A Guide On How To Sell Your HDB Flat
If you are considering selling your flat, you do not have to get an agent to find buyers or to help complete the transaction process. The Housing and Development Board (HDB) resale procedure is straightforward and fast . All you need is a checklist of the steps required. A lawyer can provide any other assistance needed in selling your flat.
Alternatively, use the HDB Lease Buyback Scheme. It involves selling part of the lease of your flat to HDB based on the age of the youngest owner, and the proceeds will be deposited in your CPF account (retirement account). The scheme creates fixed income savings for your retirement years, while still living in your flat.
Things To Consider Before Selling Your HDB Flat
Take note that there are several conditions and criteria you must meet before you can make a sale of HDB flat:
Minimum Occupation Period (MOP)
This is the amount of time an HDB seller should occupy a flat before selling. Government policies indicate that properties bought from HDB or resale flats acquired from the open market using the CPF housing grant should be occupied for at least 5 years before selling. The 5 years exclude time not spent occupying the flat.
Check if you have met the MOP by using your SingPass to log in to My HDBPage. Go to My Flat, choose Purchased Flat, select Flat Details, and click on Minimum Occupation Period (MOP). Your MOP will depend on the flat type, how you purchased it, and the date of application
Ethnic Integration Policy (EIP) and Singapore Permanent Resident (SPR) Quota
The EIP and SPR quota is meant in order to promote racial integration and harmony in the local community and neighbourhood. You cannot sell your flat if it causes your neighborhood’s or block’s EIP and SPR quota to exceed. This restriction does not apply when the buyer belongs to the same ethnic group or citizenship type like you.
Note that if neither you nor your co-sellers are Singaporeans, you can only make an HDB sale after obtaining the consent of the Official Assignee.
If you divorce after meeting the MOP, you need to produce a letter or other documents proofing the divorce or separation first before selling.
Calculation Of Finances
Ensure that you have enough finances to cover your new home or part of the purchase price and the resale fees. Since most of the payment received may go towards clearing your home loan balance and pay the downpayment, have enough cash, savings, or home loan to cover these needs. Home owners need to think of costs such as :
a) Resale application administration fee – There is a resale admin fee of $40 for one and two-room flats. Three-room flats or larger homes are charged $80.
b) Legal fees – You can use an HDB lawyer if you have no outstanding private bank loan, they will be cheaper than most private lawyers.
c) Payment of stamp duty until the end of the year
d) Upgrading costs (where applicable)
e) Service & Conservancy Charges
f) Resale levy (where applicable)
8 Simple Steps To Sell Your HDB Flat
Here is a step by step guide on how to how to sell HDB flat without incurring agent commission expenses.
1. Register Intent To Sell
The first step is to register your intent to sell. HDB intent to sell is done by using your SingPass to access the resale portal. You will need to key in the information needed. But some personal info will be retrieved from MyInfo e-services.
You will need to provide details on how much you intend to sell and your financial plan for buying a new place. If you are yet to set a sale price for the new flat, there is a list of prices for resale flats of the last two years that you can use to estimate the HDB selling flat price.
- You will get information about the EIP and SPR quota of your resale flat. This will affect the demographics of people you may sell your flat to. Note that the non-Malaysian permanent residents should be within the required block and neighborhood limits.
- You will confirm your eligibility to sell your flat.
Make sure you get information and gain an understanding of the status of upgrading your block. Use the “Enquire Status of HDB’s Upgrading /Estate Renewal programme” e-service to see if there have been completed upgrading works. Check the schedule of the billing dates, and if you or the buyer will be liable to make the payments.
The Intent to Sell is valid for 12 months. You will need to wait for 7 days before you can issue an option to purchase (OTP). HDB recommends using this period to check the housing options available.
2. Put Your Flat Up For Sale
HDB Singapore flat may appear easier to advertise with an agent. This is because a housing agent will have experience with selling HDB flat and knows the ways on how to maneuver the resale market. And if in the case that they have paid subscriptions, they can post your house on listing websites.
