Steps To Buy Resale HDB Flat in Singapore

Before starting on your house-hunting journey, it’s vital to determine your eligibility and understand your financing options. One of the first steps of the process is to apply for a Home Financing Eligibility (HFE) Letter from HDB on My Flat Dashboard. This letter is a crucial document that details your eligibility for an HDB loan and the maximum loan amount you can borrow. It provides clarity on your budget, helping you make informed decisions about the flats you can afford to buy. The validity of the HFE letter is usually three months, ensuring that the information remains current and relevant to your HDB resale property search.

With your HFE letter in hand, you can start searching for a suitable resale HDB flat within your budget. This step involves researching various neighbourhoods, visiting potential flats, and considering factors such as location, size, and amenities. AE Realtor can assist you in this search, offering expert advice and insights to find a flat that meets your needs and preferences before taking the step to buy one.

Once you’ve found a flat you wish to purchase, the next step is to obtain an Option to Purchase (OTP) from the seller. The OTP is a legally binding agreement between you and the seller, giving you the exclusive right to buy the flat within a stipulated period. To obtain an OTP, you’ll need to pay an option fee, which is part of the purchase price. 

The OTP process also includes finalising your financing options, for which you have two main choices. Each option has its own specific requirement:

• Option 1: HDB Loan – Obtain the Home Financing Eligibility (HFE) letter.
• Option 2: Bank Loan – Secure a Letter of Offer (LO) from a financial institution.

While applying for the HFE letter through the My Flat Dashboard on the HDB website (refer to Step 1), you have the opportunity to request an In-Principle Approval (IPA) and a LO concurrently from participating financial institutions. This simultaneous application can streamline the process, allowing you to compare your options between an HDB loan and bank loans more efficiently.

After obtaining the OTP, you need to submit a Request for Value to HDB. This request is necessary to determine the official valuation of the flat, which is crucial if you’re using CPF funds or a loan to finance the purchase. The valuation will also affect the amount of CPF funds you can use and the size of the loan you can obtain. The cost of this valuation is usually borne by the buyer, and the valuation report is valid for a limited period.

If you have previously requested an In-Principle Approval (IPA) together with your application for the Home Financing Eligibility (HFE) letter, it’s time to convert the IPA into a Letter of Offer (LO). This should be done before you exercise the Option to Purchase (OTP) within the designated Option Period.

Exercising the OTP is the step where you formally agree to purchase the flat. To do so, you must pay the option exercise fee, which is a percentage of the purchase price, in addition to the option fee already paid. This fee typically ranges from 1% to 3% of the purchase price and is part of the down payment for the flat.

Once you decide to exercise the OTP, you must complete the necessary paperwork, which includes signing the acceptance of the option. This process also involves finalising your financial arrangements, such as confirming your loan details and ensuring that you have the necessary funds for the down payment and other related costs. Conversely, if you choose not to proceed, you can let the OTP lapse, but you’ll forfeit the option fee paid earlier.

The next stage in the process involves submitting a resale application to HDB. This application is a formal request to transfer the ownership of the flat from the seller to you. The application must include detailed information about both the buyer and the seller, the flat, and the terms of the sale.

It’s important to be mindful of the timeline for submission and ensure that all required information is accurately provided. The application fee varies depending on the type of flat, and it’s crucial to be aware of the costs involved. HDB provides a timeline for submitting the resale application, usually within a specific period after exercising the OTP, so it’s important to adhere to this schedule to avoid any delays in the buying process.

Once the resale application is submitted, HDB will review it to ensure all requirements are met and that the transaction complies with their regulations The review process for your resale application will be completed within a period of 28 working days. Within this timeframe, you will receive notification from HDB regarding the verification of your eligibility and the acceptance of your resale application.

HDB will arrange and provide all the required documents for both you and the sellers to sign, which should be prepared approximately three weeks following the acceptance of the application. It is essential for both you and the sellers to review, acknowledge, and sign these resale documents, as well as settle any applicable fees.

Upon successful endorsement of fees and payment of fees, HDB will issue an in-principle approval for the resale transaction. This approval is a significant milestone, as it indicates that HDB has accepted your application and that the resale process can proceed to the next stage.

The final step in the resale process is attending the completion appointment with HDB. This appointment typically takes place around eight weeks after HDB’s acceptance of the resale application. The completion appointment is a critical event where the official transfer of ownership of the flat takes place.

During the appointment, you will finalise the purchase by signing the necessary documents, including the transfer document and mortgage agreement, if applicable. You will also need to make the final payment for the flat, which may include the balance of the purchase price and any other fees associated with the transaction.

Attending the completion appointment is the culmination of the HDB resale buying process, marking the moment when you become the official owner of the flat. It’s essential to be well-prepared for this appointment, ensuring that all financial arrangements are in place and that you have all necessary documents ready.