What to Look Out for When Visiting a Showflat
Like shopping for a new car, a customary pre-purchase practice that many potential homeowners go through is visiting a condo showroom. Yet, just making the trip down to one condo showflat Singapore and viewing it infrequently yields all the information needed for making the right buying decision.
The reason behind this is simple: showflats cannot fully capture what life in an actual home is like. Nevertheless, by paying attention to the right details and asking the correct questions, you’ll be able to close the loopholes and get a better idea of what a particular residence has to offer.
If you’re planning on attending a viewing or visiting a show flat soon, here are some of the things that you should take note of.
Before you go to that exclusive new launch condominium showflat, it is valuable to first figure out your financial strength. Your purchasing capacity is not just restricted by your income, but by the number of existing properties under your name as well. Furthermore, the maximum amount of money you can loan from the bank is also limited by the total sum of your monthly financial commitments.
To make matters simple, here’s a comprehensive to-do list prior to your trip to the showflat.
- Determine how much CPF you can use for the property purchase.
- Talk to a banker to check on how much you are eligible for a bank loan based on your monthly financial commitments and current property portfolio.
- Figure out exactly which Additional Buyer’s Stamp Duty (ABSD) bracket you fall into
- Know how the Normal Progressive Payment Scheme works
- Understand how the Balloting Process works.
Moreover, to prevent being entrapped by a clever sales pitch, you need to make preparations of the following:
Set Your Budget
If you’re a first-time property buyer, the maximum amount of CPF you can use for your home purchase is your entire Ordinary Account (OA) funds. As of 7 January 2013, if you’re planning of buying your second property, you need to ensure that you fulfil the minimum sum of SGD 75,000 in your combined Special Account (SA) and Ordinary Account (OA).
Ideally, potential homeowners should not spend more than 5 times their annual income on a house. The absolute maximum needs to be 7 times the annual income. Furthermore, it’s best to restrict your home loan amount. Mortgage payments along with the monthly bills should not surpass 40 % of your monthly income.
While the government grants 60% under the Total Debt Servicing Ratio (TDSR). However, that’s frankly on the dangerous side. Many people can survive on 60% of their monthly income, but holding on 40% is a tough call.
Obtain an Approval in Principle (AIP)
This is one of the most essential things to do that buyers frequently left unnoticed. Obtaining a loan Approval-in-Principle (AIP) is now one of the most important requirements when it comes to buying a property. Without it, you cannot properly set your property purchase budget.
You’ll know exactly how much the bank is willing and able to lend you for your property purchase with an AIP. Best of all, AIP is totally free to get the process done and take about 3 working days for the bank to work on your request.
Research Sales Prices
Check the location of your preferred property on the map. List down the median prices and rental rates in the area, including condos across the street. Preparing this at hand will help you make a fair comparison of prices–a new condo launch is commonly priced at 10% to 15% more than its older counterparts in the area.
If it costs much more than that, ensure that the developer has a justification you can accept. You can use the data as a bargaining chip as well (e.g. when trying to negotiate for a lower price, indicate that nearby condo units have been falling in prices).
The Normal Progressive Payment Scheme is recently the standard payment scheme used in nearly all new launch condominium projects. Knowing how the progression of payments work will help plan your cash flow for your property purchase.
Upon the selection and confirmation of your choice unit:
- In favour of the developer’s project account, payment of five per cent has to be made in exchange for the Option to Purchase (OTP)
- Within two weeks, the developer will send the Sales and Purchase Agreement (S&P) to your address
- Upon the date of receipt of the S&P, you’re given three weeks to exercise the contract at the office of your solicitor. If the contract is not exercised, 75 per cent of the initial Option Fee paid will be refunded to your account.
- After exercising the agreement, the ABSD and Stamp Duty will be payable within 14 days from the date of exercise.
- The remaining 15% of the down payment billed within eight weeks from the initial OTP date.
Remember: if you feel at all confused, do not sign anything. Give yourself time to examine the schemes and come up with questions. Some mortgage brokers will go out of their way to provide you extra insight and compare what you are paying to a regular bank loan if you seek their help.
Consider doing that before placing your cash down. If you’re not in a stage in your life when it makes sound financial sense to buy a condominium, then you shouldn’t jump in, regardless of how great a bargain the condo is.
