Buying a house in Singapore: Top Mistakes First-Time Buyers Make

Buying property in Singapore? The entire process may be complex, but it’s important to educate yourself on the market before taking a big decision.

From putting all your available cash on the table at closing to not considering a professional’s advice, here are the most common – and costly – mistakes first-time homebuyers make.

1. Overestimate what you can afford

buying a house in singapore

First-time buyers immediately run into trouble when they don’t understand all the expenses involved when buying a house in Singapore, which is why it’s important to remember that monthly payments do not only include the mortgage, but also interest, taxes, insurance, inspection reports and stamp duty fees.

It’s also a good idea to check a mortgage calculator and get pre-approved for a mortgage loan so you know how much a bank is willing to lend you before you make an offer on a home.

2. Avoid professional advice

buying a house in singapore
Avoiding experts is one of the common homebuyer mistakes make, but it’s a proven fact that the right professional advice saves far more than it actually costs.

For instance, a property agent’s role today is more than just finding listings for you; it’s about presenting your offer to the seller’s agent in a way that will help get it accepted and making sure it sticks through an escrow.

A property agent will help you find properties that match your needs and are in your price range as well as arrange viewings. Once you’ve chosen a home to buy, these professionals can assist you in negotiating the entire purchase process, making an offer, and completing the necessary paperwork.

Besides, a good real estate agent’s expertise can also protect you from any issues you might encounter during the process.

3. Buying property in Singapore without getting pre-approved

It might be tempting to fall in love with a new place, but before beginning your search, don’t forget to get pre-approved for a mortgage. You can start asking around for recommendations on trustworthy mortgage brokers, then set up a time to talk with each one.

Also, not to waste time viewing properties, start by having an Approval-In-Principle or AIP, which lets you know the loan quantum you are eligible for and the monthly repayment amount.

An AIP is non-binding for both the applicant and the financier therefore you are allowed to change financiers even after obtaining an approval-in-principle loan from the financier.

4. Skip the home inspection

buying a house in singapore

Singapore property

So you’ve narrowed down the search and you’re ready to make an offer, but don’t rush. When buying property in Singapore, make sure you get a thorough home inspection to check for potential issues with the pipes, the plumbing or air conditioning.

Saving a few dollars by not getting the home inspection report can end up costing you thousands of dollars after you move into your home. To be on the safe side, have a pest inspection carried out as well!

5. Not being realistic about the timeline

buying a house in singapore

When it comes to property for sale in Singapore, you are spoilt for choice. But keep in mind that buying a house in Singapore takes around 12 weeks, so ensure you have a realistic timeline about the process to prepare all the necessary steps

In terms of financial timeline breakdown, you can expect the following:

  • On day 1, you will give the 1% option amount
  • By day 14, you can exercise with 4%; this will kickstart the completion period of 10 to 12 weeks
  • Within 2 weeks from day 14 – pay stamp duties
  • 2 weeks before completion – settle 15% cash downpayment or CPF

6. Thinking short-term

It’s important to think long-term and anticipate your actions in the future when buying property in Singapore Will you want to rent your house at some point in time? If yes, it’s better to calculate the rental yield and know whether it’ll be easy to rent the property out.

Besides considering the property’s selling price, design layout, location and amenities, take note to find out what are some of the upcoming developments in the vicinity as it will have a direct effect on your rental yield.

Singapore property

Also published on Medium.