When it comes to selling your current home and buying your next one, managing your timeline well is so critical. Otherwise, you might end up having to literally pay for your mistakes.
I’m sure you don’t want to be slapped with a 17% Additional Buyer Stamp Duty or end up temporarily homeless because you didn’t manage the selling timeline well.
Don’t panic, this will not happen to you if you read this article to the very end. In this article, I’ll take you step by step through the selling timeline, so that you can feel completely in control throughout your selling process.
Step 1: Marketing your home
So let’s assume your home has been listed and is being marketed in the best way possible by your selected agent, and you’re getting interested buyers into your home who want to have a look at it. At some point, a buyer (or if you’re lucky more than one of them) decides they want to buy it, hurrah! So what happens next?
Step 2: Informal / Verbal Offer
At this stage, the buyer first makes an informal price offer. Some amount of negotiation might happen, so do consult closely with your agent to make sure that the offer is reasonable before you accept or reject it. He or she should be well equipped with the latest market data to competently assist you with negotiations.
Step 3: Option to purchase
Once you agree on the price and other terms, you will grant an Option to Purchase to the buyer. In return, the buyer pays you an option fee, usually 1% of the purchase price. You both now have 14 days to go to the next step, which is to exercise this option. With the OTP, the buyer is essentially reserving the property, but he does have 1% to lose if he changes his mind after this.
You, on the other hand are agreeing not to sell this property to anyone else during the option period of 14 days. Unless of course the option isn’t exercised after that.
Step 4: Exercise
At this stage, the buyer exercises his option. If he doesn’t, you get to keep the 1% he paid before and you can sell to anyone else you wish to.
Upon exercising, the buyer pays between 4-9% of the purchase price (to be decided jointly) and you enter into a sale and purchase agreement with them. This exercise fee will be held by the buyers lawyer until the sale is completed.
Now that the option is exercised, you are finally free to proceed on an OTP for your next home. You will no longer be subject to Additional Buyer Stamp Duty as the sale and purchase agreement for your current home has been signed.
Step 5: Completion
This is the finish line! This is where it all happens. Completion typically takes place between 8 to 10 weeks after the option is exercised. The buyer pays the remaining downpayment at the lawyer’s office and the rest of the purchase price will come from the mortgage loan he took. The keys are now handed over to the new owners. Congratulations!
And you’re done! By now, you’ve either already moved forward with the purchase of your new home or you’re close to it.
While there are some variables in timing, on the average, you could say that it would take a minimum of at least 11 weeks to sell your home from start to finish. This is assuming that marketing, viewings & informal offer all happened within 1 week! So, to be more realistic, plan for 3-6 months in total. Be open to contingencies because anything can happen that might affect a too-optimistic timeline.
What’s Next?
I hope that was helpful. But if you felt somewhat anxious just listening to all the steps, you’re not alone. In my next article, I’m will explain to you the role a good realtor can play when you engage one to accompany you through your selling process. And how having one on your team can really help ease the feeling of overwhelm and the highly charged emotions that can get the better of us when handling a home sale. It’s certainly something you don’t want to go through without some solid advice along the way. Believe me, our job goes well beyond just to help you list on property portals, coordinate viewing and file paperwork.
Read the article here: Why You Need a Realtor To Help You Sell Your Home In Singapore!
If you have any questions for me, let’s talk!
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Talk to you soon!