Unlike those BTO flat buyers, you don’t want to have to wait years to move into your new home. Or maybe you got priced out of the BTO market by your salary—well done.
Whatever your reasons, here’s a guide to buying a resale HDB flat. Fortunately, with HDB’s new Resale Portal, this entire process can be done from a single website.
1) Check your eligibility
Resale flats may have less stringent eligibility requirements than BTO flats, but they’re still HDB flats, so not just anybody can buy them.
Make sure you satisfy these eligibility requirements before you even think of buying a resale flat:
- You have no other HDB flats or private property (including overseas), otherwise you must dispose of them within 6 months of the purchase
- You are a citizen or PR of at least 3 years, buying the flat within a family nucleus (spouse and children if any, or parents and/or siblings, or children under your custody if you’re widowed/divorced), OR
- You are a citizen or PR of at least three years buying the flat with your fiancé or fiancée and are prepared to register your marriage within 3 months of the resale completion, or before the resale completion date if you are applying for a CPF Housing Grant
- You are a single citizen aged 35 and above, or 2 to 4 single citizens aged 35 and above buying the flat together
- You are a citizen with a foreign spouse or family members on a long term visit pass or work pass
The good news is, Step One of the HDB Resale Portal will check your eligibility when you register your Intent to Buy.
2) Choose your flat
Browse property ads to find a flat that you like. Also, don’t forget to do price research.
The Resale Flat Prices e-Service is a godsend, as it shows you the past transaction prices of HDB flats over the past 2 years. You can sort your searches according to area and flat type.
Compile a list of flats you’re interested in and that are within your budget, and then arrange with the owner or agent to inspect them.
Note that selling prices of HDB resale flats are no longer calculated according to the amount of Cash Over Valuation or COV.
That means it’s up to you to do your own price research and negotiate the price based on past transactions and current selling prices.
You can also use an agent, but note that agents’ commission might be chargeable, usually at a rate of 1% of the property price.
3) Secure your Option to Purchase
When you’ve decided on a flat, you’ll want to obtain an Option to Purchase (OTP).
You’ll need to pay the seller an option fee in order to secure the OTP. This fee can be anywhere between $1 and $1,000 and is up to you and the seller to decide on.
Once you’ve paid the option fee, the seller is not allowed to give someone else an OTP until yours expires in 21 days’ time.
4) Decide if you want to get a HDB Loan or a bank loan
If you’re planning to get a HDB loan, it’s time to scramble. You will need to get a HDB Loan Eligibility Letter (HLE) and submit the documents to prove that you qualify. This can be done online and takes no more than 14 days.
Check out our comparison between HDB loans and bank loans if you still need help deciding.
Step Two of the Buying Process on the HDB Resale Portal will require you to get your OTP from the seller before proceeding.
5) Obtain a loan
Don’t assume an HDB loan is a better choice, as HDB loan interest rates tend to be relatively high compared to bank loan rates. Those taking bank loans will have to obtain a Letter of Offer from a bank first before you can exercise your OTP.
Not sure which bank to go with? You can use MoneySmart’s home loan wizard to compare loans for free.
6) Obtain a valuation report
Before your OTP expires, you need to apply to HDB for a valuation report if you are using CPF savings and/or taking out an HDB or bank loan to finance your purchase… which of course you are.
The valuers will visit the flat within 3 working days, and your report will be ready, usually within 7 to 10 days of their visit. This will cost you $120, which you can pay at Step 4 of the Buying Process on the HDB Resale Portal.
7) Exercise the OTP and pay the deposit
With your HLE or Letter of Offer in hand, you can now exercise your OTP. You will then pay the deposit that was previously agreed upon by you and the seller.
Now you can thank your lucky stars you’re not forking out a six figure deposit, as the total sum of your deposit and the option fee you paid earlier cannot exceed $5,000.
8) Submit resale application with the seller
Now that the sale is confirmed, you and the seller should decide on the date to book for your first HDB appointment, which you will attend together.
Submit the resale application form here together with the seller, indicating the appointment date you wish to book.
If either of you is using an agent, the agent can submit the form on your behalf.
9) Book your HDB appointment and ask for grants
There’s a whole list of documents you need to bring along to the HDB appointment, including:
- HDB’s letter confirming your appointment
- your IC
- your HLE or bank’s Letter of Offer
- your marriage certificate if you’re buying the flat with a spouse
- birth certificates of your family members if applying with parents or siblings
- your income documents if you are applying for any CPF Housing Grants
The HDB representative will check that you are eligible to buy the flat, explain the resale procedures to you, confirm the manner of holding of the flat if you’ll be sharing ownership with someone else, and fix a completion date for the purchase.
At this point, you’ll also be able to opt to allow the HDB’s lawyers to act for you in the purchase, although if you wish you can use your own lawyer.
If you’re taking out an HDB loan, you’ll also have to arrange for the withdrawal of your CPF savings and verify your eligibility for the HDB loan at this appointment.
Now is also the time to apply for CPF Housing Grants if you’re eligible.
10) Completion
Prior to completion, the lawyer will already have hounded you for most of the documents and payments that need to be submitted.
Completion typically takes place 4 to 6 weeks after your appointment.
This is the day you will finally collect the keys to your new home. Yay!
Do you have any questions about buying a resale flat? Leave your queries in the comments!