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How To Sell Your HDB Flat



According to data from the Housing and Development Board (HDB), resale prices in the public housing market climbed almost 5% last year. You may be thinking this is a good time to put your flat on the resale market. You’ve outgrown your current home and thinking of upgrading to a bigger flat or private property, or you could be thinking of right-sizing as your children are already living on their own.


Eligibility


Before you put your flat for sale, there are some eligibility conditions you must fulfil. The first is the Minimum Occupation Period (MOP). The MOP is calculated from the date you collect the keys to your flat. It excludes any period where you do not occupy the flat, such as when the whole flat is rented out or when there has been an infringement of the flat lease.


Then there is the Ethnic Integration Policy (EIP), and Singapore Permanent Resident (SPR) quota for your block/ neighbourhood. The EIP ensures a balanced ethnic mix in HDB estates, thereby helping to promote racial integration and harmony. If you belong to a non-Malaysian SPR family (i.e. households with no Singapore Citizens (SCs) or Malaysian SPRs), you can sell a particular resale flat if the EIP and SPR quotas have not been reached. The SPR quota ensures that SPR families can better integrate into the local community. Malaysians are excluded from this quota because of their close cultural and historical similarities with Singaporeans.


There are also additional requirements such as bankruptcy or divorce cases. Check out HDB's website for the full set of eligibility conditions.


FSBO or Agent?


If you have met all the eligibility conditions, you can then look to put your flat on the open market. You can engage a licenced property agent to help you market the property or you can sell it yourself.


All property agents in Singapore must be registered with the Council for Estate Agencies (CEA) through a licensed property agency. The CEA is a statutory board under the Ministry of National Development and is empowered to administer the regulatory framework for the real estate agency industry and to protect the interests of the consumers. Every registered property agent has his/her unique CEA registration number, e.g. R123456A and it is an offence for anyone to carry out estate agency work without valid registration.


If you engage an agent, you will have to pay the agent a commission. Commission rates are not fixed and there is no minimum nor maximum percentage, nor “standard market rate.” It is best to negotiate the agent's commission before work starts. After the transaction has been completed, you should pay the commission to the property agency and not the agent.


Alternatively, you can also sell the property yourself and thus save on having to pay a commission. The money you saved on paying the commission could be put to better use i.e. renovating your next dream home or paying off your outstanding loans to reduce interest payable. According to HDB, from 2010 to 2018, the number of people selling their flats without an agent increased from 11% to 28%. The process of selling your property without an agent is known as For Sale By Owner (FSBO).


Step by Step Guide to Selling Your HDB Flat Yourself


1. Register Intent To Sell

HDB has a self-service portal that you can login using your SingPass and be guided through the process of buying and selling a resale flat. You can submit a resale application as well as a Request for Value here.


For the Request for Value, HDB's appointed valuer will a conduct physical inspection of your flat and give you a recommended value.


However, due to the current COVID-19 pandemic, if the physical inspection is not possible due to any person in the flat being under a Quarantine Order/ Stay-Home Notice/ Leave of Absence, HDB may request for the latest photographs of the flat for valuation.


For 1 or 2 rooms flats, the cost for each resale application is $40 and for 3 rooms and bigger, the cost is $80 for each application. For Request for Value, The processing fee for each Request for Value is $120 (GST inclusive). Both payment can be made via credit card or QR code.


2. Price & Market Your Property


If you do not wish to pay for the Request for Value service by HDB, you can research the latest transacted prices in your neighbourhood according to the property type, such as number of bedrooms and size. You can easily find this information through HDB's website or you can get an estimated value of your home by using MOGUL.sg's M-Value, which uses high-end AI and Machine-Learning technology to provide an unbiased estimation of your property.


Once you have decided on a selling price, you may proceed to list your property on print and other online platforms. Be sure to touch-up your property to ensure that it is in good condition. Remove clutter so that the place look spacious and livable, ensure that lights are working and taps not leaking etc. If possible, give it a fresh coat of paint. You can also do a virtual tour of your property to allow potential buyers to view without having to visit. Lastly, take beautiful photos to showcase the property so that potential buyers can imagine living there.


3. Grant Option To Purchase (OTP) To Buyer


After registering your Intent to Sell, you can download a copy of the OTP. You and the buyers must use the OTP as the contract in the transaction. Each form has a unique serial number and any other agreements and/or supplementary agreements relating to the sale or purchase of the flat are not valid under the Housing and Development Act. You should then collect an option fee, usually $1,000 from the buyer.


