Purchasing of a private property is a big-ticket item and may not commonly be dealt with in detail. We would like to share some of the common issues that potential purchasers, like yourself, may encounter.

When you have found your ideal home on the resale market, in many cases, your agent will prepare an Offer to Purchase stating the salient terms to be found in your Option to Purchase. Thereafter, you will proceed to exercise the Option and then await completion of your purchase where you will then be able to collect keys to your new home.

Purchase of Private (Completed) Property

At the outset, we briefly set out the key timelines for a purchase of private (completed) property:-

key timelines for a purchase of private (completed) property

But what then is an Option to Purchase?

Briefly, the Option is a contract (usually upon payment of the Option Fee) giving you an exclusive right for a stipulated period to confirm the purchase of the subject property (i.e. exercise of the Option). The Option is generally the primary document that sets out the terms governing your purchase of your new home. It is therefore prudent to go through with your seller on the terms of the Option before payment of the Option Fee.

Many a times, the Option will be sort of a “standard” document based on templates from your estate agents and many terms in there are what the industry considers as “usual”. However, do you know what the “usual” terms actually are?

Some of the key terms / aspects include:-

1. Particulars of the Property and Parties

It might be apparent but it is important to check that the particulars of the property and parties (preferably with reference to the NRIC / passports or other identification documents) respectively are correct to avoid any unnecessary dispute / delay as a result.

2. Mode of exercise of the Option

It is most common to find Options containing the mode of exercise where you need to pay the balance deposit in favour of your seller’s law firm and forward the original signed and accepted Option to your seller’s law firm by a certain deadline.

In some situations, this part is left blank and can cause much stress and difficulty when your seller is less cooperative after receiving the Option Fee and you are not able to finalise your purchase (even if you have the original Option on hand) because you are not able to exercise it.

3. Expiry of the Option

  1. Once the Option expires, your Seller is entitled to forfeit the Option Fee and sell the property to other parties.
  2. You should also take account the time needed for your financier (if any) to provide approval of the loan. In the event that you exercise the Option and the sale is not completed on the scheduled completion date due to your default (e.g. the financier is unable to disburse the loan etc.), you might potentially be liable to: pay interest on the balance purchase price; pay costs for the cancellation of any entry relating to the contract in any register; loss, costs and expenses incurred by your Seller for re-selling the property; and any other rights or remedies available to your Seller in law or in equity.

4. Completion Date

In addition to what we have mentioned above, you should check with your solicitors on the time needed for disbursement from your financier and/or CPF Board. It is best to also sound your sellers out on their solicitors’ time for completion of the purchase as well. The completion date must be a working day of both seller’s and lawyer’s law firm and may be either a fixed day or a day falling after a stipulated period of time after exercise of the Option. If the latter, it is usual to find periods between 8 to 10 weeks for completion. If your Option, includes both choices for selection, do remember to strike the inapplicable one out.

5. Purchase Price

You will be liable for all expenses, outgoings and levies concerning the property after the completion date. Examples of these are property tax, which is generally paid a year in advance, and maintenance fee and/or sinking fund, generally paid 3 months in advance. Therefore, you would be required to reimburse the pro-rated property tax and maintenance fee and / or sinking fund upon completion through your lawyers. In addition, you will be liable to pay goods and services tax on the purchase price if your Seller is accountable for the same.

6. Dishonoured Payment

Your Seller is entitled to treat the contract as repudiated and to rescind the same if the cheque payment of the balance deposit for exercise of the Option is dishonoured upon your Seller’s or their solicitors’ presentation of the cheque. This means that your Seller can decline to continue selling you the house! Furthermore, you will lose your Option Fee and your Seller can re-sell the property to other persons.

7. Entire Agreement Clause

In the event that the Option includes this clause, both parties are only bound by the terms in the Option and parties are not entitled to rely on representations or statements made before the contract was formed. Thus, be very careful what salient terms were discussed prior and not written into the Option.

8. Inventory List

If your Seller has agreed to provide items, it will be prudent to include a duly signed Inventory List reflecting the same to be incorporated in the Option. It is possible that an Option without an Inventory List means that no such items have been agreed to be handed over.

9. “As is where is” basis

It is common that an Option includes this clause, which you confirm that you have full knowledge and notice of the actual state and condition of the property. You are therefore unable to raise or make any objections or requisitions concerning the same.  As such, it is prudent to conduct a thorough inspection at the outset.


These are just some of the usual or common terms found in standard Option to Purchase. However, a standard Option is not the be all and end all. If there are some matters which have been discussed to be part of the transaction, it can be negotiated into and should appear in the Option to Purchase.

Prospective purchasers like yourself may wish to consult a conveyancing lawyer for legal assistance in reviewing the Option to Purchase. You may contact us at [email protected] or call +65 6533 0288 if you wish to know more about the legal process for purchasing real estate in Singapore.

The above shall not be taken as legal advice. When in doubt, always consult a practising advocate and solicitor.