Tricia Song, research director at Colliers International, believes the ARU phase will provide more accurate sales figures. «In July, 1,080 private homes without ECs were sold by developers. If, in August, we compare the sales of each project with those of July, there is a gap of 127 units that seems to have been returned during the month. Typically, a developer of a private residential project spends an OTP after a buyer has paid a booking fee equivalent to 5 percent of the purchase price of a property. The intended buyer must exercise the OTP before it expires, by signing the sales contract and returning it to the developer. If the buyer does not exercise the OTP, 25 per cent of the booking fee can be waived to the developer. As the booking fee is usually 5 percent of the selling price, the dilapidated amount is 1.25 percent of the total house price. «However, we found that there have been several instances where the OTP is distributed repeatedly to the same or to buyers for the same unit, which significantly extends the option period,» said Ms. Ling of the ARU.
Therefore, at the request of such buyers or developers, the Authority is prepared to extend the validity of the OTP up to 12 weeks from the date of the OTP, subject to the agreement of the buyer and developer. Those who wish to apply for an extension of the validity of the OTP can submit their application to firstname.lastname@example.org with a copy and an expiry date of the OTP, as well as reasons that require more time to exercise the option. If the buyer does not make the option on time, the promoter will lose a quarter of the booking fee – which is 1.25 per cent of the purchase price. «Of course, there are real needs, such as.B. Buyers may need more time to complete the sale of their existing property before exercising the OTP. In these cases, URA now allows the validity of the OTP to be extended for up to 12 weeks, subject to application and mutual agreement from developers and buyers,» Song explains. «The need for greater financial discipline in property purchasing decisions is particularly important, given the current economic situation in which workers face uncertainties in the labour market,» said URA. «Hong Leong had a strict no-Reissue policy.
This means that all buyers would be required to exercise their options within 3 weeks of the sale and sale agreement,» he said. We found that monthly developer sales typically have 100-130 units to «return,» probably due to the indefinite reissue of OTPs, she told the Straits Times. This last stage of the ARU aims to curb a practice in the real estate market, which should inflate sales of private homes, while encouraging financial prudence when buying a property in the midst of a fragile economy and a precarious employment climate. The Authority added that buyers should only commit to buying real estate if they are prepared to exercise the OTP within the time frame.