Prior to the launch of a new condominium, a preview period of 1 to 2 weeks will be allocated to visit the showflat and feel the prices and unit sizes. During this Singapore condo launch date, buyers who preview the showflat are permitted to register for a non-obligatory seat.
When at the Showflat Itself
Ignore the Furniture
When viewing the showflat, try to picture where your stuff will be in the bare-bones condo unit. For instance, work out where your study will be, where your children’s bedrooms will be, which room you’ll use for storage, etc.
Check the Lighting
Showflats are permanently bright and always lit with artificial lights. It might be challenging to get the idea of how much natural light each room would get. Check the windows’ size and where they are located, so you can judge for yourself how much light you would get when the upcoming condo project is completed.
Don’t forget to compare it with the facing of your choice unit, to check if it will feel burnt of the hot sun.
Look at the Layout
Singaporeans generally like regular showflat layouts. This is because they help with the placement of furniture and they flow better. A lot of design tricks can help minimise the odd dead corner of the apartment, such as covering it up with vases and plants or hiding it with a partition.
Buyers should always check the official floor plan to inspect if there are any odd corners. Sharp triangular corners, in particular, are considered bad Feng Shui. Even if you do not believe in Feng Shui, it could affect resale potential in the future.
Confirm which Appliances are Included
Every showflat kitchen has winking appliances. However, home-buyers should always inspect what is actually provided since not all the appliances on display might come with the completed unit. NUmerous developers leave out refrigerators and washer-dryer machines, which could cost thousands of dollars.
Do note the labels of these appliances as well. Developers will often label an item that’s included. If you don’t see any labels, ask the showflat agent.
Appliances need to be changed if they can’t fit, even if buyers have existing ones. In addition, many condominiums have rules against hanging clothes to dry on the balcony. Thus, a washer-dryer unit, which costs more than a regular washing machine, is a necessity.
Check the Bathroom Fittings
Many showflat bathrooms are designed to look like swanky spas. However, inspect to see what is really provided. Wall cabinets are usually might come in a plainer form or not provided that what is displayed.
Fittings like the toilet, shower, sink, and bathroom trap should be of good quality, too. Also, look for windows in the bathrooms; they’re essential to avoid humid weather from causing mould.
Ceiling ventilation should be provided for bathrooms without windows –but that requires more maintenance.
Look at the Actual Floor Layout
Although mock-up models look nice, they are more for sale purposes than to rely on for making purchase decisions.
To know how far apart each tower block will be, look at the actual development floor plans, where facilities like the refuse collection point will be, and how big the communal spaces are. You should also inspect details like where your windows will be facing and the width of the corridor.
Look out for the small details that present a developer’s commitment to quality. Showflats are meant to showcase all a developer has to offer.
Questions You May Have
Ask About the Difference with Other Units
You’re already aware of the unique selling points of new launch condos; now determine how much you are paying them. On a per-square-foot basis, what is the price difference between your building with the neighbouring development? Which have mostly the same amenities? Within the same building, what is the price difference of the particular unit you are looking at, versus other units in the same stack?
Inquire About Maintenance Fees
Most condos charge maintenance fees every quarter. This will come to approximately SGD 1,200 to SGD 1, 400 on a quarterly basis for the average condo unit. Higher-end luxury options often cost SGD 8,000 per quarter and up. So make sure the figure offered is not something that will make your eyes bulge.
In any case, it is suggested you give yourself at least 2 to 3 days to think things through before you make your deposit. Do this even if you have already viewed other properties and pegged it down to “the one”.
Ask About the Amenities and Other Services
Ask if there are going to be clinics and childcare centres or commercial spaces with a grocery. Some condos have these on the ground floor, and they provide a huge convenience if you are in a fringe location. Also, try to look for units that are closer to the facilities you use most often. For instance, if you like lounging in high areas, then perhaps you can pick a unit on a floor near the sky garden.
When choosing a new launch condo in Singapore, take your time and do not rush into it until you have come to an informed decision and you are satisfied that you are fully aware of the pros and cons. Do not allow the fear of missing out or ‘kiasu’ in you to pressure you into committing. Happy house hunting!
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