bukanmain:
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QUOTE(bukanmain @ Dec 17 2010, 02:59 AM)
Hye guys!
Heres the problem Ive asked around even few of my "lawyer" friends but they couldnt give me a straight answer.
I want to buy a 300k worth condo and im a cash buyer.Last time i bought a house from family member the law firm gave us this break down.
1. upon signing SPA 10%
2. 6 months period to pay out the balance (90%)
Now I want to know if the 6 months period can be longer or thats the maximum period for the 90% balance?
The reason why i ask this not due to money issue/installment payment is simply because within 6 months i can invest the 90% in lot of stuff and regenerate more money with the money.
Hope you guys can give a decent answer.
Thanks in advance!
The 6 month duration could be a rough figure as the property in question may have been a leasehold property of which the transfer to the purchaser is subject to the State Authority's consent.
Coming to your case in hand, the procedure would be like this:
* assuming that property is freehold, has strata title, that the vendor is represented by a solicitor and that vendor has an existing loan, hence the property is still encumbered (charged to the bank):1) Upon signing the SPA - pay 10% to the vendor's solicitor - after that your solicitor will lodge a caveat upon the title to protect your interest;
2) Since you're buying cash, you would need to deposit the balance 90% in your solicitor's client's account;
* This is important as you are not obtaining a loan, and as such, the 90% balance would be the balance purchase price. 3) The vendor's solicitor would obtain a redemption statement from the vendor's existing financier to find out the sum needed to redeem (loosely speaking, 'to settle') the loan;
4) Once the redemption statement is out, it will be given to your solicitor, and your solicitor would forward a cheque to the vendor's solicitor to make the necessary payment to redeem the loan using the money which you had deposited in the client's account;
5) Once that is done, the vendor's solicitor will forward to existing financier the said cheque together with a discharge of charge to be executed by the financier;
6) Once the cheque is cleared, the financier would return the original security documents and the duly executed discharge of charge back to the vendor's solicitor, who would then forward it all, together with the fees for registration of the discharge of charge to your solicitor;
7) Your solicitor would then proceed to withdraw the caveat, discharge the charge and present the memorandum of transfer (MOT) to register the title in your favour;
8) Once the MOT has been duly presented for registration, it would be safe for your solicitor to pay the balance purchase price (less redemption sum already paid earlier) to the vendor, and you can collect your keys to your new home.
Quite straightforward,right? For such SPAs, the completion date will be 3 months from the date of signing, and a further 1 month extended completion date upon expiration of the said 3 months. During the extended completion date, you would have to pay 8% of the balance purchase price being late penalty interest. This is normally called '3+1'
But you would have to bank in 90% immediately after signing the SPA. This is avoid any complications in the future, eg if you only pay 60% and then an emergency occurs and the balance you had in hand need to be pumped in to solve the problem. A prudent solicitor would demand for 90% to be banked in before proceeding further in cases of a cash purchaser.
Hope the above helps
Dec 16 2010, 05:23 PM
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