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Resale vs. Subsale Condo Units: Know the differences

Shelwyn @ SGPD — Thu, 23 Nov 2023 06:22:07 +0000

What are the key differences between a resale and subsale condo unit?

Resale:

A resale unit is one that has already been owned by the first or subsequent buyers, typically has been lived in either by the owners or tenants and is currently being sold to a new buyer in the secondary market.
Resale properties may vary in age and condition, and buyers can inspect them to assess their condition before making a purchase decision.

Subsale:

A subsale unit, on the other hand, is a property that is not sold by the original developer but by a buyer (the current owner) who has previously purchased the property from the developer but wishes to sell it before taking possession or ownership.
Subsale properties are typically brand new, as they have not been occupied or lived in, and they may or may not yet be constructed or ready for occupancy at the time of the subsale.

Are subsale units usually more expensive than a resale unit?

With all factors being equal, yes, subsale units that are ready to be occupied are usually more expensive due to the brand new condition of the unit.

However, this is not to say that you can’t find undervalued subsale units in the market as there may be various reasons as to why subsale owners are selling (eg. cash flow).

What are the pros and cons of a resale vs. subsale unit?

Pros of Resale Units:

Immediate Ownership: You can take ownership of the property almost immediately upon completing the transaction, allowing for quicker relocation or rental income if you plan to lease it out.
Historical Market Data: There’s a wealth of historical sales data available for resale properties in the same development, making it easier to determine fair market values and negotiate prices.
Possibly Lower Price: Resale properties may come at a lower price point compared to subsale properties or new launches.

Cons of Resale Units:

Condition of the Unit: You may need to renovate or redecorate the property to align it with your preferences, which can incur additional costs and time.
Condition of the facilities: There will be wear and tear for shared facilities, and some older developments may have lesser facilities compared to the newer developments.

Pros of Subsale Units:

Brand New: Subsale properties are typically brand new and have not been occupied, ensuring that everything is in new and pristine condition.
Potential for Value Appreciation: Subsale properties in a developing area may have the potential for long-term appreciation in value as the neighborhood grows.
Own a Sold-Out Development: Buying a subsale unit may be the only way if you really like a unit in an otherwise sold-out development.

Cons of Subsale Units:

Possibly Higher Price: Subsale properties may come at a higher price point compared to resale properties or when it was newly launched, particularly if they are in prime locations, sold-out developments or less than 3 years before the owner purchased it as the owner may want to recoup the Seller’s Stamp Duty (SSD).
Wait for Completion: Other than TOP’ed units, subsale properties may not be ready for occupancy until the project is completed, which can result in a longer waiting period.

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SGPD 60-Sec Read: What are Subsale Condo units and what should I know before buying a Subsale unit?

Shelwyn @ SGPD — Wed, 25 Oct 2023 07:02:52 +0000

In a subsale transaction, a buyer purchases a unit or property from an intermediate owner who has already entered into a Sales and Purchase Agreement (S&P) with the developer but has not taken physical possession or ownership of the property. Hence, the subsale unit is typically brand new in condition even though it has had more than one owners.

Your unit is considered a subsale unit as long as it has not reached CSC (Certificate of Statutory Completion), even if it has obtained TOP.

If you are considering a subsale property in Singapore, there are several key factors to be aware of to ensure a smooth and informed purchase process. Here’s what you need to know.

Property Details:

As with any property purchase, understand the specifics of the property, including its location, size, layout, and any unique features.
Review the floor plan, property specifications, and any available documents related to the property.
In some cases, subsale properties may be partially constructed, so verify the completion status and expected handover date.
Check the property’s title deed and ownership status to ensure there are no encumbrances, liens, or legal issues that could affect your ownership.

Legal Advice:

Engage a qualified property lawyer in Singapore to review the sales contract and provide legal guidance throughout the transaction.
You will need to enter a new S&P agreement with the development and this requires your lawyer to draft.

Searching for a Subsale Unit:

When searching for a subsale unit which are not sold-out yet, there may be both developer and subsale listings in the market. Consider your options and compare the prices vs. the unit that are being offered to see what is the best unit for your needs.
Developers who are selling their last few units may sometimes offer deeper discounts but the units may not be choice units hence, look at your subsale options and weigh the pros and cons.

Conclusion

By thoroughly researching, planning, and engaging the right professionals, you can navigate the purchase of a subsale condo unit with confidence and make an informed decision that aligns with your objectives and financials.

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The post SGPD 60-Sec Read: What are Subsale Condo units and what should I know before buying a Subsale unit? first appeared on SGPD.