Guide to HDB Resale Application (Without Agent)

1. Register Intend to Buy

This is the very first step to do and a very simple application to register your intend to purchase a flat. The application is valid for 12 months and can be re-applied again if expired. This application is free. The process of application simply run through an online eligibility assessment for grants, loans and budget based on the information you provided. If you are going to apply for HDB loan, you are required to apply for HDB Loan Eligibility (HLE) after this step. I am going to use bank loan for my purchase and the subsequent steps will be based on using bank loan.

Personally, I did not rush to do this step and only applied 1 day before I signed the OTP.

2. Search for a suitable flat and get OTP

Before starting the process of searching for a flat, I think it is important to calculate the budget for the flat based on your financial situation. There are many online calculators and these are some of which I used for planning.

• HDB PaymentCalculator
• PropertyGuru Calculators
• DBS Planner

Most of the online guides will recommend you to get an In-Principle Approval (IPA) from a bank first. This IPA is optional and my experience is that most of the banks can’t be bothered with granting you an IPA. The banks may provide some of the information on their loan package and some factsheets, but there is no such official document know as an IPA that I see the banks are issuing. For example, if you click the apply for IPA link on DBS website, it brings you directly to the application of the mortgage loan.

Some of the property agents will ask whether you have registered your intent and IPA before allowing you to view the flats in order to filter out sincere buyers only. I will just say ‘done’ and proceed for flat viewing. As the resale market is very hot due to the pandemic resulting in BTO delays, some buyers have informed their agent to state upfront that they are asking for Cash-Over-Valuation (COV). I will avoid viewing this kind of flat as it shows that the sellers are not very keen in selling and will only sell above market price. There is no room for negotiation and they are willing to keep waiting until another offer comes by with a price higher than the market price.

The next step is the most tiring. Depending on your preference, you may start searching for suitable flats to view based on your criteria such as

• Size
• Location
• Level
• Remaining Lease
• Amenities
• Cost

I will normally try to arrange around 3 viewings on the same day on a weekend in the same area. This may continue for months until you found the flat you like. Try to avoid burnout and not view too many flats in a very short span of time.

Once you found a suitable flat, you can make your offer through the seller’s agent and the following are some of the details to be agreed upon before signing the OTP (Option to Purchase).

• Purchase Price
• Option Fee (default $1,000)
• Exercise Fee (default $4,000)
• Deposit Fee (max $5,000) = Option Fee + Exercise Fee
• Temporary Extension of Stay
• Decide when to submit the resale application (this is after the 21 days option period)

I see that the temporary extension of stay has already become a norm and almost all seller will ask for extension. Take note the extension of stay is a private agreement between the buyer and seller, and HDB is totally not liable for any disagreement should it arise in the future. All liabilities are on the buyer side no matter what contract you sign with the seller. The property agent should have a template for the contract and you can use that as default although it offers little protection. This is the part where I felt it is unfair for the buyers and HDB should come in to govern this agreement. There is no choice as the flat you like is more important than the extension, so you will just have to take the leap of faith for the extension of stay.

The next step is the most time critical step. When you are ready to sign the OTP, remember to apply for intent to buy if you have not done so earlier, you will have to pay the option fee (default $1,000) to the seller in exchange for the OTP form prepared by the seller. The payment can be done via PayNow. Once the OTP is signed, the timer starts, and you have only 21 days (including weekends and public holidays) to do the next 2 steps and to exercise the OTP.

Once you have obtained the OTP, login to the resale portal and complete Step 2.

3. Choose Mode of Financing

After completing Step 2, you should have already decided what type of loan you will be taking and complete Step 3 at the time.

4. Request for Value

After obtaining the OTP, and completing Step 2 and 3, you should immediately submit the request for value where HDB will appoint a valuator to evaluate the price of the flat you are purchasing. The application cost is $120 payable via NETS or credit card. As this takes 3 working days, do not delay this step as it will eat into the 21 days limit and the valuation result is required for the application of bank loan.

While waiting for the valuation result, you can proceed to find the appropriate bank loan and the law firm which will handle your conveyancing services. The law firm is only required if you are taking bank loan. Again, all this have to done within the 21 days. The wait for valuation result felt like waiting for your exams result as it will determine whether you have to pay for Cash-Over-Valuation (COV).

Once you have the valuation result, submit the bank loan application asap and wait for the bank’s Letter of Offer. This could take up to a week, so do not delay this step too. You will need to accept the Letter of Offer by the bank and indicate which law firm will be acting for you. The whole process of bank loan application is done online and there is no need to go down to the bank. With the Letter of Offer on hand, you can then decide when to exercise the OTP before the 21 days period lapsed.

When ready to exercise the OTP, arrange with the seller’s agent to signed the OTP. You will need to pay the exercise fee (default $4,000) to the seller. Payment can be done by PayNow. A witness above 21 years old is also required. The nerve-wreaking 21 days period is now over and the remaining step are relatively easy.

5. Submit Resale Application

Depending the on pre-agreed upon timeline to submit the resale application, both parties have to submit the application within 7 days of each other. The application fee is $40 for 1-room/2-room, or $80 for 3-room and above. The payment is via NETS or credit card.

The following information is required for the resale application

• Address of the flat you are buying
• Option to Purchase details (E.g. OTP Serial No., Option Grant/ Exercise Date, Purchase price, Option Fee/ Option Exercise Fee)
• Buyers’ and Occupiers’ particulars
• Manner of Holding of HDB flat (Joint tenancy or tenancy in common)
• Indicate application for CPF Housing Grants/ Proximity Housing Grant
• Indicate housing loan from HDB/ Financial Institution (FI)

Scanned documents to prepared

• Last 3 month’s payslip
• Last 12 month’s CPF contribution
• Bank’s Letter of Offer
• Law Firm Acting Letter

Additional scanned documents for Proximity Housing Grant

• Birth Certificate
• Parent’s NRIC
• Parent’s Marriage Certificate
• Property Tax Statement

After both parties have submitted their resale application, you will have to wait for HDB to give the in-principle approval. In the past, this will be done within 10 working days but probably due to WFH, HDB now takes up to a month to approve the application. Once the application is approved, an estimated completion date is given. It will take another 3 weeks before the documents are ready for endorsement.

6. Acknowledge Resale Application

Once the documents are ready, login to the resale portal to endorse the documents.

7. Pay Fees

Pay the $20 admin fees and wait for the purchase to be approve.  I believed this is for the application for temporary of stay although it just billed as ‘admin fee’.

8. Resale Application Approved

No action required. The final complete date and an estimate time for completion appointment are given.

9. Attend Completion Appointment

Before the complete appointment, you will need get a cashier order for the cash deposit portion of the purchase flat which is 5% of the purchase price for bank loan. The cashier order is addressed to HDB and then passed to the law firm. You will also need to pay the remaining property tax for the remaining for the year in cash via the law firm.

As I am taking bank loan, the law firm will act on our behalf to attend the appointment on the completion date. There is no need for the buyers to attend the appointment at the HDB Hub.

That’s the whole process of me getting an HDB resale flat without a property agent.

All in all, a lot of processes have been digitalized and can be done online which makes the whole application much simpler. The areas which I think HDB can improved on is making the signing of  the OTP an online process, and coming out with a governance framework to protect both the buyer and seller for temporary extension of stay instead of just washing their hands off. More information should be provided in getting a bank loan and when to engage the law firm. I only found out that we need to indicate the law firm when accepting the Letter of Offer from the bank, which then delay the process for a few days.

As I have been busy with the new house, I will be taking a break from blogging and providing updates for my portfolios.