Below is a guest post on property buying in Singapore. It is written by Stuart Chng, Senior Associate Executive Director of OrangeTee & Tie, a renowned leader, real estate broker and personality in the real estate industry.
He is a licensed real estate agent, team leader, industry trainer and speaker, columnist for several property newsletters and blogs and is often quoted in media interviews on 938FM, Channel 5, PropertyReport, PropertyGuru and other publications.
Throughout his career, he has also coached many top million dollar producing agents from different real estate agencies in Singapore. You can find out more about him at www.StuartChng.com.
A Comprehensive Property Buying Checklist
Congratulations on starting your search for a new home or investment property!
Whether you’re a soon-to-be parent, a first time property buyer or investing in your Xth property, it helps to have a comprehensive guide & checklist to follow when deciding on a property.
Apart from the criteria cited in my earlier article, Important Entry Signals for Property Investors, here’s a checklist of stuff you would do well to check for when committing to possibly the largest purchase in your lifetime!
Some are basics, some take a little more work.
Ready? Let’s dive in!
A Very Comprehensive Property Buying Checklist
A Guide When You’re Early In The Search Process
Is it for Investment or Own Stay Purposes?
Properties are mostly for investment purposes (Rental cash flow, capital growth play or both) or for your own occupation.
An investment home that’s smack in the Central Business District might not make the best home choice for everyone. Neither does a condominium in Sembawang make the best investment objective choice.
So make sure you have a conversation about what the family really wants with this purchase.
Before you start searching for a home, do yourself a favour and start with a financial affordability analysis with an experienced property wealth planning trained agent and an in-principle approval for a loan. This helps you prevent time and resource wastage and disappointment when you discover that the home you fell in love with is out of your reach.
Also, a conversation with an experienced and skilled agent will help you obtain greater clarity into how much to budget for your renovations, stamp duties, adhoc costs and tax optimisation methods to structure your purchases.
If you’re buying a private home, do a TDSR (Total Debt Servicing Ratio) assessment.
If you’re buying a HDB Flat or Executive Condominium, do a MSR (Mortgage Servicing Ratio) assessment.
Both can be done at: DBS Mortgage Affordability page here
Property Type Choice
There are multiple housing types and they usually increase in prices this way.
BTO Flats -> Resale Flats -> Executive Condominiums -> Apartments/Condominiums -> Landed Properties -> Good Class Bungalows
Which one suits you best? Is it best to go for the most expensive one or to invest in another property that can reap you a return? What options are there for you within each category?
A conversation with a skilled agent can save you many hours of research and decision-making.
If you like to do some research into what’s available on your own, the top 2 property portals in Singapore with the most listings are:
No one can tell you which location suits you best but you. What is the lifestyle that you want, with the amenities or loved ones that you must be near to and at a budget that you can afford?
Locations that are walking distance to train stations and malls are often preferred by the majority as compared to quiet but secluded areas.
According to a poll, the majority responded that 10 minutes walk for an averagely healthy person’s pace is the max they deemed walking distance.
Tip: Investing in a property that’s near to transportation hubs and amenities definitely means it’s easier to find a buyer when you are exiting.
Brand New or Resale
Brand new properties come with certain perks such as warranty for parts, no history of past owners, new fittings, design and facilities, similar entry prices for all owners (Meaning upwards price pressures as human nature has a tendency towards loss aversion) and a longer tenure for leasehold properties.
Of course, the downsides of going with brand new properties are that room sizes have shrunk as compared to older properties, having to wait a few years for it to be completed, unknowns about brightness, ventilation, actual noise level, water pressure etc.
Going with Resale? What is the maximum property age you will accept?
Old properties usually require you to fork out a significant sum to renovate it and there may be blind-spot costs that only materialise over time (Similar risks as buying a resale car).
The interiors, cabinetry and bathrooms may not be contemporary in it’s material or design choice.
Resale homes also do not come with warranties and as such what you see is what you get.
Wear and tear issues like wiring, aircons, fibre connections, pipings, waterproofing, popping floor files could start surfacing the moment you take over. So be mentally prepared for additional expenses or hefty renovation costs.
Indicative Valuation (If It’s a Resale Property)
If you’re putting up an offer for a resale property, make sure your agent has done a couple of indicative valuations so you will know upfront whether you’re paying a fair price. Valuation also affects the amount of cash, CPF and loan you can use and as such is a critical factor to check before committing to any purchase.
Note: Paying above valuation does not automatically make it a bad deal IF the unit comes with extensive suitable renovations that could save you time, money and hassle.
Back in 2007, to understand better the factors that affected valuations, i attended a valuation course by the former chief valuer of Singapore Institute of Surveyors & Valuers.
