The most unappealing part of buying a condo isn’t having to stand in snaking queues in showflats (or to wait for an agent who has a habit of showing up late). Rather, it’s realising that you have to pay for the property that usually takes the thrill out of the whole affair. That’s why you should know all about condo payment schedules before you enjoy the home-hunting experience. Let this article fill you in:
New launch vs resale condos: the difference
Buying a condo unit typically falls in either of two categories:
- Buying a unit in a completed development (usually a resale, but could be unsold units directly from a developer)
- Buying a unit in an uncompleted development (usually a new launch unit bought directly from the developer, but can also be a sub-sale from a buyer)
There are a variety of factors that might push you towards one or the other. For example, you might not be willing to wait 3+ years for your unit to be constructed, or you want to purchase a unit in a development that’s already been completed (and can be inspected with your own eyes). The thing is that, while the payment schedules for the two types isn’t vastly different from each other, there are differences you should know.
Condo payment schedule of uncompleted developments
Let’s take the example of newlywed couple Eddie and Alexandra, who are both Singaporean Citizens and first-timer applicants with a combined income of $14,000/month, and CPF balance of $30,000.
They’re interested in purchasing a unit in a new development that hasn’t started construction yet, at a price of $1,000,000. To help process their transaction, they’ve engaged private legal counsel who have agreed to charge $3,500 for the entire purchase, and have obtained their valuation report at $350.
Since this would be their first bank home loan, they are entitled to up to 75 percent of the purchase price according to the loan-to-value (LTV) limit.
Here’s what their condo payment schedule would look like:
|
Fee payable / stage of work completed |
Approximate timeframe |
% purchase price of fees payable |
Amount payable |
Source of funds |
|
Exercising option |
– | 5% of purchase price
|
$50,000 |
Cash |
|
Sign S&P |
Within 3 weeks from delivery of S&P | – | – |
– |
|
Stamp duty |
Within 14 days from signing S&P |
1st $180,000: 1% 2nd $180,000: 2% Remainder of purchase price: 3% |
$24,600 |
Cash/CPF |
|
Downpayment |
Within 8 weeks from exercising option |
20% of purchase price |
$200,000 |
Cash/CPF |
|
Legal fees |
– | ~ $2500 – $4000 | $3,500 |
Cash/CPF |
|
Valuation fee |
– | ~ $350 – $500 | $350 |
Cash/CPF |
|
Foundation work |
~ 6 – 9 months from launch | 10% of purchase price |
$100,000 |
Cash/
Bank loan |
|
Reinforced concrete framework |
~ 6 – 9 months later | 10% of purchase price | $100,000 | |
|
Brick walls of unit |
~ 3 – 6 months later | 5% of purchase price | $50,000 | |
|
Ceiling of unit |
~ 3 – 6 months later | 5% of purchase price | $50,000 | |
|
Door & window frames in position, wiring, internal plastering & plumbing of unit |
~ 3 – 6 months later |
5% of purchase price | $50,000 | |
| Car park, roads & drains servicing the project |
~ 3 – 6 months later |
5% of purchase price |
$50,000 | |
| Notice of vacant possession | TOP date | 25% of purchase price | $250,000 | |
|
Legal completion date |
Date of legal completion/certificate of statutory completion | 15% of purchase price | $150,000 | |
| TOTAL: | $1,028,450 |
On the basis that they will be making use of the full 75 percent bank loan that they’re eligible for, their financial obligations would be as follows:
Bank Loan : $750,000
CPF : $30,000
Cash : $248,450 ($1,028,450 – $800,000 – $30,000)
Note: The booking fee of $50,000 needs to be paid entirely in cash, and cannot be supplemented using CPF or a bank loan.
Condo payment schedule for completed developments
Now let’s see how the finances work out if Eddie and Alexandria decide to buy a completed development instead.
| Fee payable / stage 0f work completed |
Approximate timeframe |
% purchase price of fees payable |
Amount payable |
Source of funds |
|
Grant of option |
– | 1% of purchase price | $10,000 |
Cash |
|
Exercise of option |
Within 14 days from grant of option | 4% of purchase price | $40,000 |
Cash |
|
Stamp duty |
Within 14 days from exercise of option |
1st $180,000: 1% 2nd $180,000: 2% Remainder of purchase price: 3% |
$24,600 |
Cash / CPF |
|
Legal fees |
– | ~ $2500 – $4000 | $3,500 |
Cash / CPF |
|
Valuation report fee |
– | ~ $350 – $500 | $350 |
Cash / CPF |
| Completion of sale & purchase at lawyer’s office | ~ 8 – 12 weeks from exercise of option | Balance payment (purchase price less booking fee and option fee) | $950,000 | Cash / Bank loan |
| TOTAL: | $1,028,450 |
On the basis that they will be making use of the full 75 percent bank loan that they’re eligible for, their financial obligations would be as follows:
Bank Loan : $750,000
CPF : $30,000
Cash : $248,450 ($1,028,450 – $800,000 – $30,000)
Again, the $50,000 in booking and option fees will need to be paid completely in cash; CPF funds and bank loans cannot be used.
[Recommended article: Property agent commission in Singapore: How much should I pay?]
Buying your first home or investment property? We’re here to help. Find out how to make your property purchase safe as, well, houses. Our panel of experts are ready to answer your questions, and provide clarity on any property issues.
Consult them at Property Investing for Non-Millionaires, on 25th May 2019, at the HDB Hub Auditorium (Toa Payoh). Tickets are just $20, and early birds get a 50 per cent discount.
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