But you can still market your property without an agent and get a buyer within 7 days, which is your waiting period before getting an OTP. Find property market portals on the internet or a website that provides free owner listings. Once you have put your flat (HDB) on sale and at least 7 days have lapsed, give potential buyers a look of the house.
3. Grant Your Buyer The Option To Purchase (OTP)
Once you have someone with an intent to buy, the next step of the process is to provide them with an official HDB OTP. Government policies indicate that the OTP Singapore is the only agreement you can use in the transaction. All other agreements are invalid under the Housing and Development Act.
Log in to the HDB resale portal. Download and print the OTP form. You should then give a signed OTP form to the buyer in exchange for an option fee. If the buyer decides not to buy, you can keep the option fee. If they decide to buy the flat, they will pay a deposit, known as an option exercise fee, and after, sign the OTP.
During the selling of HDB flat, you can only get one OTP at a time. It will be valid for 21 days from the day you grant it to the buyer. During this period, the buyer gets to make a decision if they want to complete the purchase, and as the seller, you cannot grant it to anyone else. Make sure that you both comply with the procedures and requirements indicated in the OTP.
The option fee and option exercise fee are both negotiable. The amount of option fee can be up to $1,000 and the option exercise fee can go up to $4,000. But make sure that their sum does not exceed $5,000. The sum of both amounts ($5,000) makes up the deposit.
Take note that you and the buyer are required to declare to HDB the resale price that you negotiate and agree on. The next step in the process is to submit an application for resale.
4. Submit Resale Application
Submit the resale application together with the necessary supporting documents through the HDB resale portal. Both parties (you and the buyer) need to agree on a time frame or dates to make the submission. You must submit it within 7 days range of each other.
The following information will be required when submitting the resale application form:
- Details of the OTP, such as the serial number, option fee, and option exercise date and fee
- Your particulars, or of the listed owner
- The particulars of the buyer
- Declarations regarding the purchase
- Declaration if you have an existing bank loan or HDB loan
- Declaration of your plans after completing the transaction and an address of your new place
- Name of the solicitor, if you are not engaging HDB
5. Endorse Resale Documents
Once HDB acknowledges receipt of your application, you will get an SMS notification or email for the endorsement of documents on the HDB resale portal within six days.
- Seller’s sale proceeds
- If your spouse does not own the property, you need to submit the Spouse Consent to Resale form
- Acknowledgment for Upgrading Programme, if applicable
- Resale documents for acknowledgement
6. Pay Resale Fees Online
In this step, you will need to get your credit card ready. Once you endorse the resale documents, you and the buyer will be required to pay conveyancing fees and an admin fee using the HDB resale portal. You also need to pay for property tax such as stamp fees.
7. Receive Approval Of Resale
You will get an approval for resale through SMS and email in about two weeks after endorsing the resale documents. The approval letter will be available on the portal and will include the date of the HDB’s flat inspection and the provisional HDB Resale Completion Appointment. The inspection by HDB is to check for any illegal alterations made to the resale HDB flat.
You and the buyer will be provided with an actual date and time for the Resale Completion Appointment through SMS or e mail. It will be in about eight weeks from the date of acceptance of the resale application.
8. Attend Resale Completion Appointment
In this last step, both you and the buyer will attend the Resale Completion Appointment at the HDB hub to finalize the resale transaction. You can have a private lawyer attend the HDB Resale Completion Appointment on your behalf.
Items needed are:
- Original OTP
- Receipt for service and conservancy charges
- All the house keys
You and your family will hand over the house after the Resale Completion Appointment. If you need more time, you can apply for up to three months of temporary extension of stay.
The HDB resale process is not complicated. It is a straightforward eight-step process, and the transaction will take a short period. While most sellers may be tempted to find a housing agent to find buyers, you can use the internet to find interested parties.
The best thing about most of the steps in the process is that they can be conducted in the portal. Create a checklist of everything you will need to complete the selling process and take note of the time frames provided. Be sure to keep the appointments.
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