By Winfred Quek · CEA R073319H · Published 24 August 2026
Rates and thresholds change. The current figures are kept in one place: the Singapore property rules reference.
Facts verified against the sources linked throughout this guide.
Holding an Option to Purchase feels like the hard part is over. In some ways the opposite is true, the option period is your last window to check everything you cannot undo once you exercise it. This guide covers what should already be settled before you sign, so exercising is a formality rather than the moment you discover a gap.
What exercising actually commits you to
Exercising the Option to Purchase creates a binding contract. Before that point you can generally walk away and forfeit only the option fee, but once you exercise, backing out typically means forfeiting your full deposit and can expose you to further claims from the seller. The deposit paid on exercising is usually 5 percent of the price in total, made up of the 1 percent option fee already paid plus roughly 4 percent more on exercise. Our guide to the next 8 weeks after exercising covers exactly what follows once you sign, worth reading before you do so the sequence afterward is not a surprise.
Confirm your financing has moved past Approval in Principle
An Approval in Principle is a realistic preview of your borrowing ceiling, not the bank's final loan offer. It is based on your documented income, debt and credit record at the time you applied, and it typically stays valid for around 30 days. Before you exercise, confirm with your bank where your actual loan application stands, and do not treat an Approval in Principle from weeks earlier as equivalent to a confirmed offer. Our AIP / IPA glossary entry explains the distinction, worth revisiting at this stage even if you read it before you started viewing.
Check the bank valuation before you exercise, not after
The bank lends against the lower of your agreed price or its own valuation. If the two differ, the resulting Cash Over Valuation gap has to be funded in cash, it cannot be covered by the loan or by CPF. The real protection is timing: get the valuation checked while you still hold the option and before you exercise it, so a low figure is a negotiating point rather than a binding obligation you have already accepted. Our guide to a low bank valuation covers what your realistic options are if the figure does come back short, worth reading before the option period is nearly over rather than after.
Engage your lawyer early
A conveyancing lawyer is effectively essential once a bank is financing you, since the bank requires legal representation to complete the transaction. Appoint your lawyer early in the option period rather than in the final days before your exercise deadline, so they have time to raise anything that needs attention before you are legally committed. Our conveyancing guide covers what a lawyer actually does and roughly what the fees look like, worth confirming before you need to move quickly.
Have the cash ready for exercise and stamp duty
Buyer Stamp Duty, and Additional Buyer Stamp Duty if it applies to your profile, must be paid within 14 days of exercising the Option to Purchase, in cash or CPF, and it cannot be financed by your loan. Treat this as a hard deadline you prepare for in advance rather than a bill you deal with once it lands, IRAS applies penalties for late payment. Our Buyer Stamp Duty guide has the full tier table so you can calculate your own figure and have the funds set aside before you sign, not after.
What the first week after exercising typically looks like
Once you exercise, completion is typically scheduled somewhere between 8 and 12 weeks later for a private resale, with the exact date negotiable between buyer and seller. Within that runway, the first week usually carries the heaviest load: your conveyancing lawyer is formally instructed, and Buyer Stamp Duty, along with any Additional Buyer Stamp Duty, is paid. Everything you settle during the option period, financing, valuation, your lawyer, is what allows that first week to run smoothly instead of becoming the moment you are scrambling to catch up. Our guide to the next 8 weeks sets out the full week by week sequence, worth reading in full once you have exercised so you know what your lawyer and your bank are each doing at every stage.
Common gaps that surface too late
The buyers who run into trouble at this stage are rarely the ones who did no preparation at all, they are usually the ones who did some, and assumed it covered more ground than it actually did. An Approval in Principle from six weeks earlier gets treated as a done deal, when the bank has not actually confirmed the loan against this specific unit. A valuation gets left until after exercising because the option period felt like it was moving fast enough already. A lawyer gets engaged only once the exercise deadline is a few days away, leaving no time to flag a title issue before you are contractually committed. None of these gaps are visible until they matter, which is exactly why working through this checklist deliberately, rather than assuming the pieces are in place, is worth the hour it takes. A short conversation with your bank, your lawyer and, if you have engaged one, your agent, in the same week usually surfaces any of these gaps quickly, well before the exercise deadline forces the issue.
Exercising the Option to Purchase should be the moment everything above is already settled, not the moment you start settling it. Financing confirmed past Approval in Principle, the valuation checked, a lawyer engaged, and the cash for exercise and stamp duty ready. Get there before you sign, and the weeks that follow run the way our other guides describe.
Printable OTP exercise readiness checklist
Everything above, condensed to one page for the option period. Print this checklist
Financing
- Actual loan application status confirmed with your bank, beyond the original Approval in Principle
- Bank valuation checked against the agreed price, while you still hold the option
Legal & paperwork
- Conveyancing lawyer engaged and briefed early in the option period
- Buyer Stamp Duty, and any Additional Buyer Stamp Duty, calculated in advance
Cash ready
- Exercise deposit, roughly 4 percent on top of the 1 percent option fee, set aside
- Stamp duty funds set aside for payment within 14 days of exercising
Close to exercising and want a second check?
The option period moves fast once your offer is accepted. A Property Portfolio Analysis confirms your numbers hold up before you sign, not after.
Book a free 30 minute call WhatsApp WinfredFrequently asked questions
What actually happens when I exercise the Option to Purchase?
Exercising creates a binding contract between you and the seller. Before exercising you can generally walk away and forfeit only the option fee, but after exercising, backing out typically means forfeiting your full deposit.
Is my Approval in Principle enough to exercise?
An Approval in Principle is a preview of your ceiling, not a confirmed loan offer. Before you exercise, confirm with your bank where your actual application stands rather than relying on an approval from weeks earlier.
Can I still check the bank valuation after I exercise?
You can, but the protection is weaker, since you are already bound to the price by then. Checking the valuation while you still hold the option, before exercising, means a low figure is still a negotiating point rather than an obligation you have already accepted.
When should I engage my conveyancing lawyer?
Early in the option period, not in the final days before your exercise deadline. A lawyer engaged early has time to raise anything that needs attention before you are legally committed.
What payments are due immediately after I exercise?
Buyer Stamp Duty, and any Additional Buyer Stamp Duty that applies to your profile, must be paid within 14 days of exercising, in cash or CPF, and it cannot be financed by your loan.
Sources & References
Winfred Quek is an Associate Marketing Consultant at Crestbrick Pte Ltd (CEA Licence No. L31010886H), CEA Registration No. R073319H. The information on this page is general and does not constitute financial, legal or tax advice. Always conduct independent due diligence and consult qualified professionals, including your conveyancing lawyer, before making any property decision.