Start with Research
Spend some time researching on the location, neighbourhood you want to live in, the commuting time to and from your work and what type of properties you think you might want and eligible for. The properties varies from Public Housing (HDB), Public-Private Hybrid (Executive Condominium), Private Residential Housing or Landed properties. These are different types of housing you may or may not be eligible depending on your citizenships, age, martial status and etc. With these information gathered, it will make your viewings a good start.
Determine your Budget and get the right mortgage
It is important to figure out your budget before you start looking for houses. You need to factor the cost of downpayment, legal fees, stamping fees, renovation costs and etc. Any form of affordability calculator tool offered in local bank web portal will allow you to calculate how much loan you can get based on Total Debt Servicing Ratio (TDSR). You will need to seek a mortgage broker and secure a bank loan to finance your purchase unless you plan to pay entirely in cash or CPF savings. Make sure the bank is able to lend you the balance, otherwise you will have to raise more cash.
Find a good Real Estate Agent
One of the most critical steps to buy property is to find an experienced property agent to represent you. Real estate agents are important partners when you’re buying properties as they will work to get you the best deal. Their knowledge of the home buying process, timeline navigating, negotiating skills, and familiarity with the area you want to live in can be extremely valuable. Besides, your agent will walk you through the entire process and arm you with the information you need to be a shrewd, well-informed buyer to negotiating and post move-in support.
Make an Offer and Negotiate
Before you made an competitive offer for the home you wanted, do a research on the comparable sales of the similar properties in the area and negotiate to your advantage. If it does not have comparable sales in its location for guidance, you might want to get some valuations done on it so you can be sure you are not getting ripped off. Banks offer free desktop valuations, but these can fluctuate greatly, so ask for at least two or three. Take a step back to logically look at all the things that matter before making your final offer.
Secure Option to Purchase
The utmost important document to buy a property is to secure a Option to Purchase (OTP) from seller or Sales & Purchase Agreement (S&P) from Developer. To obtain the OTP, you will pay an option fee, typically 1% of the purchase price, payable in cash. You should have already engaged a lawyer at this point, who will make sure you exercise the option in a timely fashion. During this 2 weeks timeframe, you would have your Approval-In-Principle letter ready by the mortgage bank, a loan amount they have agreed to loan you for the purchase of the property.
Wait for completion
Leave it to your solicitor for the completion of the sale, which will be completed in around 10 to 12 weeks time usually (agreement between the vendor and purchaser). Your solicitor will ensure all documents, money and other sums such as Buyer’s Stamp Duty (BSD), Additional Buyer’s Stamp Duty (ABSD) if any, and legal fees to be submitted on time to complete the sale sucessfully. Now, your solicitor will lodge a caveat on the property, coordinate with the financial institution, CPF board (if applicable), prepare the mortgagor/mortgagee documents.
Engage an Agent
Experienced real estate agent will save you time and probably a bit of uncertainty as well. They provide you guidance, helpful information on the property market, send you listings from trusted property portals that fit your parameters, saving you time for looking duplicate listings. Their knowledge of the home buying process, timeline of buying and selling transition, negotiating skills, and familiarity with the area you want to live in can be extremely useful and important.
Communication with Agent
The most important thing that you are going to need in a real estate agent is trust, communication, and responsiveness. It is paramount that you find an agent you feel comfortable confiding in and trusting with the most expensive purchase of your life this far. Tell your Agent exactly what you are looking for so they can best help you find your dream home. The more specific you can be, the more your Agent can be helpful.
Take extra time to get a pre -approval loan from mortgage broker before you start your home search. It shows sellers that you’re a serious buyer which is a great way for first-time home buyers to get ahead in a competitive market.The financing sum pre-qualify you to understand the type of house that meet your budget, it established your purchasing power and puts you in a stronger negotiating position. Pre-approval isn’t a guarantee that you will ultimately get the financing, but it lets you know for sure how much home you can afford.
Choosing type of House and Location
Whether you are looking for a big home to expand your family, a couple home or an investment property, you would know what is the must-have environment, features and amenities you want. What is the home size best suit? How are the schools in the neighborhood? What are the potential upside? List down the must-have features and narrow the search to those location and homes that fit your exact parameters to find that right home.
Make a Competitive Offer
It may be hard to know how much you should offer if this is your first time buying. That’s when you can rely on the expertise of your real estate agent. Ask for a comparable sales from agent, it is a information of similar home types in the same location that have sold within the past three months. Discuss with your agent to come up with competitive offer to make Seller budge. You would not want Seller to turn you away with unattractive offer compared to comparable sales , it does not benefit in the negotiation process.
Save Time and Money
Most of the time, buyers prefer to source for their dream home on their own, not knowing that by engaging a licensed professional real estate agent helps them save time from arranging duplicate viewings, untrueful or misled information from seller’s agent listings. Agent spent time communicating with listing agents to obtain accurate information, researching each agent listings to ensure requirements are met before arranging viewings for buyer. An experienced agent can secure a better deal or package tailored specifically to buyer’s preferences or requirements which results to saving costs for the buyers.
Agents' Expert Knowledge of an Area
An experienced real estate agent has intimate knowledge of district, location, value-added development, including property market sentiment. They can identify comparable home sales, prices and hand this to you before making any decision. By engaging a professional agent to represent you, they would advise the pros and cons, anticipate or take note of any problem that could arise for every home listings you viewed whereas viewing with seller’s listing agent without a representative agent, may cause you overlook the cons and problems easily.
Privacy, Confidentiality and Fiduciary Duty
Agents have what’s known as a “fiduciary” responsibility to their clients. They legally obligated to put their clients’ best interests first. Do you want to turn over your most intimate financial or personal details to the seller’s agent, who has no fiduciary responsibility to you but only to the seller? All registered real estate agent are covered by Professional Indemnity Insurance. Real estate agents can be held legally liable for claims arising from wrongful acts (such as negligence, errors, and omissions or breaches of professional duty) committed during the performance of professional services. So, why not engage one to your advantage?
Agents' Expert Negotiations Skills
Remember that fiduciary responsibility your agent has to you. It is agent’s job to get you the best possible price or deal on the property you want to buy. Imagine if you have to negotiate the price yourself, you might end up losing your cool, over-emotional that could cause to burst the deal during the negotiation process or you might end up buying at high price unknowingly due to your over-excitement or impulse act with the home. Professional agents are levelheaded when comes to negotiation and they have no emotional stake in the outcome that can cloud their thinking or jeopardise the negotiation process.
Smoother Buying & Selling Process
Real estate transactions involve timeline, paperworks, requests, offers and contract agreements. All kind of pitfalls can kill the deal at any point of the deal. Professional agents navigate and facilitate the buying and selling timeline process, making sure sales proceeds ready before purchasing, due diligence, ensuring financing loan secured and all of the professionals involved are staying on task and on timeline.