One of the most crucial factors in buying and selling property is sales timeline. Some people are caught in the midst of no place to stay upon selling their flat.
Sales timeline is also known as Payment timeline. Many incomplete property transaction cases are due to poor management of their cashflow either by the buyer or the seller. Some ended up in court turmoil for their signing of sales and purchase agreement. While others face forfeiture of their deposit.
Let's take a look at HDB Resales, Private Resales and New Launch Timeline.
In Step 2, the buyer gives maximum $1000 cash to the seller in exchange for the OTP (Option to Purchase). Once the sellers grant the OTP to the buyers, the sellers cannot back out. It will be the buyer decision during the option period of 21 days to buy or not to buy. During this option period, the buyer is waiting for the valuation and ensure their bank loan is ready. HDB HLE loan has to be done earlier before the buyer register their Intent to buy.
In Step 5, the buyer gives maximum $4000 cash to the seller. This has been pre-agreed in one of the terms and conditions in the OTP by both buyers and sellers.
Many sellers are caught in dispute with the buyers as the sellers did not state in advance of their intention to stay upon completion. It should be done before the seller grants the OTP. By then, the buyers have the right to refuse the seller's stay as most buyers would want their keys early to move-in. HDB has stated clearly that they will not be involved in the dispute regarding the extension of stay. This should be agreeable and settled between the sellers and buyers. HDB allows a maximum of 3 months temporary extension of stay.
For sellers who are looking to use their proceeds of their current HDB to buy the next property, they often make this mistake by assuming their CPF proceed can be used immediately. It takes up to 2 weeks to go back to CPF OA. Not only that, it takes at least another 2 weeks to apply to use it for next property. Law firm has the ability to shorten it to a duration of 21 days for CPF in-and-out for property use.
Private Resales timeline has more flexibility as compared to HDB Resales timelines. It allows better time management and cash flow for both sellers and buyers. 1% Option fee and 4% Option Exercise fee can be given to the seller or the seller law firm. All these factors can be discussed by both parties.
If the buyer is buying the property with full cash, the process can be shorten to 6 weeks after exercising Option to Purchase.
There must be constant coordination between the sellers and the buyers such as avoiding in using the same law firm and the dates of their transaction stages.
Private sellers, who are using their CPF proceed for the next purchase, should look out for the amount of time needed in processing the return and the withdrawal of CPF OA.
PRIVATE NEW LAUNCH
Progressive payment is used to buy new launch condo. You pay 5% booking fee to the developers to book the unit that you want. Some projects may allow you to split the 5% booking fee in different time stages.
Another mode is deferred payment scheme which is rarely offered by the developers nowadays. It is simply about having buyers to stay first in the unit and pay the balance later.
Stamp duty has to pay within 2 weeks of exercising of S & P. This is important as some buyers are waiting for their CPF OA to be used to pay instead of cash.
Some buyers go beyond the stamp duty to lower their loan (also lower the loan interest amount) by pacing themselves in the construction of the projects,
Above is the theory.
In reality, there is something to be concerned of and that is the human thing. It happens often that the buyers jeopardise the deal of the sellers as they are waiting for their cashflow and does not know the timeline stuff well. It affects the sellers in moving over to their next property purchase.
Same for the sellers who delay in the process and refuse to move out.
Worse still, the agreement has been signed and huge deposit are made. The situation turns ugly when it is head-on. If you need someone to coordinate and ensure smooth transaction, engage an agent to help you.
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