This quote was an important take away for me.
Valuation is as much an art as it is a science and opinions of even veteran valuers may differ.
E.g. There’s no one correct way to quantify the value of a sea view vs a city view. In a bullish versus a bearish market, the same views would be priced differently as well.
Checking at least 3 valuation sources would also be prudent to get a sensing of the fair market price as some banks such as DBS have a tendency to provide more conservative valuations while some like UOB tend to provide more aggressive valuations.
One good source for a free online valuation: www.srx.com.sg/xvalue-pricing
Tip: It is possible to request that the valuer matches the selling price so that you may obtain higher loans and lower your cash/CPF requirements for it.
Indicative Valuation if Buying a New Launch Project
Banks usually support the selling prices of brand new projects and matching valuations are seldom an issue.
What you would want to do is to ensure that the project is selling at fair market prices to its neighbourhood after factoring in age and quantum prices (Overall price e.g. $1.2m).
Remember new properties always comes with a premium and PSF prices alone do not paint complete picture of whether a property is expensive or cheap.
Changes in government regulations such as TDSR and the removal of bonus GFA (Gross floor area) incentives for building bay windows & planter boxes has since resulted in smaller unit sizes across the island at a lower quantum and higher psf.
Always check your tenancy agreement terms before you place a deposit.
Vacant Possession or Tenanted?
Make sure you get the details in writing (Messages are fine too) whether you are buying a unit that would hand you vacant possession at completion or comes with a tenancy for a stipulated period of time.
If you’re buying a tenanted unit, ALWAYS make sure you sight and look through all terms and conditions of the tenancy agreement.
If you need to break the lease and move in right away, is there a clause that allows you to do that?
Make sure you go down to site to meet and greet the tenant too so that you are assured that it is not a phantom tenant.
If you do not understand the contract terms, make sure you engage an agent or lawyer to explain it to you and point out blind-spots if any.
There are cases of unethical sellers who would conjure up a high rental yield tenancy agreement and a phantom tenant (Usually a $1 paid up capital company) and use that as a bait to hook potential buyers.
For the less informed, once the completion arrives, the tenant would break the lease and the new owner would have no significant legal recourse. Ouch!
So, ensure that your agent watches your back when representing you on such cases. This is also one of the reasons why having an agent isn’t just about having a middleman.
Landing The Perfect Property
Big or Small development
Is a larger condo or smaller one better for you?
Generally, larger developments are preferred as there are more facilities, security, more residents to share the burden of maintenance fees and a higher awareness that this property exists (Helps you if you are selling or renting it out).
The downside of course is that you will have many neighbours and chances of crowding and overbooking of facilities. This isn’t a huge concern though as larger condos usually have alot more space for everyone.
Smaller projects typically cost less per square foot than larger ones so price and lower density are the common reasons why people prefer them.
It is not true that maintenance fees are always cheaper at smaller projects though.
Does the property suit your family members?
Does that dream home deep within Seletar Hills suit you at this moment? Will your kids, spouse or in-laws be able to commute easily by themselves to town, schools and all that without being dependent on you or GRAB all the time?
If your parents/in laws are staying with you, will the new place be easy for them to keep in touch with their friends? Keeping the harmony is even more important than investment value!
Transportation Options, Amenities and Convenience
Are you the type who loves convenience at your doorstep? There are those who prefer to stay near a MRT station, shopping mall and amenities while there are those who favour the seclusion of a very quiet location with only 1 feeder bus running by it.
Which one is more suitable for you and your family?
Minimising time spent on transport can improve your quality of living.
Is convenience more important than a dream property at this stage of your life?
E.g. If you’re the only driver in the family and you’re always busy, it might make little sense to move to a secluded landed or condominium that’s deep inside an estate.
Yes, they might be quieter and more exclusive but you face alot of trouble when the missus or kids grumble about it all the time.
It may also be harder to hire part-time help, tuition teachers, or get the in-laws to come over regularly.
Good primary schools within 1km?
Parents parents.. as if we didn’t have enough on our plates to juggle, if you’re moving and you have a young kid who’s going to primary school soon, check whether the schools of your choice are within 1KM of the property you are buying for improved chances of getting in.
Take note that it is possible that some blocks within a condominium are within 1KM of the school while some blocks aren’t. So do not assume and always check.
Check the home-school distance category from Singapore Land Authority’s (SLA) OneMap SchoolQuery Service.
It will be helpful to double and triple confirm with SLA and schools if you are intending to move for this reason.
If in doubt, email SLA_enquiry@sla.gov.sg or call the SLA helpdesk at 1800 323 9829.
