If it’s not already apparent by now, a seller can only grant one OTP at any point in time to one buyer. Sellers Can Only Grant One Option To Purchase (OTP) At Any Point In Time The witness cannot be involved in the transaction. This can be a salesperson or anyone who is a Singapore citizen or PR, aged 21 and above. Witness: A witness will be required for the OTP. For HDB flats, you can use the form prescribed by HDB. Read Also: What Is Cash-Over-Valuation (COV) And How Does It Affect HDB Pricesįor private properties, the OTP agreement should be drafted by the seller’s lawyer. For example, if you buy an HDB flat for $500,000, the $1,000 option fee is part of this purchase price should the option be exercised.Īlso, for HDB flats, you can only seek an HDB valuation request after the seller has granted you the OTP. Do note that the option fee is 1) non-refundable and 2) serves as part of the purchase price of the property. The higher option fee assures the seller that the buyer is unlikely to back out of the purchase as they would need to forfeit their option fee.įor HDB flats, the option fee cannot exceed $1,000. Sometimes, buyers and sellers may negotiate to allow for a longer option period in return for a higher option fee. Option fee: For private properties, the option fee is usually 1% though this can be negotiated. For private properties, this is usually 14 days but can be negotiated to be a longer duration if both parties agree. Option period: The indicates the validity of the option period. Purchase price of the property: This indicates how much the seller has agreed to sell the property for. The seller must be the legal owner of the property to issue the OTP. It outlines a few key information that the seller of the property is granting the buyer.Īddress of the property: The OTP needs to indicate the address of the property. The Option To Purchase (OTP) is issued by the seller of the property to the prospective buyer. Basic Information Required For An Option To Purchase (OTP) Known as OTP for short, an Option To Purchase (OTP) is a legal agreement given by the seller of a property that gives the buyer the option, but not necessarily the obligation, to purchase a property at an agreed-upon price. For anyone buying a property in Singapore, you would need to be familiar with the term Option To Purchase.
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