Together with the option fee, the exercise fee makes up the standard 5 percent that a private resale buyer pays before exercising, which combined with BSD due within 14 days of exercise, means a buyer needs meaningful upfront cash or CPF ready well before the loan disburses.
Once exercised, the transaction becomes the Sale and Purchase Agreement, a fully binding contract. Cancelling after exercise is legally complex, requires both parties' agreement, and typically results in the buyer forfeiting the exercise fee and facing liability for the seller's legal costs.
For HDB resale, the exercise fee is agreed between the parties rather than fixed as a percentage, and is paid alongside submission of the joint resale application to HDB. Always confirm the exact exercise fee and option fee in writing before signing, since these figures sit outside the standard HDB or bank loan financing and must be funded separately.
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Book a free 30 minute callWinfred Quek is an Associate Marketing Consultant at Crestbrick Pte Ltd (CEA Licence No. L31010886H). CEA R073319H. This page is for general information only and does not constitute financial, investment, or legal advice. Verify current figures with IRAS, HDB, CPF Board, or MAS before making any decision.