Understanding the HDB resale process can be overwhelming, but don’t worry, we’ve got you covered!
In this step-by-step guide, we will walk you through the entire process, from eligibility criteria to financing options and everything in between.
Whether you’re a buyer or a seller, this guide will provide you with the essential information you need to navigate the HDB resale journey with confidence.
Key Takeaways
| Key Takeaways | Details |
|---|---|
| HDB Resale | Refers to the purchase of an existing HDB flat from its current owner, providing an alternative option for homebuyers who are unable to secure a new BTO flat or prefer a more centrally located or larger unit. |
| Steps Involved in the HDB Resale Process | 1. Find a suitable HDB resale flat and obtain an Option-to-Purchase (OTP). 2. Exercise the OTP within 21 calendar days and pay a 1% option fee. 3. Engage a lawyer for conveyancing and apply for the resale flat through the HDB resale portal. 4. Attend the resale completion appointment to finalize the sale. |
| HDB Resale Timeline | Typically takes between 8 to 12 weeks, depending on the efficiency of the parties involved and the complexity of the transaction. Engaging a property agent is recommended for a smooth completion. |
| Eligibility to Buy a Resale HDB Flat | Must be a Singaporean citizen or a permanent resident. Must form a family nucleus with one other person or up to 6 people. Must meet the HDB’s eligibility criteria, including the minimum occupation period (MOP) and not owning any other property locally or overseas. |
| Financing Options | Buyers can choose between an HDB loan (capped at 90% of the purchase price) or a bank loan (up to 75% of the purchase price, subject to bank requirements) to finance their HDB resale flat. |
| Role of Property Agents | Property agents assist buyers and sellers throughout the process, providing guidance on eligibility criteria, financing options, pricing strategy, and negotiation. Buyers and sellers should consider an agent’s experience, track record, reputation, and CEA registration when choosing an agent. |
| CPF Monies in HDB Resale Transactions | Buyers can use their CPF savings, up to the CPF valuation limit, to finance the purchase. The maximum CPF used is the lower of the purchase price or valuation limit. The apportionment of CPF monies must be agreed upon by the buyer and seller and communicated to their respective lawyers. |
| Importance of Hiring a Lawyer | Hiring a lawyer is crucial to protect your interests, ensure the legality of the transaction, review agreements and legal documents, and provide guidance on legal matters that may arise during the process. |
| Viewing and Assessing Resale Flats | Consider factors such as location, condition, size, and price when assessing a resale flat. Engaging a professional inspector can help identify potential issues or defects before the purchase. |
| Housing Grants for Resale Flat Buyers | Various housing grants, such as the Enhanced CPF Housing Grant, Family Grant, Proximity Housing Grant, and Singles Grant, are available to eligible buyers. Buyers can check their eligibility and apply for grants during the resale application submission. |
| Common Fees and Costs | Fees involved in HDB resale include stamp duty, conveyancing fee, mortgage registration fee, property tax, and fire insurance. Buyers, sellers, and agents must fulfill their obligations in paying these fees promptly and correctly. |
Understanding the HDB Resale Process in Singapore
What is HDB Resale?
HDB resale refers to the purchase of an existing HDB flat from its current owner.
It is an alternative option for homebuyers who are unable to secure a new Build-To-Order (BTO) flat from HDB or opt for a more centrally located or larger unit.
What are the Steps Involved in the HDB Resale Process?
The HDB resale process comprises several steps.
Firstly, the buyer has to find a suitable HDB resale flat and obtain an option-to-purchase (OTP) from the seller.
The buyer then has to exercise the OTP within 21 calendar days and pay an option fee, which is usually 1% of the purchase price.
Next, both parties will engage a lawyer to complete the conveyancing process and apply for the resale flat through the HDB resale portal.
Finally, the parties will attend the resale completion appointment to finalize the sale.
What is the HDB Resale Timeline?
The HDB resale timeline can take between 8 to 12 weeks, depending on the efficiency of the parties involved, and the complexity of the transaction.
