The Essential Checklist Before Signing Any Property Contract

Never Sign Without This Checklist

After 15 years in Singapore property, I have seen too many buyers rush into signing property contracts without completing essential checks. The excitement of finding the right property can cloud judgment, leading to costly oversights. This checklist is designed to protect you from the most common mistakes.

I recommend going through every item on this list before committing to any property purchase, whether it is a new launch, resale condo, or HDB flat.

Financial Readiness Checklist

Mortgage Pre-Approval

Have you obtained an In-Principle Approval (IPA) from at least one bank?
Does the approved loan amount cover your intended purchase?
Have you compared rates from at least 3 different banks?
Do you understand the difference between fixed and floating rate packages?
Have you confirmed the loan tenure and monthly repayment amount?

Cash and CPF Availability

Do you have sufficient cash for the option fee (typically 1% of purchase price)?
Can you cover the exercise deposit (additional 4%) within the option period?
Have you verified your CPF-OA balance and confirmed it can be used for this property?
Is there enough cash or CPF for the stamp duties (BSD and ABSD if applicable)?
Have you budgeted for legal fees, renovation, and moving costs?

TDSR and Affordability

Does the mortgage payment plus all existing debts stay within 55% of your gross monthly income?
Can you still afford the payments if interest rates rise by 2 percentage points?
Have you accounted for maintenance fees, property tax, and insurance in your monthly budget?
Do you have an emergency fund of at least 6 months of expenses separate from your property funds?

The most important financial check is not whether you can afford the property today, but whether you can continue to afford it through potential job loss, interest rate increases, or unexpected expenses.

Property Due Diligence Checklist

For Resale Properties

Have you conducted a thorough physical inspection of the unit?
Have you checked for water damage, especially in bathrooms and below aircon units?
Have you tested all electrical switches, taps, and appliances?
Have you inspected the common areas, facilities, and overall estate condition?
Have you visited at different times of day to assess noise, lighting, and traffic?
Have you spoken to existing residents about living experience and management quality?

For New Launch Properties

Have you reviewed the floor plan carefully, noting actual dimensions versus showroom impressions?
Have you understood what finishes and fittings are included versus shown in the showroom?
Have you checked the developer’s track record with past projects?
Have you reviewed the Sale and Purchase Agreement terms thoroughly?
Have you confirmed the expected TOP date and any delay penalty provisions?

Title and Legal Checks

Has a title search been conducted to confirm the seller’s ownership?
Are there any existing caveats, mortgages, or encumbrances on the property?
Is the remaining lease tenure sufficient for your holding period and financing needs?
Are there any pending legal disputes involving the property or the development?
For strata properties, have you reviewed the MCST meeting minutes for any major issues?

Stamp Duty and Tax Checklist

Have you calculated the exact BSD payable based on the purchase price?
Is ABSD applicable? If so, have you confirmed the correct rate based on your residency status and number of existing properties?
Are you eligible for any ABSD remission (such as the married couple concession)?
Have you factored stamp duties into your total acquisition cost?
If this is an investment property, do you understand the ongoing property tax obligations at non-owner-occupied rates?

Contract Terms Checklist

Option to Purchase (OTP)

Is the purchase price clearly stated and agreed upon?
Is the option period clearly defined (typically 14 days for private property)?
Are any special conditions or warranties included?
Is the completion date specified and reasonable?
Are there any unusual clauses that you do not fully understand?

Sale and Purchase Agreement (New Launch)

Have you reviewed all the standard prescribed terms?
Do you understand the progressive payment schedule?
Are the defect liability provisions clearly stated?
What are the penalties for late delivery by the developer?
What happens if you need to cancel or assign the purchase?

Investment Analysis Checklist (For Investment Purchases)

Have you calculated the net rental yield after all expenses?
Have you compared the yield against alternative investments?
Have you assessed the capital appreciation potential based on location fundamentals?
Have you reviewed the supply pipeline in the district for the next 3 to 5 years?
Have you considered your exit strategy and timeline?
Does the investment make financial sense even without capital appreciation?

Location and Lifestyle Checklist

How far is the property from your workplace (or for investment, from major employment centres)?
What is the proximity to MRT stations and public transport?
Are there schools within 1km if relevant to your needs?
What amenities are within walking distance (supermarkets, food, parks)?
What does the URA Master Plan show for future development in the area?
Are there any upcoming developments that could negatively affect the property (blocked views, increased traffic)?

Professional Advisors Checklist

Have you engaged a conveyancing lawyer to review the contract?
Have you consulted a mortgage specialist to compare financing options?
For investment purchases, have you sought independent property advisory opinion?
If the property requires significant renovation, have you obtained contractor estimates before committing?

The 48-Hour Rule

I always recommend my clients implement a 48-hour cooling period between deciding to purchase and actually signing the OTP. During this period:

Review all the checklist items one final time
Discuss the decision with your spouse or family members
Run the numbers one more time to confirm affordability
Consider any lingering doubts or concerns
Ensure the decision aligns with your long-term property and financial strategy

This brief pause has saved many of my clients from impulsive decisions they would have regretted.

Frequently Asked Questions

Q: Can I back out after signing the OTP?

A: If you are the buyer and have only signed the OTP (but not exercised it), you can choose not to exercise, but you forfeit the option fee (typically 1% of the purchase price). Once you exercise the OTP, backing out has much more serious financial consequences, potentially including forfeiture of the full deposit and legal liability.

Q: Do I need a lawyer before signing the OTP?

A: While not strictly required, having a lawyer review the OTP before you grant or exercise it is highly advisable, especially for high-value transactions or properties with unusual conditions. The legal fee for a review is minimal compared to the potential cost of signing unfavourable terms.

Q: What if the inspection reveals problems after I have signed the OTP?

A: For resale properties, the standard practice is to purchase on an as-is basis. This is why thorough inspection before signing is so critical. For new launches, defects identified within the liability period must be rectified by the developer at their cost.

Q: How do I verify the seller’s financial obligations on the property?

A: Your conveyancing lawyer will conduct a title search that reveals any registered mortgages, caveats, and encumbrances. Additionally, check with the MCST for any outstanding maintenance fees or levies owed by the seller.

Q: Should I negotiate repairs before signing or after?

A: Negotiate before signing the OTP. Once the OTP is signed, you have less leverage to request repairs or price adjustments. Identify any issues during your inspection and factor them into your offer price or request them as conditions in the OTP.