Signing the Offer Letter/Booking Form (Letter of Interest)
When a buyer is interested in your home, the first step is signing the offer letter or letter of interest. The buyer typically pays around 3% of the selling price as a sign of their commitment to purchasing the property. This payment not only shows the buyer's serious intent but also provides some protection to the seller if the buyer backs out. However, it is better if this money is paid to a neutral third party, such as a lawyer or real estate agent, to ensure the transaction's legitimacy and avoid the risk of fraud.
Loan Application and Sale & Purchase Agreement (SPA)
After the offer letter is signed, the buyer will apply for a home loan. This is a critical step, as the bank’s loan approval will determine whether the home purchase can proceed. This process usually takes about 14 to 21 working days. If documents are incomplete, it can take longer. Once the loan is approved, both buyer and seller sign the Sale & Purchase Agreement (SPA). This document is a binding legal agreement outlining the terms and conditions of the sale.
Facilitating the Valuer to Inspect the Home
After signing the SPA, the bank appoints a valuer to officially assess your home. This valuation is crucial because it helps the bank determine the market value of the house and whether it aligns with the buyer’s requested loan. The valuer typically visits the home for a physical inspection, which takes around 30 minutes. At this stage, the valuation typically won't change drastically unless there are major, unforeseen issues.
