How much is the option fee for a private property in Singapore?

It is typically 1% of the purchase price, though it can be negotiated. On exercising the option the buyer usually tops up to a 5% deposit.

What happens if the buyer does not exercise the OTP?

The option simply lapses at the end of the option period and the option fee (typically the 1%) is forfeited to the seller. The larger deposit only comes into play once the option is exercised.

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Paper 2 · Private Property Sale

The Option to Purchase (OTP) Explained — Singapore

For a private resale, the Option to Purchase (OTP) is the contract that locks the deal in place before the formal Sale & Purchase Agreement. It gives the buyer an exclusive right to buy within a set window. The RES exam tests the mechanics and the money at each stage.

The stages, with the money

Stage	What happens	Money
Grant of OTP	Seller grants the option; buyer gets exclusive right to buy	Buyer pays Option Fee ≈ 1%
Option Period	Commonly 14 days (negotiable, e.g. 21). Seller can't sell to anyone else	—
Exercise	Buyer signs the OTP to proceed	Top up to a 5% deposit (i.e. +4%)
Completion	Title transfers, keys handed over (~8–12 weeks later, via lawyers)	Pay the balance 95% + stamp duties

If the buyer doesn't proceed

If the buyer lets the option lapse (doesn't exercise within the period), the OTP simply expires and the Option Fee (~1%) is forfeited to the seller — nothing more. The 5% deposit only becomes relevant once the option is exercised.

The trap

If the buyer walks away before exercising, only the 1% Option Fee is forfeited — not the full 5%. Exam questions bait you with “how much does the buyer lose?” — it's the 1%. (Note: the HDB OTP works differently — see the HDB resale page.)

Exam takeaway

Keep the timeline straight: Option (1%) → Exercise (top up to 5%) → Completion (balance 95%). The Option Period is the window to exercise, not to complete — completion is a separate, later stage.

Common questions

How much is the option fee for a private property in Singapore?: It is typically 1% of the purchase price, though it can be negotiated. On exercising the option the buyer usually tops up to a 5% deposit.
What happens if the buyer does not exercise the OTP?: The option simply lapses at the end of the option period and the option fee (typically the 1%) is forfeited to the seller. The larger deposit only comes into play once the option is exercised.

Keep learning

Study material aligned to the public CEA syllabus. Not financial or legal advice — verify current figures with the relevant authority (IRAS, HDB, CEA, MAS).