Option Fee and Exercise Fee: A Private Seller Guide

Quick answer

When you sell a private home in Singapore, the buyer usually pays you an option fee (called “Option Money” in CEA’s standard Option to Purchase) in return for the right to buy at an agreed price within an agreed period. If the buyer exercises the option in time, they deliver the signed option to your lawyer together with a further payment, often called the exercise fee. The option money and that payment together form the deposit, and a binding sale and purchase agreement comes into existence.

If the buyer does not exercise the option in the stated way and time, the standard template says the option becomes null and void and the option money is forfeited to the seller. The amounts, the option period and the completion date are not fixed by the template; they are filled in and agreed between the parties, so check them with your lawyer before you sign.

Illustration of a small stack of coins beside a larger stack of coins, with a blank folded document and a house key on a cream background — Illustration only. The option money comes first; the exercise payment, paid with the signed option, completes the deposit.

Four terms to agree in the OTP

1Option money

The amount the buyer pays you for the option. The template leaves it blank.

2Option period

The date and time the option stays open until, or two weeks from the option date.

3Exercise payment

A percentage of the price, less the option money, paid when the buyer exercises.

4Completion date

The scheduled completion date, or another date the parties agree.

What happens at each stage

Stage	What the standard OTP says	What a seller should confirm
Option granted	The seller offers to sell at the stated price in return for the option money.	Price, option money and buyer details are correct
Option period	The option stays open until the filled-in time and date, or for two weeks, whichever alternative is chosen.	The exact expiry time and date
Exercise	The buyer delivers the signed option to the seller’s solicitors with the exercise payment.	Who holds the payment: you, your lawyer as stakeholder, or the Singapore Academy of Law
Not exercised	The option becomes null and void and the option money is forfeited to the seller.	Your plans if the buyer walks away
Completion	The sale completes on or before the Scheduled Completion Date, or another agreed date.	Loan redemption, CPF refund and your next move fit that date

Based on CEA’s Option to Purchase template for private residential property (Version 1.2, updated 10 February 2021). Your own OTP may differ; your lawyer should review it.

Key takeaways

The option fee pays for the buyer’s right to buy within the option period; it does not by itself create a binding sale.
The sale becomes binding when the buyer validly exercises the option, which under the standard template means delivering the signed option to your solicitors with the exercise payment.
The option money plus the exercise payment together make up the deposit.
If the option is not exercised as stipulated, the standard template provides that the option money is forfeited to the seller.
CEA’s standard template does not fix the option fee, the exercise percentage, the option period or the completion date. Those are filled in for each sale.
Before you issue the OTP, CEA’s seller checklist asks you to verify matters such as mortgage redemption, outstanding property tax and stamp duty, and a foreign buyer’s approval position.

Background

The Council for Estate Agencies (CEA) publishes standard templates for the Option to Purchase (OTP) and the sale and purchase agreement for private residential property. CEA explains that these documents contain general applicable clauses that govern the obligations of sellers and buyers. CEA also encourages buyers and sellers to go through its checklists before entering into a contract to buy or sell private residential property.

The OTP template was created by the Digitalised Property Transactions Workgroup. It states that the Law Society’s Conditions of Sale 2020 apply in so far as they are not contrary to or in conflict with the conveyancing rules it names.

This article explains the money terms of a resale OTP from the seller’s side. It does not apply to buying a new launch unit from a developer, which follows a separate process with a booking fee and a standard developer OTP. That route is covered on the new launch condo page.

Latest guidance

The sources for this article were checked on 3 November 2026. CEA’s OTP template for private residential property is Version 1.2, updated on 10 February 2021. CEA’s checklist for sellers of completed private residential property was created on 28 December 2020. CEA’s page on buying or selling a private residential property was last updated on 22 July 2026, and its page on buying or selling with a property agent on 18 August 2025.

This article does not report a new policy or effective date. Stamp duty rules, including Seller’s Stamp Duty holding periods, should be confirmed on IRAS’s website at the time you sell.

Who is affected

This guide is for owners selling a completed private residential property, such as a condominium unit, apartment or landed house, through a resale OTP. It is most useful when you have received an offer and are about to agree the option money, option period and completion date.

It is also relevant if your sale proceeds need to cover a housing loan or a CPF refund, because the deposit and completion terms affect when and how that money moves. For the wider selling process, see the guide to selling private property in Singapore.

Who is not affected

HDB resale transactions use HDB’s own OTP and procedures. HDB sellers should refer to the HDB selling page.

