Many residential Singapore property sales involve buying property in Singapore at new launches. These are usually homes under construction, being sold new by developers.
This guide to property launches in Singapore explains terminology & processes involved in buying property in Singapore at such launches. Click links below for answers.
(But if you dropped in here by mistake when you're actually looking for property to buy, please see Singapore Property Sales for new property launches in Singapore.)
In Singapore, a developer who wishes to sell units in an uncompleted development, such as one that has just started construction, must first obtain a Sale License to do so.
After obtaining a Sale License (subject to government conditions meant to protect people buying property in Singapore), he may proceed to sell units in his development.
He will then officially launch the development for sale, usually with publicity and ads in the major newspapers. A large development may even merit a media campaign. There is also usually a showroom, with models and showflats, where the preview takes place.
Usually even before official launch of the development for sale, the developer will soft launch it with a preview, called a VIP Preview, where buyers are invited to buy units first.
The advantages of buying at this point are a) first pick of units & b) usually lower prices, as developers normally price to stimulate demand at this point. They may give a discount known as the Early Bird Discount, of typically up to 10 to 11%. (Subsequently developers remove the discount to maintain their profitability.)
Usually attended by savy investors & experienced property buyers, as this is where the most value-for-money choicest picks are to be had. The "early bird gets the worm".
The moment the developer removes the discount, their unit is automatically worth more. Maybe 10% more. Some investors sell or flip their buys for a quick profit, in a sub-sale. So for an outlay of $200,000 on a $1,000,000 unit in a rising market, he could be looking at $100,000 profit within a couple of months. (The reverse happens in a falling market.)
If you are interested in buying property in Singapore, previews are a good place to be at.
The good news is, while the first preview is private and normally reserved for directors, business associates, and even shareholders of the developer, the first public preview is open to just about anybody with the means and desire to buy a unit. But you'd usually need to pre-register for it.
To sign up for the preview, just call up one of the developer's designated marketing team members, who will then brief you on the details of the project, preview date, floor plans, pricing, etc, and get your particulars to register you with the developer's office.
Developers may conduct property launches in Singapore through an in-house marketing team, or more likely (to minimise staffing), by appointing external real estate agencies to do the marketing.
Agents from these agencies call themselves the Developer's Sales Team or Office, or similar terms, which can be kind of confusing to a lay person, who tends to mistake that to mean someone from the developer's office itself.
So if you've ever wondered why there seem to be so many "developer's team" sales staff around in such Singapore property sales, well, that's why.
Processing of any sale continues to be handled by the developer itself. The job of agents from the appointed agencies is to get buyers in and to clinch sales.
No. For the simple reason that if developers allowed that to happen, agencies would not take on the job, as they would have difficulty getting buyers to come through them.
No. As in all Singapore property sales, buyers do not pay fees. The developer (as seller) pays the agency for each successful sale, and the agency splits that with the agent.
Buyers do NOT, and should NOT, have to pay any agent any fee, when buying property in Singapore.
No. Attending a preview is free.
Thinking of buying property in Singapore and want to know more about specific property launches in Singapore, or to attend their VIP Previews?
The simplest way is to contact a real estate agent who is a Marketing Team Member. The agent will likely meet to show you details of the project provided by the developer.
You will also be registered for the VIP Preview if you so request. That typically involves submitting a form listing your particulars & preferred units, with your cheque. The agent will normally take care of most of the paperwork.
It's always a good idea to have several units in mind before the preview, especially if the market is hot or the project very popular. That's because savy investors snap up the best units very quickly, so you'd want to have fall-back options ready in case your first choices are no longer available.
In fact, things can get pretty chaotic, with buyers clamouring to be the first to book their units. For some Singapore property sales, there might even be overnight queues. To avoid that, developers may choose to use balloting instead of queueing for determining who gets to go into the showflat first.
Attending a preview doesn't mean you are obliged to buy a unit. You can choose not to and your cheque will be returned to you. No charge involved.