It is recommended that buyers and sellers engage a property agent to guide them throughout the process to ensure that the transaction is completed smoothly.
Steps to Buying a Resale HDB Flat
Who is Eligible to Buy a Resale HDB Flat?
To be eligible to buy a resale HDB flat, you must be a Singaporean citizen or a permanent resident.
Foreigners are not eligible to buy HDB resale flats.
You must also form a family nucleus with either one other person or up to 6 people, including yourself.
Additionally, your income must meet the housing and development board’s eligibility criteria.
What are the Eligibility Criteria for Purchasing a
Resale HDB Flat?
The eligibility criteria for purchasing a resale HDB flat include fulfilling the minimum occupation period (MOP), which is typically 5 years from the date of purchase for Singapore citizens/PRs and 3 years for non-Malaysian foreigners.
You must also not own any other property locally or overseas, including private residential properties/land, commercial or industrial properties.
What are the Financing Options for Buying a
Resale HDB Flat?
Buyers may finance their HDB resale flat with either an HDB loan or a bank loan.
An HDB loan comes with a lower interest rate, but the loan amount is capped at 90% of the purchase price.
On the other hand, a bank loan allows buyers to borrow up to 75% of the purchase price, subject to the bank’s requirements.
Exploring the HDB Resale Application Procedure
What is the OTP and How to Exercise It?
The OTP or option-to-purchase is a legal agreement between the buyer and seller, which gives the buyer the option to purchase the HDB resale flat within 21 calendar days at the agreed purchase price.
To exercise the OTP, the buyer has to pay an option fee to the seller, which is usually 1% of the purchase price.
The exercise of the OTP can be done through the HDB resale portal.
What is the Resale Completion Appointment?
The resale completion appointment is when both the buyer and seller meet at HDB’s office to complete the transaction.
During this appointment, the seller will hand over the keys and the buyer will make payment of the purchase price and the conveyancing fees.
Finally, HDB will update the records and transfer the ownership of the flat to the buyer.
What is the Role of CPF Monies in HDB Resale Transactions?
The buyer can use their CPF savings to finance the purchase of the HDB resale flat, subject to the CPF valuation limit.
The maximum CPF that can be used for the purchase is the lower of the purchase price or the valuation limit.
The buyer and seller must also agree on the apportionment of the CPF monies used for the purchase and inform their lawyers accordingly.
The Role of Property Agents in HDB Resale Transactions
Why do you Need a Property Agent for HDB Resale?
A property agent can assist both the buyer and seller throughout the HDB resale process, from finding a suitable unit to completing the transaction.
They can provide valuable guidance on eligibility criteria, financing options, the negotiation of the purchase price, and other important details.
What is the Role of Property Agents in HDB Resale
Transactions?
The role of property agents in HDB resale transactions is to act as a mediator between the buyer and seller, ensuring that the transaction runs smoothly.
They will also provide valuable insights into the current market conditions, advise both parties on the appropriate pricing strategy, and negotiate the purchase price.
How to Choose a Reliable Property Agent?
Buyers and sellers should consider the agent’s experience, track record, and reputation to choose a reliable property agent.
It is recommended that they engage an agent registered with the Council for Estate Agencies (CEA) and with a good reputation for providing quality service and advice to their clients.
Financing Options: HDB Loans and Bank Loans for Resale Flats
What is HDB Loan and How to Apply for it?
HDB loan is a housing loan offered by the Housing and Development Board (HDB) at a lower interest rate to eligible buyers of HDB resale flats.
To apply for an HDB loan, buyers must fulfill the eligibility criteria and provide the necessary documents, such as income statements, identity cards, and CPF contribution history.
What is Bank Loan and How to Apply for it?
A bank loan is a housing loan offered by a bank or financial institution at a higher interest rate than the HDB loan.
To apply for a bank loan, buyers must fulfill the bank’s eligibility criteria and provide the necessary supporting documents, such as income statements, identity cards, and CPF contribution history.
What is the Loan Eligibility and How to Check it?
The loan eligibility is the maximum loan amount that a buyer can borrow based on their income, age, and other factors.
