You will be able to list the professional fees and required cover at completion.
A week before completion, Farah's list of things to pay besides the flat itself ran to eleven lines. The lawyer she had expected. The fire insurance policy the bank insisted on, and a second insurance form from CPF Board, came as news. And she still couldn't decide about the mortgage insurance plan an agent had pitched at the viewing.
Completion is where the professionals and the paperwork come in. This lesson sorts out which of them you must have, which are your choice, and how to keep the fees from surprising you.
Buying property means conveyancing: the legal work of transferring ownership into your name and, where there is a loan, registering the bank's or HDB's mortgage over the home. A lawyer does it for you.
For an HDB resale, buyers taking an HDB loan, or no loan at all, can generally use HDB's own conveyancing service or a private law firm. Buyers taking a bank loan usually need a private law firm, and banks often have a panel of firms they work with. The firm handles the stamp duty, the CPF applications, the loan documents and the completion itself. For private property, every buyer uses a private law firm.
Fees vary with the property, the loan and the firm. Ask for a written quote that lists the legal fee and every disbursement, meaning the third-party costs the firm pays on your behalf, such as search fees and registration fees. If your bank offers a legal fee subsidy, check whether it comes with a clawback, as lesson 5.3, Lock-ins, clawbacks and the real cost of a package, warned. CPF can usually pay legal fees for the purchase.
Farah and Hakim's quote, as an example, came to about S$3,000 with disbursements. They asked two firms from their bank's panel and took the one whose quote listed every item.
Two kinds of cover are usually compulsory, and which ones apply to you depends on how you buy.
Fire insurance protects the building structure against fire damage. HDB requires borrowers with an HDB loan to take its own fire insurance for the flat. A bank makes fire insurance a condition of its loan, and the offer letter says what it must cover and whether you can choose your own insurer. Fire insurance covers the structure, not your renovation or belongings, which need separate home contents insurance if you want them covered.
The Home Protection Scheme is a mortgage-reducing insurance run by CPF Board. Owners who use CPF for the monthly instalments on an HDB flat generally have to be covered by it, whether the loan is from HDB or a bank. Should an insured owner die or become permanently incapacitated, it pays off the remaining loan for that owner's share, up to the limits of the scheme. The premiums can be paid from CPF. Check whether it applies to you and how the cover is shared between owners on the CPF Board website.
For Farah and Hakim, both applied: fire insurance for the bank loan, and the Home Protection Scheme because they planned to pay S$1,500 a month of the instalment from CPF.
Banks and agents often suggest mortgage-reducing term insurance, a life policy whose cover falls in line with your loan balance. It isn't required for a bank loan. Whether you need it depends on whether your existing life cover already protects your family from the loan, and the Home Protection Scheme may already cover part of the risk.
Choosing life cover is taught in Insurance Decoded. Lesson 2.2, Subtract what already covers you: DPS, HPS, group plans and savings, shows how to count the Home Protection Scheme in your cover, and lesson 2.3, Set the term from your youngest dependant and your loan, deals with cover sized to a loan. A viewing is the wrong place to decide; do that sum first and buy afterwards, if at all.
Around completion, the bills arrive from several places. A typical list includes the legal fee and disbursements, a valuation fee, HDB or registration fees, fire insurance, the first Home Protection Scheme premium, stamp duty if it hasn't been paid, and for a bank loan, any fee that wasn't covered by a subsidy.
Some of these come from CPF, some must be cash, and they don't all arrive on the same day. Your lawyer should give you a completion statement showing what is due, from which source, and when. Read it line by line before the appointment, and query anything you don't recognise.
The single best habit at this stage is to ask for every fee in writing before you sign anything that commits you to it. That includes the lawyer's quote, the bank's list of fees and insurance conditions, HDB's fees, and any quote from an insurer.
A written fee can be compared, questioned and checked against your budget. A fee mentioned in passing tends to become a surprise later. Farah's eleven lines, each with a source beside it, became the fees section of their purchase timeline. In the activity below, list every fee and policy you would need at completion, and who quoted or set each one.
List every fee and policy you would need at completion and who quoted or set each one.
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