Does signing an Option To Purchase (OTP) mean you are buying the house?
Redbrick·2022-01-19 12:00
If you have been reading articles on the property market and the process of property purchases, you have probably come across the phrase Option To Purchase (OTP) before. Yet, the significance of OTP is often glossed over in most article. If you are curious to learn about the legal implications of OTP and the role it plays in the process of buying a property, this article provides you with just that.
Before entering into a Sales & Purchase (S&P) Agreement for the transaction of the property, buyers and sellers usually enter into an Option To Purchase (OTP). OTP refers to a contract between a buyer and a seller that gives the buyer a period of time to consider whether he wants to proceed with the purchase in exchange for 1% of the agreed purchase price. Typically, the OTP would give the buyer 14 days (21 days for HDB) to consider if he wants to continue with the purchase of the property. In turn, the buyer has to pay the seller an option fee of 1% of the property (for private properties) or $1000 for HDB resale flats. Over the period of 14 days, the seller cannot sell the house to another buyer, else this buyer can sue him for breach of contract.
……Singapore Property
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Tony Tan8490 22/01/2022
This is like making a reservation at a restaurant with upfront deposit of agreed amount. If failed to turn up, the deposit will be forfeit to compensate the operator. This is fair to both parties otherwise people will just go around and signing without any real commitments
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Ah Keng 22/01/2022
Good evening and have a nice day 🌞开开心心😉😁
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