Buyers can check their loan eligibility by using the HDB’s loan eligibility calculator or by contacting a bank or financial institution offering hous
Calculating the Purchase Price: COV, Cash Payment, and Loan Amount
What is Cash Over Valuation (COV)?
Cash Over Valuation (COV) is the amount a buyer pays on top of the HDB’s valuation price.
COV is often a negotiation point between the buyer and seller.
It depends on the desirability of the flat, its location, age, and condition.
How to Calculate the Cash Payment?
After agreeing on the sale price, buyers need to determine their cash payment.
It includes the downpayment and COV.
Buyers can use their Central Provident Fund (CPF) Ordinary account savings, cash, or a combination of both, to make the payment.
Understanding the Loan Amount and Types of Loan
Available
The HDB provides various types of loans to eligible buyers, from HDB housing to bank loans.
The loan amount depends on the buyer’s eligibility and the flat’s valuation.
Buyers can use HDB’s affordability calculator to determine the loan amount they qualify for.
Understanding the Resale Completion Appointment
What is the Resale Completion Appointment?
The Resale Completion Appointment is the final step of the HDB resale process.
Buyers need to endorse all the paperwork, including the mortgage document, proof of fire insurance, and stamp duty.
The flat seller will then hand over the keys, and the buyer can move in.
What Happens During the Resale Completion Appointment?
The Resale Completion appointment typically takes around one hour.
Buyers and sellers need to endorse the documents in person.
They will also need to ensure fire insurance, a mandatory requirement for any HDB flat.
Once all documents and payments are verified, the flat seller will hand over the keys.
How to Prepare for the Resale Completion Appointment?
During the resale completion appointment, buyers and sellers need to bring all the necessary documents, including identity proof, valuation report, and bank statements.
Buyers also need to prepare the downpayment and Cash Over Valuation amount.
Essential Documents for Resale Application Submission
What are the Required Resale Application Documents?
Buyers need to prepare several documents for the resale application, including proof of income, a valuation report, and identity proof.
The full list of documents is available on HDB’s website.
How to Submit the Resale Application?
Once buyers have all the necessary documents, they can submit the resale application online or via the HDB hub.
The application typically takes three working days to process.
Buyers and sellers will receive an SMS update once the application is approved.
What Happens After the Acceptance of Resale Application?
After the acceptance of the resale application, buyers and sellers have 21 days to complete the transaction.
During this period, buyers can arrange for a temporary extension of stay or arrange to move into the new flat.
Buyers and sellers need to be prompt in arranging the flat’s resale completion appointment to ensure a smooth transaction.
Exploring Housing Grants for Resale Flat Buyers
What are the Different Types of Housing Grants Available?
Housing grants are available to eligible buyers, including the Enhanced Housing Grant, Family Grant, and Proximity Housing Grant.
Each grant has its eligibility criteria and grant amount, ranging from $5,000 to $80,000.
How to Check Your Eligibility for Housing Grants?
Buyers can check their eligibility for HDB housing grants using HDB’s eligibility assessment tool.
Eligible buyers can apply for housing grants during their resale application submission.
What is the Application Process for Housing Grants?
Buyers need to indicate their interest in the housing grant during their resale application submission.
After a successful application, HDB will provide buyers with a Letter of Offer.
Buyers can use the grant amount to offset the flat’s purchase price or use it to pay for other eligible expenses.
Common Fees and Costs Involved in HDB Resale
What are the Common Fees and Costs Involved in HDB
Resale?
The HDB resale process involves several fees and costs, including stamp duty, conveyancing fee, mortgage registration fee, and fire insurance.
Buyers, sellers, and agents all have a role to play in ensuring these fees are paid promptly and correctly.
How to Calculate the Resale Price and Selling Price?
The resale price is the amount agreed upon by the buyer and seller.
Sellers need to factor in the flat’s valuation, Cash Over Valuation (COV), and market conditions when determining the selling price.
What are the Property Tax and Processing Fee Involved?
Buyers and sellers need to pay a processing fee to HDB to process their resale application.
