For private resale property, the option fee is typically 1 percent of the price, paid in cash to the seller. For HDB resale, the option fee is negotiated between buyer and seller, from as little as S$1 up to a cap of S$1,000.
If the buyer decides not to proceed, the option simply lapses at the end of the exercise period and the option fee is forfeited to the seller and cannot be recovered. If the buyer proceeds, they exercise the OTP by paying a further sum, 4 percent for private resale, or up to S$5,000 for HDB resale, which converts the option into a binding Sale and Purchase Agreement.
For HDB resale specifically, a buyer must hold a valid HFE letter before HDB will allow the OTP to be granted, and there is no statutory cooling off period once exercised on either track.
How much is the option fee for an Option to Purchase?
The option fee is typically 1 percent of the price for private resale and is negotiated for HDB resale, from as little as S$1 up to S$1,000. It is paid to the seller when the Option to Purchase is granted.
| Purchase type | Option fee |
|---|---|
| Private resale | Typically 1 percent of the price |
| HDB resale | Negotiated, from S$1 up to S$1,000 |
| BTO flat from HDB | No Option to Purchase option fee; a BTO is booked with a booking fee |
The option fee is forfeited if the buyer does not exercise the option. The further payment that exercises the option is a separate fee, covered in the exercise fee entry and in the guide to the booking fee, option fee and exercise fee.
Part of the topic guide: Private condo and landed
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Book a free 30 minute call WhatsApp WinfredWinfred Quek is an Associate Marketing Consultant at Crestbrick Pte Ltd (CEA Licence No. L3010886H). 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.