Alternatively, you may check with the schools directly on the distance between your intended purchase address and the schools.
How many years left if it’s a leasehold property?
Personally, i would not recommend my friends to go for properties that are more than 15 years old.
Although there may be enbloc opportunities in the future, it could be pipe-dream or take many decades to materialise and result in a low ROI.
Properties that are older also begin to stagnate in price and rentals due to unit condition, design and facilities aging. Furthermore, if you were to stay for 10 – 15 years there, the next buyer is very unlikely to pay you a premium above your purchase price for an even shorter lease.
Of course, this theory may go out the window IF a particular project has a very high chance of enbloc in the near term.
A good resource to check up your jackpot odds
You can refer to the useful Enbloc Odds Probability tool by EdgeProp.
Environment at different timings and weekends
Visiting a property at different hours and days of the week might be helpful for you to better understand it’s peak hours for traffic, noise, chokepoints of parents queuing up to pick up kids etc.. so that there’s no surprises when you finally live in it.
For example, it is pretty common for the condominiums beside United Square to face huge jams on weekend afternoons as kids get sent to enrichment classes.
Are there alternative ingress/egress routes then? Better check lest you face frustrations every weekend!
Are you comfortable staying in front of an expressway or major road? The noise levels are drastically different for units facing those versus pool or greenery units.
Also, for certain area like Punggol, the almost daily deafening fighter planes training can really be a pain if you sleep in the day and work night shifts.
Distance and Time to your workplace
Would it make sense to stay in the East if you have to commute 1.5 hours a day on public transport to your workplace in the West? Time saved is worth alot in sanity and energy.
Distance and Time to your in-laws place
If you visit or rely on your in-laws alot, it will be wise to stay really close by to them and save much of your life on the roads.
Floor level preference
Must you stay on a high floor or is a low to mid floor unit suitable for you?
E.g. Low floor units tend to be cheaper but more prone to noise, insects and dust.
High floor units tend to be pricier but enjoy more privacy, less insects, noise and dust.
Ground floors have it’s own charm but also come with cons such as snails and insects crawling in, lesser privacy and security concerns.
Prized views cost a premium! Are they a need for you?
City View, Sea View, Greenery View, Unblocked View?
The usual views that command a premium are those that face greenery, pool, sea views or unblocked views overlooking an estate or the city.
If pool views are what you like, go with lower floor units so that your eyes (And your neighbours) are naturally focused on what goes on below. Pools are also hubs of activities and it is enjoyable to unwind while having drinks overlooking them.
High floor units are suitable especially if they have unblocked views that provide you maximum privacy and enjoyment. Avoid buying high floor units that face other units as it becomes pointless in paying a premium for them.
The higher you go, the more blue skies you will see and that’s also a luxury itself, given that we are often surrounded by high rises around us.
*Hums: “Mr Sun, Sun, Mr Golden Sun..” My son loves that song.*
Are you one of the rare folks who do not mind a west facing unit that gets the direct afternoon sun? If not, better narrow them down and rule them out to save time. Visit one between 3-4pm to check out whether it bothers you if you are unsure.
If you are paying a premium for a unit with a great sea view, CHECK that the land in front of you isn’t zoned for another high rise.
Bearing in mind though that the URA master plan changes from time to time and land zonings are not guaranteed forever.
However, basic checks and some common sense will help you avoid buying into this risk as a subsequent buyer would definitely not pay you the same premium once your mouth-watering sea views are gone.
You can conduct checks on land use planning and zoning at URA Masterplan 2019. It is easy to navigate and very detailed.
Researching the zoning and upcoming plots of land for sale nearby can help you make better decisions.
If you are buying a condominium or apartment, do you prefer a dumbbell layout or a traditional wing shaped layout?
Well, there are benefits to both and it really is a personal choice when it boils down to this.
– Are you a lover of a large patio, roof terrace or a balcony? If not, they are wasted spaces to you.
– Would you like the flexibility to rent out or house your in-laws under one roof while maintaining some privacy? How about a dual key layout?
– Are there significant void space or high ceiling mezzanine spaces that you are paying for? It could mean you are paying a higher per square foot price than you think you are.
– Are there alot of wastage corridor spaces within the unit? They are usually not preferred by savvy buyers.
– Is the layout regular or odd shaped? Regular shaped layouts are preferred widely as it is easier to design and orientate your furniture layout. Also, humans tend to view symmetry as beautiful and as such, odd shaped layouts are usually less desirable.
– Is there a rubbish chute within the unit or outside? Is there a bomb-shelter or store?
– Is there a yard for you to handle your laundry? These are personal preferences and up to individuals.
