OTP Explained: Option to Purchase in Singapore

What Does It Mean?

Option to Purchase (OTP)

The Option to Purchase (OTP) is a legally binding agreement giving the buyer the exclusive right to purchase a property within a fixed period (usually 14 days for private, 21 days for HDB). The buyer pays an option fee (typically 1% of purchase price) which is forfeited if the option is not exercised.

Exercise Fee

The exercise fee is an additional payment (typically 4% of purchase price for private property, or up to 9% for HDB) made when the buyer exercises the OTP. Combined with the option fee, it forms the initial deposit before completion.

Worked Example

You find a condo you like at $1,500,000. The seller's agent issues an OTP:

If you exercise the OTP within 14 days, you pay the 4% exercise fee and a binding S&P Agreement is formed. If you let it lapse, you forfeit the $15,000 option fee.

Why It Matters

The OTP is the most critical document in any property purchase. Understanding the option fee, exercise deadline, and your rights during this period can save you from costly mistakes or losing your deposit.

Where to Find This on ShiokNest

• Property buying checklists
• Legal Conveyancing Checklist
• Stamp Duty Calculator
• Total Acquisition Cost Calculator

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This glossary article is auto-generated from ShiokNest's financial data and updated periodically. Rates and figures are current as of March 2026. Check official sources for the latest.