Alternatively, here are the steps if you'd like to do it on your own. It won't make the purchase cheaper, but if you prefer not to talk to an agent...
This is a standard developer's requirement. It helps ensure that serious buyers can pick their units without being crowded out by mere sight-seers, especially at previews where it can get rather packed.
If you're concerned that someone might use your cheque for a spending spree, there's really no cause to worry. So long as you've made out the cheque to the developer's project account, and crossed it, that can't happen.
Your cheque will be returned to you if you decide not to proceed to buy.
But if you're still worried, pick an agent you can trust for buying property in Singapore, to register you.
The first preview day is usually reserved for those who pre-register, but thereafter you can visit the showflat without registering. However the best units are typically taken up first, and the best prices are usually found at the first preview too.
No. For new Singapore property sales, you can withdraw at any time before booking the unit, without penalty. At the preview, the agent will let you know the exact price for you to decide whether to proceed or not. Only when you decide to proceed will the agent book the unit for you.
Here is a typical scenario of new property launches in Singapore:
It can get pretty chaotic at a project preview, especially for very popular projects, with buyers jostling to book units first. Developers may therefore adopt a balloting system to determine order of entry into the showflat.
Developers may give a discount in the following cases:
Other than the above scenarios, developers do not normally entertain individual requests for discounts. That's because it sets a precedent which is to their detriment. If they accede to one set of buyers, then they have difficulty saying no to others who may ask for even bigger discounts.
In a hot market, they would sooner run the risk of losing a customer (after all, another one will probably come along) than risk their bottomline. In a slow market of course, it's another story. That's when they might be amenable to offering sweeteners.
If you've ever had the experience of paying for an uncompleted property elsewhere only to see the developer vanish halfway through construction of the project, you'd be glad to know this is not something that is likely to happen if you're buying property in Singapore. That's because new Singapore property sales are very high regulated.
A developer who undertakes a project of more than four units must comply with stringent government conditions before he can start to sell units in his project.
On top of that, all monies for a project including loans and payments by buyers must be deposited into a project account at a bank or financial institution. The developer can only withdraw money from the project account to pay for costs related to the project.
All contracts with buyers in new Singapore property sales, such as the Option Form and Sales & Purchase Agreement, are standard forms mandated by the government, ie. the developer cannot use his own version that might be skewed in his favor.
The buyer pays for his unit progressively, depending on progress of construction. This is known as the Normal Progressive Payment Schedule, and is also mandated by regulation. The project must complete ie. get its Temporary Occupation Permit (popularly shortened to TOP), and subsequent Certificate of Statutory Completion (CSC), within an approved timeframe.
Even upon TOP when the unit can be occupied (vacant possession), a percentage of the purchase price is withheld by Singapore Academy of Law as stakeholder to ensure that any defects the buyer finds during the first 12 months, known as the Defects Liability Period, are corrected at the developer's expense.
For all new Singapore property sales, legal completion, ie. when legal titles are conveyed to buyers buying property in Singapore, must take place within three years of delivery of vacant possession.
If the developer fails to deliver vacant possession or legal completion by dates stipulated in the agreement, he has to pay liquidated damages to the buyer, calculated from day to day, at 10% per annum of whatever total sum the buyer has paid so far.
Where there are no such rules, projects could drag on indefinitely.
The developer also has to compensate the buyer if there is more than 5% shortfall in floor area of his unit.
The developer must open a Project Account with a bank or financial institution for each housing project he undertakes, before he is issued with a Sale License (license to sell units in his development). All payments from buyers before completion of the project, and construction loans, go into the project account.
Money in the project account can only be withdrawn to pay for the project. Requests for release of funds must be supported by proper documentary proof, or certification by the architect upon completion of each stage. An auditor must certify that the money has been withdrawn according to the rules.
This rule, which applies to all new Singapore property sales, is to ensure that monies for a project, whether loans or sale proceeds, only be used for the project and not diverted to other uses, or worse, absconded with.
It's another measure to safeguard those buying property in Singapore.