Buying a Resale HDB Flat – What you need to know

Resale HDB units usually fetch a higher price than their BTO cousins, but with proper planning and knowing what HDB grants you are eligible for, affording a resale flat is possible. Resale f...

Admin @Locally.sg 23-Nov-2018

Buying a Resale HDB Flat – What you need to know

So, you have decided to skip the BTO queue and get a resale unit from the open market instead. However, you are not quite sure where to start and on the various procedures involved.

Keep calm, and read on.

Resale HDB units usually fetch a higher price than their BTO cousins, but with proper planning and knowing what HDB grants you are eligible for, affording a resale flat is possible. Resale flats also cut down the waiting time needed for a flat significantly, and most consider the higher price reasonable because of this.

So…what do you need to do or know before making your decision?

  1. Check if you are eligible

 

This might sound ‘duh’, but it is good to find out if you are eligible to buy a flat in the first place.

 

You can head to HDB’s website to find out the eligibility conditions, as well as the various schemes under which you can buy a resale HDB flat.

 

  1. Budget

There are various CPF Housing grants available to those buying a resale flat, so it is good to know what grants you can obtain and factor these into your budget.

Additionally, think about what the maximum amount you want or are able to spend on your flat. If you go into your property search without a baseline amount, it can be tempting to purchase a flat that is nice but way over your budget. So, planning your expenditure beforehand is a good way of preventing yourself from overspending.

Whilst planning your budget, it is also good to think about how you are going to finance your home. HDB homes can be paid for using your CPF savings, but it is very likely that you will still need to take a loan to supplement your payment. So do some research on the loans that are available (HDB or banks) before making your decision.

Do note that before you can exercise the OTP when you have found your ideal home, you need to have a valid HLE (Home Loan Eligibility) letter from HDB or a Letter of Offer from a bank.

 

  1. Know what you want

 

Have in mind what you are looking for – e.g. how many rooms, locations or estates that you prefer, and whether the home should be furnished.

 

When you have a clearer picture of what you want, searching for a home becomes easier and more focused. Knowing your preferences will also help your property agent (if you are engaging one) in searching for your ideal home.
 

  1. Know your paperwork

 

At the end of the day, buying a home is not as simple as going to a store to make a purchase. There are going to be documents to sign and procedures to follow.

 

Before you can exercise the Option to Purchase (OTP), you, the buyer, and the seller need to submit a Resale Checklist. To secure the OTP, you have to pay the seller an option fee. The option period will be valid for a period of 21 days, during which you will need to submit the OTP to HDB for a valuation report, and also decide whether to exercise the OTP (i.e confirm your intent to buy).

 

When you exercise the OTP, you will have to pay a deposit of not more than $5,000 (including what you have previously paid for the option fee). You may then book your First Appointment with HDB.

 

 

  1. Enlist Help

 

If you are still feeling confused, perhaps you might want to consider enlisting some help.

 

Whilst some buyers might want to DIY, engaging the help of a property agent will probably make the process much easier because:

 

  1. He or she would have a better knowledge of market trends and also the real estate network, and also be able to help you find more potential sellers as compared to having to search on your own

 

  1. The nitty-gritty paperwork will mostly be handled by the property agent, so you have less things to worry about

 

There you go, five things to note and consider before buying your home sweet home from the resale market. We wish you all the best on your home ownership journey!

 

 

If you have enquiries on property related matters, or if any of our property listings caught your eye, feel free to contact us!