Tip: One of the things to look out for is the “free-space” that you get outside your main door that’s really helpful for placing your barang barang or a shoerack. I personally always look for this little bonus when shortlisting properties for my clients and friends.
They all end up very happy with this little life hack!
The one on the right has bonus free floor space for a shoe rack or a bench. (Note: MCST has rules on corridor obstacles due to fire safety regulations so exercise common sense! *wink)
Do you (really) need a study?
A dedicated space for work and study is always welcomed especially if you work from home at times. However, it is a luxury and the additional space does not equate to a bedroom as it’s much smaller.
Living Room and Bedrooms Direction
If you have specific directional preferences, it will be good to narrow your search options according to that to save time for all parties.
Generally, North South facing homes are windier and preferred as the morning and afternoon sun do not have such an impact on occupants enjoyment.
That said, take note that even North South facing homes tend to have some afternoon sun at different times of the year.
East facing homes get the morning sun and tend to get darker earlier than the rest.
West facing homes get the afternoon sun and heat and tend to stay brighter and warmer for longer. From experience, Europeans and Westerners do not seem to mind west facing homes as much as Asians do.
Natural Ventilation and Brightness of property
These are very important factors that can’t be changed. Ensure that the property you choose is well-ventilated and well-light by naturally lighting as far as possible.
There are properties that are ill-ventilated or lit and can cause mould and mildew outbreak. These lead to health and respiratory issues, which are not to be taken lightly.
I have also come across properties that are covered on all sides by neighbouring blocks that cause stuffiness and heat to build up regardless of the temperature outside.
Remember: A bright and breezy property is always more sought after. It is recommended that you visit a property personally to assess as floor plans and fancy brochures cannot cover this.
It definitely helps to buy from a reputable developer as construction involves so many different parties that it is common to face defects issues when you take over the property.
A reputable developer will always respond and rectify issues with construction quality. There have been recent cases of new developers that cut corners, deliver substandard quality and are facing legal suits from their buyers. In the worst case scenario, some have even failed to complete their projects and have left buyers in limbo for years.
Hence, a good reputation is always a bonus for your margin of safety.
The risks of buying from less reputable developers. It can happen in Singapore too!
Who’s gonna be your neighbour?
It isn’t compulsory but certainly a good to check as we all have heard of neighbours from hell.
Neighbours per floor?
Premium condos typically have no or few neighbours on each level.
Some even come with a private lift lobby so you definitely do not have to worry about placing your bicycles, golf clubs etc at the lift lobby.
Otherwise, a typical condominium has between 4 to 7 neighbours per floor.
Maintenance fees and Sinking Funds
Maintenance fees can be surprisingly costly for some condos in Singapore. For example, a 2 bedroom unit at Scotts Square can cost almost $1000 per month. So make sure you check the monthly damage and take it into account.
For older properties, where maintenance costs start to increase, it is wise to check whether the sinking funds held by management is significant. If sinking funds are low, it may mean topping up a significant amount by all the owners when the lifts need to be replaced or a major renovation is required.
Water Pressure (For Resale Properties)
Seriously? In Singapore? Yes, Water pressure you heard me right.
Check the water pressure for the home you are interested in just in case it really isn’t to your standard.
Rain showers might not work as well in all units especially homes on the top floors as there’s insufficient build up of pressure.
Sometimes though, it can just be a technical issue (valve not fully turned on, pipe chokage etc) that can be solved by plumbers.
Pool size and types (Especially if you are a serious swimmer)
Small projects usually have smaller pools and sometimes not a full 50M lap pool for serious swimmers. Well, not like you won’t check the pool out if you are such an avid swimmer. But just in case!
Gym size and facilities
Condo gyms are usually not as well equipped as commercial gyms are. So, check out if they at least have some free weights and machines if you are more than just a thread-mill user.
Parking space is usually provided at 1-2 complimentary spaces depending on your unit type. Check if it’s free parking or reserved lots.
If you are a multiple car owner, it doesn’t hurt to find out the cost of extra parking spaces per month.
If you entertain frequently, how many visitor car park lots are there and are they convenient for your guests? By now, we have all heard about the commotion at 8 Riversuites which charges guests for parking after 11pm daily. Some projects also have visitor parking spaces tucked in one corner and aren’t particularly easy to locate.
Side-gates, entry and exit routes are there?
Additional routes and side gates can save you precious time and energy cutting through the compound.
What items exactly are coming along with the property? Ensure that this is noted down in writing and in photos to prevent disputes. Do not assume that just because the property came with a developer provided fridge, the owner will leave it behind.
Lastly, learn about where the growth hotspots in Singapore are that’s unfolding over the next few years.
“Wherever the government invests in, capital values tend to grow in tandem.”
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