10 Easy Steps to Buy Your Resale HDB
Find Your Dream Home
You just got hitched and the verdict’s in: you need a new home. But BTO wait times are long, and your fragile heart can’t deal with any more application rejections. As for ECs and condos, well, your bank account doesn’t have the requisite number of digits yet.
A happy middle ground: resale flats. However, after projecting your dream Scandi design on over half a dozen flats, it’s easy to lose sight of what’s important in your house-hunting quest. However working with your Ping Property Agent & Ping Mortgages Broker can help you to know what to expect & that can reduce some of that anxiety and help you confidently find your way to your new home.
When looking for and buying an HDB resale flat, these are the key points to note. They also apply to Design, Build and Sell Scheme flats in the open market.
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 a Ping Mortgages broker to work out how much you can borrow from the various banks. 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 want your agent will work with you to craft and 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.
New HDB Resale Portal Procedure
HDB has revamped the process of buying a resale HDB flat. Gone are the days where Buyers and sellers have to go through 2 appointments and tons of paperwork. Buyers and sellers will enjoy a streamlined resale process with the introduction of the new HDB Resale Portal from 1 January 2018. Buyers and sellers can login to the HDB Resale Portal with their SingPass to start their respective resale journeys. Through the portal, buyers will be guided on their buying journey, and get to track the progress of their transactions.
Here is an overview of the streamlined resale process, which takes approximately 8 weeks to complete from the date of HDB’s acceptance of the resale application:
You have been researching for a resale flat and have an idea of:
- The resale flat that you want to buy
- The price that you are willing to offer
- The housing loans & grants that you may be eligible for
Step 1 – Register your intent to buy
Application forms will auto populate the relevant fields using data from the Government’s MyInfo Service to minimise manual data entry. Your Intent to Buy registered with HDB is valid for 12 months.
Step 2 – Get OTP from seller
Once the resale price has been agreed upon and you have a valid loan offer, the seller can grant an Option to Purchase (OTP). You have 21 days to exercise the OTP. The Bank’s Letter of Offer must be issued BEFORE you exercise the Option. If you plan to get an HDB loan, you must apply for an HLE. Alternatively, you can also apply for a bank loan through one of our Ping Mortgages broker. Pay Option Exercise Fee to seller. (This fee plus the initial deposit must not be more than S$5000 in total)
Step 3 – Choose the mode of financing
You need to decide whether to use cash, CPF savings and or housing loan to finance the purchase.
To work out a comprehensive financial plan, be sure to consider the following:
- Cash and CPF savings
- Housing loan
- CPF Housing Grant Scheme
- Payments involved
Cash and CPF savings
You will probably use both cash and CPF savings for the flat purchase. Your resale flat financial planning should therefore cover:
- How much cash is required
- Amounts that can be paid using CPF savings
The savings in your CPF Ordinary Account (OA) can be used for:
- Initial payment in whole or in part (depending on whether an HDB or bank housing loan is used)
- Partial or full payment for the flat purchase
- Monthly mortgage instalments
Step 4 – Request valuation from HDB
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.
HDB will inform you via email once the value of the flat is available in the portal, typically within 10 working days.
Step 5 – Submit resale application
Both seller & buyer have to go into HDB portal & submit the resale application including supporting documents required for the purchase. HDB will verify the information provided and notify you of the acceptance of the application via sms. The application status will be updated in the portal. You must have a bank’s Letter of Offer and Acceptance when submitting to HDB (our Ping Property Agent can help). After the first portion is submitted, the second party must submit their portion within 7 calendar 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.
Step 6 – Endorse resale documents
You will be notified via sms to endorse the documents on the portal within 6 days from sms notification.
Step 7 – Pay resale fees online
Fees can be paid by credit card.
Step 8 – Receive approval of resale application
Be notified by HDB via SMS of your resale completion appointment after your application has been approved. You will be notified via sms when HDB’s approval letter is posted on the portal. You can find the completion date & the HDB inspection date in the HDB’s approval letter.
Step 9 – Attend resale completion appointment
You will be informed via sms on the appointment to complete the transaction. Signing of all legal documents for the transfer of property at HDB, arrange for CPF (if applicable) and pay Stamp Duty and legal fees Collect keys from seller Receive Bank letter on loan disbursement and monthly instalment amount. Check physical condition of flat before HDB Resale Completion.
Step 10 – Move in
As the flat buyer, you can move into your flat on the date the purchase transaction is completed. Consider applying for the Renovation Loan and enhance your Home Contents Insurance coverage. Home Loans are normally packaged with fire insurance. Ensure that CPF or Loan Servicing Account has enough cash for monthly instalments (CPF deductions are made on the Sunday between 6th and 12th of the month).
Buying a BTO Flat
Home equity loans allow borrowers to borrow money against the equity they have accumulated in their home. Over the last few years, property prices around the country are going through the roof and home owners have seen substantial increases in the value of their property. This means they have increased equity even if they have not finish paying off their mortgage.