When buying a HDB flat in Singapore, the dilemma of getting a BTO or resale HDB flat can be a serious headache.
There are the obvious factors: The waiting time, for one, might deter you if you’re considering a BTO. You have to endure it before you finally get the keys to enter your new home.
Have you decided that you don’t want to wait a few years for your new home? Or, are you the husband-to-be who doesn’t plan to use BTO to pop the once-in-a-lifetime proposal question?
If you’ve decided on the resale option, read our step-by-step guide to familiarise yourself with the HDB resale process, so you’ll be ready to buy a HDB resale flat all on your own!
How to buy an HDB resale flat on your own?
- Login to HDB Resale Portal to register your intent to buy
- Plan your finances
- Shortlist the HDB flat you want
- Receive the HDB OTP (Option to Purchase) from the seller and exercise it
- Submit resale application to HDB
Pre-purchase checks for home seekers
Before you go ahead, you should double-check whether you are eligible to buy a resale flat here for specific eligibility schemes unique to you.
For general eligibility schemes that apply to all, there are 3 primary considerations:
If you’re going solo, you must either be a Singapore Citizen or Singapore Permanent Resident.
If you’re applying with your partner, family or other parties, at least one of you must be a Singapore Citizen or Singapore Permanent Resident; Singapore Permanent Residents must have had PR status for 3 years before buying their HDB resale flat.
Unlike BTO flats, there are no income ceilings for the purchase of HDB resale flats! However, it might affect the housing grants that you can apply for.
Ownership of additional properties
By purchasing a resale flat, you should not have any other HDB flats, private or overseas property.
If you do own one, dispose of them within 6 months of your resale flat purchase transaction.
Now, you’re ready to start your home-buying journey:
1. Register your Intent to Buy
Log in to the HDB Resale Portal via your Singpass to register your “intent to buy” an HDB Resale Flat.
If you’re buying the flat together with a partner or family, only one of you needs to register your Intent to Buy.
Note that even if you engage a property agent for the buying process, they are not allowed to register the Intent to Buy on your behalf, but they can guide you through it.
There is no fee involved for this registration, and you will receive an instant evaluation on your eligibility to buy a resale flat, all the housing grants you can apply for and whether you can take an HDB housing loan.
Your Intent to Buy will be valid for 12 months, after which you’ll have to re-apply before taking any other steps to buy your HDB flat.
2. Plan your finances
In determining the suitable flat choices within your budget, here are some financial planning considerations to make it easier for your search.
- Cash and CPF savings
- Housing Loan
- CPF Housing Grant Scheme
- Payments involved
Use these HDB financial tools to get a gauge of your current financial position and how much you can borrow.
Cash and CPF savings
Here’s what you can only pay by cash:
- A deposit to the seller (a maximum of $5,000, paid in 2 stages: the option fee, and the deposit)
- Part of the initial payment (if you take a bank loan, or have insufficient CPF savings)
- Amount not covered by CPF savings and eligible housing loan amount
- Cash proceeds from disposing of the last flat if you are taking a second HDB loan*
Part of the cash proceeds from the disposal of your existing or previous home will be set aside if you are getting a second HDB loan. This amount determines the loan amount for your second loan.
How can you use your savings in your CPF Ordinary Account (OA)?
- Initial payment in whole or in part (depends on whether you use an HDB or bank housing loan)
- Partial or full payment for the flat purchase
- Monthly mortgage instalments
You can take on a housing loan with HDB or a Financial Institution (FI):
- If you’re planning to take on a HDB housing loan, you must have applied for HDB Loan Eligibility (HLE) letter and received a valid HLE letter so sellers can grant you the Option to Purchase (a document giving you, well, the option to purchase – more on this later).
- For a financial institution housing loan, You must obtain a Letter of Offer (LO) from the FI before you exercise the Option to Purchase.
CPF Housing Grant Scheme
You can use the CPF Grants for the initial payment of your flat and for reducing the housing loan amount. Check the different types of CPF housing grants here.
Too much to digest? Here’s a summary of the principal payments you have to make for a Resale Flat purchase:
- Deposit to the seller (Option fee and deposit)
- Initial payment
- Cash payment for balance purchase price
- Additional miscellaneous costs
3. Shortlist the HDB flat you want
Various online platforms have made it a breeze for you to search for your dream home on your own.
Carousell Property, for one, has listings of HDB flats for sale by both property agents and direct owners themselves, giving you even more options to browse:
Browsing through many properties that do not fit with your criteria can cause you much frustration and wasted time. Shorten the process by making use of these Quick Filters!
Tip: Choosing an HDB flat near to your parents’ place means that you can apply for the HDB Proximity Housing Grant (PHG).
After you’ve chosen your ideal flat, you should first do a check on the area’s Ethnic Integration Policy (EIP), as well as the Singapore Permanent Resident (SPR) Quota if your buyers are non-Malaysian non-citizens, on the HDB website.
- Ethnic Integration Policy (EIP): The proportion of the buyer’s ethnic group has to be within the prescribed block and neighborhood limits
- Singapore Permanent Resident (SPR) Quota: The proportion of non-Malaysian Permanent Residents has to be within the prescribed block and neighborhood limits. The SPR Quota is 5% at neighborhood level and 8% at block level.
Tip: These policies were put in place to maintain a healthy resident mix in each estate.
4. Receive the HDB Option to purchase (OTP) from the seller and exercise it
Once you have reached a consensus with the seller regarding the sale price, they will then offer you an Option to Purchase (OTP).
This may also come with an Option Fee of no more than $1,000 – think of it as a sum of money you’re using to chope the flat.
Apply for a valuation of the flat, once again via the HDB website, by the next working day after you’ve been granted the OTP.
This is basically a calculation of how much you’re eligible to withdraw from your CPF savings, how much housing loan can be granted to you, and the minimum cash payment you must make.
You’ll need a valid valuation report if you’re taking a HDB or bank loan, or using your CPF monies to buy your flat or service your loan instalments.
Seal the deal by exercising the OTP within 21 days, up to 4pm on the expiry date. Accompanying this, pay a deposit of no more than $5,000, inclusive of the Option Fee.
For instance, if you paid $300 as an Option Fee, the seller can request no more than $5,000 – $300 = $4,700 as a deposit.
Otherwise, once the 21 days have lapsed, the seller can offer the flat to anyone else, and you lose your chance to purchase the flat (and the seller gets to keep your Option Fee!).
5. Submit resale application to HDB
Once that’s out of the way, both you and your seller will now have to submit your respective portions of the resale application separately, within 7 days of either submission.
What’s next? Attend the HDB Appointment with the seller and get the keys to your new home!
480 Lor 6 Toa Payoh
Mon-Fri: 8.30AM – 5PM
Sat: 8.30AM – 1PM
Tip: Here are some conditions for your information after buying your resale flat, such as the resale levy, requirements for renting out your new flat and more.
Purchasing your resale HDB flat in Singapore
That’s really it to your home-buying journey! Congratulations, you are now a proud owner of your new home.
Here’s a pro tip: Buying your flat via the HDB Resale Portal is a lot easier for the buyer as compared to the seller, as they will be doing most of the work. *wink
If you’ve made it through this article, you should have no trouble purchasing your own HDB resale flat (P.S. There are tons of HDB grants to help. Tons, as in, $120,000 tons!).
Remember to share this article to benefit your fellow peers looking to buy an HDB resale flat of their own!