Buyers of uncompleted units from a licensed housing developer pay a booking fee for a developer OTP on a different standard form. Commercial and industrial property can also involve different contract terms.

This article does not give legal or tax advice for a specific transaction.

What remains unchanged

The price and the money terms of the OTP are still agreed between seller and buyer.
Your obligations under the OTP and any resulting sale agreement are legal obligations. A lawyer, not a property agent, advises on them.
Your housing loan and any required CPF refund still have to be dealt with at completion.
Stamp duty that applies to the transaction still has to be checked and paid as IRAS requires.
No sale price, buyer behaviour or completion outcome is guaranteed.

Planning considerations

1. Agree the option money in writing

The template leaves the option money blank, so the amount is a matter of agreement. Make sure the figure in the OTP matches what was negotiated, and that the buyer named in the OTP is the party you expect to complete the purchase.

2. Be precise about the option period

The template gives two ways to set the period: open until a stated time on a specific date, or until the expiry of two weeks from the date of the option. Know the exact expiry. A buyer who wants a longer period is asking you to keep the property off the market for longer, so weigh that against your own timeline.

3. Decide who will hold the exercise payment

Under the template, the exercise payment can be paid to you, to your solicitors to hold as stakeholders pending completion, or to the Singapore Academy of Law as stakeholder. CEA’s seller checklist suggests stipulating in the OTP your preference to place the option deposit in your lawyer’s conveyancing account or with the Singapore Academy of Law. Discuss this with your lawyer before signing.

4. Check the numbers before you issue the OTP

CEA’s seller checklist lists mortgage liability and redemption, and outstanding property tax and stamp duty liability, among the items to verify before issuing an OTP. It also notes that if the sale may be a negative sale, you may be required to refund the option monies into your CPF account. Get an indicative loan redemption figure and your CPF refund position first. The pre-OTP seller checklist and the sale proceeds calculator can help you organise those figures, but your bank, CPF Board and lawyer confirm them.

5. Ask a foreign buyer about approval early

If the property is a restricted residential property and the buyer is a foreigner, CEA’s checklist advises checking whether the buyer has an approval-in-principle before you enter into an agreement, to avoid a cancellation if approval from the Land Dealings Approval Unit of the Singapore Land Authority is not obtained. The template also contains a clause on the buyer’s application for approval and what happens if it is not granted.

6. Plan for both outcomes

If the buyer exercises, you are committed to completing on the agreed date, so line up your loan redemption and your next home around it. If the buyer does not exercise, the option lapses under the template and you can return to the market. Thinking through both outcomes before signing reduces pressure later.

7. Get help with the wider sale plan

Pricing evidence, buyer screening and timing affect which offer is worth accepting. The private-property selling page explains how Melvin supports the selling process. The OTP itself should be reviewed by your conveyancing lawyer.

FAQ

What is an option fee when selling a condo?

It is the money the buyer pays the seller for an Option to Purchase. In CEA’s standard template it is called the Option Money. In return, the seller offers to sell the property to the buyer at the stated price for the option period.

What is the exercise fee?

It is the payment the buyer makes when exercising the option. Under the standard template it is a stated percentage of the sale price less the option money, and together with the option money it forms the deposit.

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

CEA’s standard OTP template does not fix an amount; it leaves the option money and the exercise percentage blank for the parties to agree. Check the figures in your own OTP with your lawyer.

How long is the option period?

The template allows the option to stay open until a stated time on a specific date, or until two weeks from the date of the option. The period that applies is the one written into your OTP.

What happens if the buyer does not exercise the option?

Under the standard template, if the buyer does not exercise the option in the stipulated manner, the option becomes null and void and the option money is forfeited to the seller.

When does the sale become binding?

The template states that a valid exercise of the option constitutes a valid and binding agreement for the sale and purchase of the property.

Who holds the deposit?

The template allows the exercise payment to be paid to the seller, to the seller’s solicitors as stakeholders pending completion, or to the Singapore Academy of Law as stakeholder. CEA’s seller checklist suggests stating your preference in the OTP.

Is this the same as a new launch booking fee?

No. Buying an uncompleted unit from a developer involves a booking fee and a developer OTP on a different standard form, with its own timelines. This article covers resale OTPs for completed private property.

Official sources

This article provides general educational information based on CEA’s standard templates and checklists. The terms of your own Option to Purchase, and any loan, CPF or tax matters, should be confirmed with your conveyancing lawyer, bank, CPF Board or IRAS before a binding commitment is made.