If both you and the buyer have agreed on the price of the flat, both parties must declare the true resale price of the flat to HDB. Take note that it is an offence to give false information relating to the resale application.


You can only grant an OTP to buyers at least 7 days after registering your Intent to Sell. Once the OTP granted, it will be valid for 21 days (including Saturdays, Sundays and Public Holidays), during which the buyers have to confirm their decision to go ahead with the purchase or withdraw. During this period, a second OTP cannot be granted to another buyer.

When the buyers exercise the OTP, they will have to put down a deposit which cannot be more than $5,000, inclusive of the option fee. In the event the buyer does not exercise the OTP within the option window, you can keep the option fee.


4. Submit Resale Application to HDB


After the OTP has been exercised, both you and the buyer must submit the resale application and accompanying documents, within 7 days of each other. Documents to be submitted are:

  • Details of Option to Purchase (i.e. OTP Serial number, Option Grant/ Exercise Date, Purchase price, Option Fee/ Option Exercise Fee)

  • Buyers’ particulars

  • Sellers’ particulars

  • Existing loan with HDB or Financial Institution (if any)

  • Declarations regarding your purchase

  • Any additional documents required by HDB which will be listed on the HDB resale portal

Upon receipt of the resale application and the supporting documents, HDB will verify the information provided and if the application is in order, HDB will notify both parties if the application is accepted via SMS or email. On average, it takes about 8 weeks to process the application.


5. Sign Contract & Pay Fees


Once the resale application has been accepted, both parties will be given six days from the acceptance SMS/email notification to endorse the resale documents.

HDB usually takes about 2 weeks to approve the resale application after the documents have been endorsed.


Once the approval has been granted, again, both partiues will be notified by SMS/email. Both you and the buyer can view the approval letter on the HDB resale portal.


You should then prepare your flat for HDB’s inspection which is usually about five working days after the application is approved. The HDB inspector will look out for the following:

  • Any unauthorised renovation work or illegal installations

  • Any major cracks on the walls, broken tiles, etc.

  • Unwanted items left by the seller

  • Electrical points not working

  • Faulty windows

  • Keys to window grills and bedroom doors are intact

  • Ceilings and corners for signs of water leakage

You can then pay the resale application administration fee through the HDB resale portal. The fees to be paid are $40 for a 1 or 2-room flat, and $80 for a 3-room or bigger flat. If you are unable to do the payment online, you can print the payment advice and make the payment at the HDB Hub in Toa Payoh, within 3 days of the notice to pay.


6. Completion of Resale


As the resale transaction takes about 8 weeks to complete, both parties will be informed of the completion date in the completion letter, and to attend the completion appointment at HDB Hub.


But before that, you, the seller will have to ensure that the GIRO account (if any) for all payments pertaining to the resale flat must be terminated and that the property tax and service & conservancy charges are paid up to the effective date of resale.


On the day of completion of the resale at the Resale Office, the sellers and buyers will submit the original OT to HDB. You have to produce evidence of payment of service and conservancy charges and property tax whereas the buyers have to produce the receipt for the final cash payment (if any).


If the buyers is taking a loan from HDB, he/she will have to produce a valid Certificate of Insurance for a Mortgage Fire Insurance Policy on the resale flat issued by HDB’s appointed Insurer. Both patties will then sign the legal instruments for the transfer of ownership, mortgage, the relevant forms and undertakings, and lastly, you will hand over the keys to the flat to the buyer.


If there are any net proceeds from the sale, it will be released to you upon completion of the sale, and any refund to the CPF will be credited to your CPF account between 7 to 14 days from the date of completion.


Do take note that you are required to move out of the flat by the resale completion date. If need more time to move out, you can arrange with the buyers for a temporary extension of stay in the flat of up to 3 months after the resale completion. It is best to discuss this with the buyers while negotiating the sale of the flat. The request for the extension of stay has to be submitted with the resale application. The extension of stay is only for a period of 3 months and there will not be any extension beyond the 3 months. The flat buyers (new owners) must inform the HDB Branch, and an administrative fee of $20 (inclusive of GST) is payable by the buyers as the new owners of the flat agreeing to the extension.


Selling your HDB flat yourself may seem intimidating at first but with HDB’s self serve portal, going FSBO is quite simply a breeze and you save thousands of dollars in commission, which can put to better use like investing in your child’s education or going for a family vacation.



Platform to List Your HDB


MOGUL.sg has recently launched their own FSBO service, where homeowners can list their properties for sale. Users are given the option to list their properties by themselves, avail of a Flat Fee Package, or engage their Property Concierge to handle all the work involved in the resale process. To learn more about this service, click here.


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