The transaction process of buying a resale HDB may not seem simple for some buyers as it involves many steps and processes. In addition, there are also different policies and regulations of HDB and CPF that you need to take note of.
In this article, we seek to explain to you the buying process that you will be going through when buying a resale flat. Here is a 15 step process of what you can expect for a resale HDB flat buying:
1. HLE / Loan assessment
It is advisable for you to determine your affordability before putting down the deposit for your flat purchase. This is to ensure that you have sufficient loan to finance your purchase. Do note that you must have a HLE letter or bank’s LO before you can exercise the option to purchase.
2. Doing up your buying financial plan
After knowing your loan eligibility, it is strongly advisable that you should do up a buying financial plan. This planning will involves knowing your CPF(OA) amount, loan amount, loan tenure and grants you are eligible for. Do include all the cost to the transaction including stamp duties.
3. Decide on ownership and HDB intent to buy
Once your financial plan is set, you can decide who will be the owners of the flat that you will be buying. Having single ownership or multiple ownership can affect the loan amount, CPF usage and subsequently this will have major consequences on future additional buyer stamp duty liabilities. Make sure that you plan well for it. You can consider doing up the HDB intent to buy at the juncture.
Once all the above are clear, it’s time to go and view the houses that you like!
5. Check on ethnic and PR quota
If you have shortlisted a flat to buy, do take note of the HDB requirements to fulfil for the ethnic and PR quota.
6. Negotiation on the terms
In any flat purchase, on top of the price, there are terms to the purchase that you may want to take note of. For example, days to submit for HDB registration, extension of stay etc. Be prepare to negotiation on all these terms and ensure that they are favourable to you before putting down the deposit.
7. Issue OTP
After negotiating with the sellers on the price together with the terms of the purchase, the seller should issue a HDB option to purchase to you. This is in exchange of the deposit (option fees) that you give to the sellers.
8. Do valuation
With the option to purchase, you can proceed to apply for the valuation for the flat. If the valuation of the flat is lower than the selling price, be prepare to pay the cash over valuation amount.
9. LO or HLE to be ready
If you are taking a loan, ensure that you LO or HLE is ready before the option to purchase expiry date.
10. Exercise OTP
Do remember to exercise the Option to Purchase within the expiry period. At the exercise of the option, you will have to sign on the acceptance page of the option to purchase, plus, you will have to give the exercise fees to the sellers.
11. HDB submission
Within the dateline of the days to submit to HDB as stated in the option to purchase, you will have to do an online submission to HDB on the purchase of the flat. Do prepare to pay the registration fees at this moment.
12. HDB approval, acknowledgement and HDB inspection
After registration, the HDB will review the case and approve the resale transaction if there are no issues. After the approve, there will be documents for you to acknowledge. Do remember to look out for them. Meanwhile, the HDB will also send an officer to inspect the flat to ensure that there are no unapproved renovation/ alteration, unsafe window fittings to the flat.
13. Final inspection
You can inspect the flat again before the completion to ensure that the seller has moved out of the flat with together with all its furniture (this is an exception if there is an extension of stay for the seller).
14. Extension of stay (if any)
If there is any extension of stay, then you should confirm with the seller on the exact date to hand over the flat to you.
Once you got the keys to the flat, you can proceed to apply for your renovation permit and start renovation. After renovation, you can proceed to move into your flat.
The process of the HDB transaction mentioned above is just a general guide. As every individual transaction has its own unique circumstances, therefore some of the processes or procedures could be different.
If in doubt, do consult an advisor on your flat purchase to ensure that you have a hassle free transaction.