Should I sign SPA or Letter offer first?


Should I sign SPA or Letter offer first?


I believe everyone will encounter this issues when they went through house purchase process. Whether to sign Sales purchase agreement contract first to secure the house or wait for Loan letter offer first?

Sales purchase agreement is a contract whereby borrower signed as an agreement to purchase stated property, if seller suddenly withdraw from this deal, they can’t retrieve their booking fees 3% deposit back while incurring other penalty fees.

Of all the disadvantage, advantage of signing SPA first, it gives seller the confidence that you are eager to purchase their property, shows you are serious and they will focus on this deal rather other keen buyer.

Loan letter offer is a document where you will need to sign to secure the loan financing by the bank. It takes around 4-7 days for bank underwriter to approve your loan and +1 day to issue the loan letter offer.



Let see few scenarios below regarding this issues:

Scenario 1:

Sign SPA first


– You will secure the property purchase rights

– seller can’t double cross you with other higher bidder

– you will have a piece of mind


– You can’t change the unit of the property after signing this

– If your loan fail or unsuccessful or receive unfavorable package for some reason, seller would have the rights to keep your booking fees 3%

– You are obligated to purchase this property or be penalized if change of mind

Scenario 2:

Sign Loan Letter Offer first


– You aren’t obligated to purchase the property if you found a better deal out there (however, you need rejection letter and in the booking form stating ” 3% booking fees will be waived if loan rejection occurred”)

– If your loan application receive unfavorable package due to weak profile or rejected, you can discuss with the seller and maybe walk off from the deal

– More transparent as in knowing the loan deal you are receiving from each preferred banks before committing your self in purchasing the property


– Seller might double cross you and sell the unit to other keen highest bidder.

Do have a fresh comparison on the pros and cons and do conclude the best scenario applicable to yourself.


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