasonable inspection of the property. Under the caveat emptor principle, a seller does not have a duty to disclose these latent defects even if he is aware. This means that a seller does not need to automatically tell you about the latent defects. But when asked, a seller will have a duty to answer truthfully, or he will be liable for misrepresentation.

Savvy property buyers today understand that it is best to hire experts to carry out defects’ inspection on their behalf. When untrained buyers carry out defects inspections themselves, latent defects are likely left undiscovered. And these defects may lead to more serious problems outside of the 1 year defects liability period. Rectifying these problems can sometimes be very costly.

Resale Property

Many Option to Purchase and Sales & Purchase agreements for resale properties in Singapore have the “as is where is” clause. It deems the buyer to have inspected the property before signing the agreement and is satisfied with the condition of the property.

This shifts the responsibility for conducting proper checks and inspections of the property from the seller to the buyer. It also means that the law will not be able to help you from a bad deal because you were responsible for inspecting the property for defects before signing the agreement.

If the undiscovered defects lead to an overwhelming repair cost that is beyond your budget, you are also responsible for the problem.

There are two ways to deal with this if you must buy the property with the “as is where is” clause.

One way is to engage experts to conduct a thorough defects inspection, even before you pay the Option Fee to get the Option to Purchase.

The other way is to ask the seller about any known defects in the property. If he hides information about the known defects, then he may be liable for misrepresentation, and you may be able to claim against the seller based on this.