| Q1: |
What
is an Option to Purchase? |
|
It is an irrevocable offer made by the
seller to the buyer which prevents the seller from offering another
buyer of the same property within the agreed time period (usually 14
days). To ensure that a contract is enforceable the buyer pays the Option
Money to the seller.
|
| Q2: |
How
much should I pay for the Option money? |
|
1% is the usual practice for the purchase
of private properties. The standard option money for HDB flats is up
to S$5,000.
|
| Q3: |
Who
usually prepares the Option to Purchase document? |
|
It is usually prepared by the Seller's
solicitor. Some real estate agencies also provide their clients with
the agency's Option to Purchase documents.
|
| Q4: |
What
should I do when presented with an Option to Purchase? |
|
You should not rush to pay the Option
money until you agree with all the terms on the contract. You should:
a) Consult a solicitor before taking
any action
b) If you want any amendments to be made
to the Option, you should ensure that the Seller
does so before you pay for the Option
c) Make sure that any amendment is made
with the Seller's consent, because the Seller
is not legally obligated to make any amendments .
|
| Q5:
|
What
is "exercising" the Option? |
|
It means that the Buyer
is complying with all the terms in of the Option made by the Seller
for selling his/her property. A binding contract is created, and the
Buyer will also pay for the next 9% of the purchase price of the property.
|
| Q6: |
Can
I get my deposit back, if the Seller fails to complete the contract? |
|
Yes.
|
| Q7: |
What
are the main terms to include, in order that the Option is valid? |
| The main items are:
|
| a) |
the names of the
parties involved in the transaction
|
| b) |
the description
of the property and the price
|
| c) |
the validity period
within which the Buyer must exercise the option in order to purchase the
property.
|
|
| Q8: |
What
happens if I have paid the Option money and but cannot exercise the Option
within the agreed due date? |
|
If you do not exercise the Option within
the validity period stated, the Option would expire and your seller
is entitled to forfeit the option money and sell the property to another
buyer.
|
| Q9: |
What
can I do if I am overseas and the completion of the property I wish to
purchase is scheduled before I can return to Singapore? |
All you need to do is to appoint
somebody to sign these documents on your behalf and/or do all the things
that are necessary to complete your purchase. You have to do this by signing
a legal document called a 'Power of Attorney'.
|
