HDB Resale: Navigating your Home-Buying Journey

Here’s a quick look at all the steps we’ll be covering:

If you are a first-time homebuyer in Singapore who has already made the decision on picking an HDB flat, you’re probably deciding between getting a BTO or a resale flat.

And if you’re reading this, chances are you’ve already made the decision to go with the resale flat route, so here’s a step-by-step guide for an in-depth walkthrough of the HDB resale buying process.

From finding out if you’re eligible to obtain an Option to Purchase (OTP) to finally getting your hands on your own HDB resale flat, we’ve got you covered!

The whole process is far simpler than you probably think. The bulk of the steps can actually be done on a single website, the HDB Flat Portal.

First things first…

Step 1: Eligibility Check: Apply for an HDB Financial Eligibility (HFE) Letter

• Eligibility conditions for Married couples / Families

Citizenship	You must: – Be an SC or SPR – Include at least 1 occupant who is an SC or SPR For SPR households (i.e., an SPR household with no SC owner): – All applicants and core occupiers must have SPR status for at least 3 years
Age	At least 21 years old
Monthly household income ceiling	No income ceiling

• Grants available (as shown in table) and eligibility criteria

When buying a resale flat, you can use the CPF Housing Grants (that could go up to S$160,000 for a resale flat) to offset the cost of your purchase. Here are grants that might be available to you:

• Apply for an HDB Flat Eligibility (HFE) Letter.

Step 2: Planning your finances

Payments that you will have to make for a Resale Flat purchase include:

• Initial payment
• Stamp and legal fees
• Resale application administrative fee
• Secure Option To Purchase (OTP)
• Cash payment for balance purchase price*
• Processing fee for Request for Value
• Fire insurance
• Additional miscellaneous costs

Housing loan options (HDB or FI)

*The balance purchase price here depends on whether you choose to take up a HDB Concessionary Loan or bank loan. Taking either the HDB loan or bank loan can cover up to 75% of the flat’s valuation or price, whichever is lower. The remaining 25% can be paid off through a combination of your CPF Ordinary Account (CPF-OA) funds, or in cash.

All bank loans have a minimum downpayment of 5% that need to be paid in cash.

Additionally, if you take up a bank loan, you should get a In-Principle Approval (IPA), which states how much they’re willing to lend you. Once you know how much the bank is going to lend you, you can prepare the downpayment before you actually commit to anything.

With all these payments in mind, when deciding between the pool of suitable flat choices within your budget, you’ll need to understand the different ways you can pay for your flat, and the limitations for each.

 

Can I pay for my resale flat with my CPF savings?

• Initial payment in whole or in part (depending on if you an HDB or bank housing loan)
• Partial or full payment for the flat purchase
• Monthly mortgage installments
• Legal fees (Depending on the law firm)
• Stamp duties

Important Tip: Do note that due to the CPF Housing Withdrawal Limit (120% of your flat’s value) and the limitations regarding flats with Shorter Leases (i.e. less than 60 years) you may not be able to use as much of your CPF savings on your resale flat purchase as you may have hoped.

Also, you can use your CPF to purchase a flat even if there are only 20 years left on the lease, but not if there’s less than that.

Note that most banks won’t approve a loan for properties with 30 years or less on the lease.

Step 3: Choosing your HDB resale flat

Now, you are ready to start combing the various avenues for your HDB resale flat!

Start by researching and shortlisting a few neighbourhoods you want to live in on 99.co HDB Resale Flat Listing Portal. (Tip: Choosing an HDB flat within 4km of your parent’s place – or living with your parents – gives you the opportunity to apply for the HDB Proximity Housing Grant (PHG) of up to S$30,000)

You can then use the comprehensive filter on the portal to customize to your property needs (you can even map out your own specific area of interest such as MRT stations, Schools and Travel Time) to find HDB resale flats that are listed for sale.

Map view:

Step 4: Receive the HDB Option to purchase (OTP) from the seller and exercise it

Once you have come to an agreement with the seller with regards to the sale price, they will then offer you an Option to Purchase (OTP).

*Note: This comes with an Option fee (not more than S$1,000), which is a deposit to secure the OTP. This allows you to “chope” (call dibs on) the flat at the agreed upon price.

After you have been granted the OTP, apply for a valuation of the flat via the HDB website, by the next working day.

Remember that you have already agreed on a price with the seller and secured the OTP; so if the asking price is higher than the HDB valuation, the difference is paid in cash (this is called Cash Over Valuation, or COV).

A valid valuation report is necessary if you are taking a loan to finance your purchase (for both HDB or bank loan) or if you are using your CPF to either buy your flat or for your loan installments.

If you’re satisfied with the valuation and want to proceed with the purchase, you’ll do so by exercising the OTP within a 21-day window (up to 4pm on the date of expiry). You’ll also have to pay a deposit of no more than S$5,000 (this includes the Option Fee that you have paid earlier).

Once the 21 days lapse without you paying the deposit, the seller releases their flat on the open market again, and your initial offer is no longer valid. 

Worse still, the seller gets to pocket your Option Fee!

Step 5: Submit resale application to HDB

Once you have exercised the OTP, both you and your seller have to submit your respective portions of the resale application separately, within 7 days of either submission. (If the seller submits first, you have seven days to submit your portion and vice versa.)

Step 6: Attending the resale completion appointment

The next thing is definitely the most exciting… collecting your keys! Head down to HDB Hub in Toa Payoh and attend the Resale Completion Appointment with the seller and get the keys to your new home!

Some things to take note before attending the appointment:

• Arrange with seller to inspect the flat before the appointment
• Bring the necessary documents

During the appointment, you will:

• Sign the mortgage document/ agreement (if you are taking an HDB housing loan)
• Acknowledge the receipt of the keys to the flat
• Pay the apportioned property tax to the sellers
• State how you will pay the first month Service & Conservancy Charges

Step 7: You’ve got your house… now what?

That’s really the entire HDB resale home-buying process, from deciding that you want to get a resale over a BTO, to moving into your new home. The entire process will take you roughly two months from start to completion.

Additionally, you should begin exploring renovation options (e.g. speaking to a contractor or sourcing for the cheapest renovation loan) before key collection. Getting the renovation works started as soon as you collect your keys can help you to reduce the wait time before you actually move in.

Finally, there are some other considerations that you have to take note of after getting your flat, such as fire insurance, and choosing whether to service the loan with cash or CPF. Make sure to stay informed of post-sales conditions such as MOP and resale levy.

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What’s the most difficult part about buying a HDB resale flat? Let us know in the comments section below.