Whether you are a young couple who just ROM or a growing family looking to upgrade, every Singaporean would own a HDB flat at least once in their lifetime. HDB flats are home to over 80% of Singapore’s resident population.
You have thought about your lifestyle, crunched the numbers and made the decision to buy an HDB flat. It can be a complicated, stressful process. However knowing what to expect can reduce some of that anxiety and help you confidently find your way to your new home.
Here is what you need to know about the buying process for resale flats:
Eligibility Scheme
Check your eligibility to buy a HDB flat. You can buy a HDB flat after you qualify HDB’s eligibility schemes. Generally, there must be at least 1 Singaporean or 2 Singapore PR to qualify to purchase a HDB flat.
Figure out how much you can afford
Apply for a HDB Loan Eligibility Letter (HLE) or check with the various banks to work out how much you can borrow. Decide how much you are willing to pay. Just because you can qualify for a larger mortgage doesn’t mean you want to have that kind of payment each month. Start researching in your prospective neighbourhood to give you a good sense of what your money will get you.
Find a real estate agent
This person will be your lifeline through the process. In the past, people did not have much to go on when selecting an agent. A flyer in the mail might have been all you had to consider if you did not have a personal referral. Nowadays, it is a breeze to check reviews online. Go ahead and meet with a few agents and ask some questions. Your agent is your chief advocate, confidante and hand-holder in the process so you want to find a good fit. Your Ping Property Agent will be able to assist you to find your dream HDB flat.
Make an offer
For most buyers, this is when the butterflies really show up. Once you have found a HDB flat that you like, you will want your agent to work with you to craft an offer. Remember, the listing price is only a starting point. Your Ping Property Agent will understand the market and help guide you to make the most attractive offer, whether it is below, at or above listing price.
Closing the deal
Once you have submitted the offer you get to wait. It will seem everlasting. You may get neither a simple yes or no but a counteroffer to consider. It can be something of a dance. If you get a rejection, it’s time to look for other HDB flats. If your offer is accepted, it is time enter an Option to Purchase (OTP) contract with the seller and you pay not more than $1,000 to the sellers as the option fee.
Valuation
If you are taking an HDB housing loan or a bank loan, or you are using your CPF funds to buy the flat or service loan instalments, you or your Ping Property Agent will need to submit a valuation request by the next working day.
With the valuation, you may decide to:
- Proceed with the flat purchase and exercise the OTP. You need to pay the sellers an option exercise fee. The total amount for the option fee and the option exercise fee must not exceed $5,000.
- Give up the flat purchase. The OTP will lapse after 21 days. You forfeit the option fee.
Resale Checklist
Go to the HDB website, use your Singpass and complete the Resale Checklist. Obtain a Letter of Offer if you are getting a bank loan.
Exercise OTP
You would have to exercise the OTP within 21 days. To do that, you will need to have a valid HLE Letter from HDB, or a valid Letter of Offer from the bank.
Submit Resale Application
Buyers and sellers will have to submit their portion of the application separately. Either buyers or sellers may submit their portion of the resale application first. Once the first party has submitted his portion, the second party will have to do so within 7 days. If not, the submission by the first party will lapse and they have to re-start the process. Your Ping Property Agent will be able to assist you in submitting your Resale Application. Upon the submission by the second party, the resale application will be considered as complete. The second party will be able to book the First Appointment (with the first party’s consent) for the transaction.
First Appointment
This date is generally the earliest available date and time slots in HDB for Resale First Appointment that has been normally the discussed and agreed date between seller and buyer. The purpose of the First Appointment is for the buyer and seller to discuss administrative matters and to finalise the resale financial plan.
If you are unable to personally attend to matters relating to the purchase, you will need to prepare a Power of Attorney (POA). A POA is a legal document that allows an individual to appoint another person to act on his behalf and in his name on matters spelt out in the POA. The attorney can attend the First and Completion Appointments on the buyer’s behalf.
Resale Completion Appointment
The Second Appointment (Resale Completion) after 6-8 weeks from the date of the First Appointment.
Obtain vacant possession of flat upon resale completion
As the flat buyer, you can move into your flat on the date the purchase transaction is completed. You are not allowed to move into the flat before the completion of the purchase of the flat, as you are not the flat owner yet.
If the sellers need more time to vacate the flat, they can arrange with you to extend their stay temporarily in the flat for up to 3 months after the legal completion of the resale transaction. They must have committed to buy a completed housing unit in Singapore, such as another HDB flat or private residential property.