Sellers also need to pay property tax and the agent’s commission.
Buyers need to ensure they are aware of all the fees and costs involved in the resale process.
Exploring Housing Grants for Resale Flat Buyers
What are the eligibility conditions for housing grants?
There are several eligibility conditions for housing grants, including your income level, citizenship or residency status, and whether you’ve received a housing grant before.
To be eligible for most housing grants, you must be a first-timer buyer or a second-timer buyer who is downgrading to a smaller flat.
What are the various housing grants available?
There are several housing grants available for resale flat buyers, including the Enhanced CPF Housing Grant, Family Grant, Proximity Housing Grant, and Singles Grant.
These grants can provide significant financial assistance to eligible buyers and help make the purchase of a resale HDB flat more affordable.
How can a buyer apply for housing grants?
Buyers can apply for housing grants through the HDB Housing Portal or by visiting an HDB Branch.
To apply for a housing grant, you’ll need to provide documentation related to your income, eligibility status, and the resale flat you’re interested in purchasing.
Viewing and Assessing Resale Flats: Tips for Buyers
What are the different flat types available in the resale
market?
There are several different HDB flat types available in the resale market, including 2-room, 3-room, 4-room, 5-room, and executive flats.
Each flat type has its own unique features and considerations, so it’s important to understand the differences between them before you start looking for a flat to buy.
What are the key considerations when assessing the resale
flat?
When assessing a resale flat, there are several key considerations to keep in mind, including the flat’s location, condition, size, and price.
It’s also important to consider any upgrades or renovations that may be needed, as well as the possibility of future changes to the surrounding area.
How can you ensure that the flat is in good condition
before making the purchase?
One of the best ways to ensure that a resale flat is in good condition is to engage a professional inspector to conduct a thorough inspection of the flat.
This can help identify any potential issues or defects that may need to be addressed before the purchase is completed.
Hiring a Lawyer for Resale Transactions: Importance and Process
Why is it important to hire a lawyer for the resale
transaction?
Hiring a lawyer for the resale transaction is important because it can help protect your interests and ensure that the transaction is conducted in a legally sound and proper manner.
A lawyer can help review the sales agreement, ensure that all necessary legal documents are in order, and provide guidance on any legal issues that may arise during the transaction.
What is the process of engaging a lawyer for resale
transactions?
The process of engaging a lawyer for resale transactions is relatively simple.
You’ll need to identify a lawyer who specializes in HDB resale transactions, provide them with details related to your purchase, and sign a retainer agreement outlining the scope of the legal services to be provided.
What are the legal matters to take note of in the resale
transaction?
There are several legal matters to take note of in the resale transaction, including the terms of the sales agreement, the ownership and transfer of the flat, and the payment of any applicable fees or charges.
It’s important to thoroughly review all legal documents related to the transaction and seek legal guidance if any issues or questions arise.
Timeline of the HDB Resale Process: From Application to Completion
What is the resale application administrative fee?
The resale application administrative fee is a fee paid to HDB to cover the administrative costs associated with processing your resale application.
The fee is currently $120 for Singapore Citizens and $160 for Permanent Residents.
What is the option grant and option period?
The option grant and option period are important aspects of the resale buying.
The option grant is a fee paid by the buyer to the seller to secure the right to purchase the flat.
The option period is when the buyer has the right to exercise the option to purchase the flat.
What is the payment process for the balance purchase
price and resale fees?
The buyer’s bank typically handles the payment process for the balance purchase price and resale fees.
The buyer will need to apply for a bank housing loan to cover the cost of the flat, and the bank will typically handle the payment of any fees or charges associated with the resale transaction.
Key Considerations for Buyers Looking to Purchase a Resale HDB Flat
What are the financial considerations when buying a resale
HDB flat?
When buying a resale HDB flat, there are several financial considerations to keep in mind.
These include the value of the flat, the amount of your CPF savings, your annual income, and your ability to secure a bank housing loan at a favorable interest rate.
How can you calculate your monthly mortgage
instalments?
