What should you look out for when buying a Building-Under-Construction (Buc) unit?

By EdgeProp Singapore / Redbrick.sg | May 28, 2018 5:45 PM SGT
While properties that are still under construction may have more risks than a completed property, developers often incentivize buyers with per-square-foot discounts, absorption of stamp duties or other administrative costs.
Besides the monetary savings arising from an early purchase, you might benefit from a lower interest rate as well! This is because BUC loan rates are not necessarily higher when compared with loans for completed properties.
This article will help you to make more informed financing decisions when considering a BUC loan. Here are some noteworthy points which you may or may not already know:

1) Minimum down payment

Some of you may be aware that resale private properties require 1% upfront cash in exchange for the Option to Purchase (OTP), followed by another 4% cash to exercise the OTP within 14 days. BUC properties, on the other hand, would need at least 5% of the purchase price — in cash — for the OTP. Should you choose not to exercise the option, 25% of this upfront payment will be forfeited.

2) Transferability

Unlike resale private properties, buyers of a BUC unit are not allowed to transfer the right to someone else. You will have to seek the developer’s approval if you wish to change, or add more names to the property title.

3) Sale and Purchase (S&P) Agreement

Within 14 days from the date of option, the developer will deliver the S&P to you or your lawyer. However, it is recommended to opt for it to be sent to...