DOES SIGNING AN OPTION TO PURCHASE (OTP) MEAN YOU ARE BUYING THE HOUSE?

An Option To Purchase (OTP) is a commitment device, not an outright property purchase. It offers the buyer exclusive rights to buy a property within a stipulated period, usually after paying an option fee.

If the buyer decides against completing the purchase, this fee is forfeited. It's crucial for potential buyers to understand the financial and legal obligations of an OTP to make informed decisions in the property buying process.

All in all, OTPs are important in the process of buying a new property and are often overlooked by buyers who place greater emphasis on securing a loan. Given the short period offered by the OTP, it would be prudent for buyers to request for an IPA beforehand to ensure that you don’t have to forgo your 1% option fee.

Read more at https://www.redbrick.sg/blog/does-signing-an-option-to-purchase-otp-mean-you-are-buying-the-house/

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