You can use a mortgage calculator to estimate your monthly mortgage instalments.
This can help you determine whether you’ll be able to comfortably afford the cost of the flat and make informed decisions about your financial plan.
What are the miscellaneous costs to take note of in the
purchase process?
There are several miscellaneous costs to take note of in the purchase process, including the cost of a fire insurance policy, any necessary renovations or repairs, and the payment of legal and administrative fees.
It’s important to budget for these costs in advance to avoid any financial surprises later on.
Hopeful buyers looking to buy a resale HDB flat in Singapore face a long and complicated process of buying a home.
Understanding the resale buying process, exploring housing grants, hiring a lawyer for the resale transaction, viewing and assessing flats, and taking note of key financial considerations are all important steps in making a successful purchase.
By following this step-by-step guide and seeking professional guidance where necessary, buyers can achieve their dream of owning an HDB resale flat in Singapore!
Conclusion
In conclusion, understanding the HDB resale process in Singapore is crucial for buyers and sellers alike.
From finding a suitable flat to completing the resale transaction, knowing the steps involved, eligibility criteria, financing options, and the role of property agents can help ensure a smooth and successful transaction.
To explore more in-depth information about each aspect of the HDB resale process, we invite you to check out our other blog articles.
Learn about the eligibility criteria, financing options, and the role of property agents in HDB resale transactions.
Discover how to calculate the purchase price, navigate the resale completion appointment, and understand the necessary documents for the resale application.
We also provide insights into housing grants, fees and costs involved, and tips for viewing and assessing resale flats.
By delving deeper into these topics, you can understand the HDB resale process and make informed decisions throughout your buying or selling journey.
Whether you’re a first-time buyer or a seasoned seller, our blog articles offer valuable guidance and practical advice to help you navigate the complexities of the HDB resale market.
Frequently Asked Questions
What is the HDB resale process?
The HDB resale process refers to the procedure of selling and buying a resale HDB flat in Singapore.
It involves various steps that need to be followed by both the buyer and seller.
What is OTP?
OTP stands for Option To Purchase.
It is a legal document that a buyer has to submit to the seller after agreeing on the price of the resale flat.
The seller has the option to accept or reject the OTP within 21 days.
What is the resale procedure for HDB flats?
The resale procedure for HDB flats involves several steps, including submitting the OTP, applying for a loan (if required), paying the deposit, getting the resale application approved by HDB, and completing the transaction by paying the balance amount.
What is the HDB resale timeline?
The HDB resale timeline usually takes around 8 weeks to complete.
This includes the time taken for OTP exercise, loan application, HDB’s acceptance of the resale application, and completion of the transaction.
What are the eligibility criteria for buying a resale HDB flat in Singapore?
To buy a resale HDB flat in Singapore, you need to be a Singapore citizen, a Singapore permanent resident, or a non-citizen married to a Singapore citizen.
You should also not own any other property in Singapore or overseas.
What are the steps involved in the process of buying a resale HDB flat?
The process of buying a resale HDB flat involves several steps, including finding a suitable flat, submitting the OTP, applying for a loan (if required), paying the deposit, and completing the transaction by paying the balance amount.
What are the HDB grants available for buyers?
There are various HDB grants available for buyers, such as the Additional CPF Housing Grant (AHG), Special CPF Housing Grant (SHG), and Proximity Housing Grant (PHG).
These grants can help reduce the cost of buying an HDB flat.
What is the completion date for the resale flat?
The completion date for the resale flat is usually within 8 weeks from the date of HDB’s acceptance of the resale transaction.
How will I know if HDB has accepted my resale application?
You will receive an SMS from HDB or can check the status of your application via the HDB resale portal.
How is the price of the flat determined?
The price of the flat is determined by mutual agreement between the buyer and seller.
The market value of similar flats in the same area can also be used as a reference.
How much CPF savings can I use to buy a resale flat?
The amount of CPF savings you can use to buy a resale flat depends on various factors, such as your age, gender, and the type of flat you are buying.
You can use the CPF Housing Grant and your CPF savings to pay for the flat.
