Your Step-By-Step Guide to Buying a Private Building Under Construction (BUC)
It is undeniable that attempting to purchase property in the form of a private home or commercial building that is currently under construction is a little bit more complex of a process than purchasing a building that has already been built. For one thing, residential homeowners will find that they’ll have to wait as long as a few years for their homes to be completed.
Those who are looking for a solid real estate investment opportunity often find that it is well worth the wait, but newcomers to the market might also feel a bit overwhelmed. That is why this article sets out a few simple steps toward purchasing a Private Building Under Construction that future homeowners can follow to ensure that their new homes will be worth the wait.
The first step toward eventual ownership of a new home is to visit the target property’s showroom to inquire about available units. Potential investors should examine both the models and plans of any units they are considering and the area nearby. This will allow them to get a feel for the general area and the amenities available, which is certainly an essential step for any future resident.
Investors who do choose to purchase a property are typically charged a small 5% booking fee, so be prepared to pay this fee before being given the option to purchase. It is also a good idea to check prior to making this payment as to whether an Additional Buyer’s Stamp Duty or ABSD, will be required. Any local residents who already own one or more properties and all foreigners must pay this tax, although residents who plan to sell their existing properties can reduce the amount of money they need to pay by selling at the same time as they purchase their new homes.
Once an investor has been offered an option to purchase, he or she will be sent a sales and purchase agreement. This important document should arrive within just a few weeks of purchase, and investors are generally required to exercise this sales and purchase agreement within three weeks of receipt. Most investors choose to consult with their lawyers regarding all of the key terms of these agreements, including key dates such as the release for Temporary Occupation Permits.
It is important to realize that future homeowners must also pay the Buyers Stamp Duty at the same time. Those who are liable for paying an ABSD will have to pay this additional fee, and anyone who has hired a real estate lawyer may want to pay off legal fees at this time as well.
The other 15% of the down payment on the home will be due within eight weeks of the investor’s receiving an option to purchase. This payment is usually made in cash or CPF. Once the down payment has been completed, progressive payments will be set up and property owners must simply pay them on time until their homes are completed.
The final step in this process is, of course, to head in and pick up the keys. New homeowners should be sure to inspect their properties thoroughly prior to investing in furniture and other amenities. There is generally a defects liability period of 12 months on any recently completed Private Building Under Construction. During this period, property owners can have these defects addressed free of charge.