Since independence, the HDB has been pro-active in clearing away slums from the face of Singapore and replacing these temporary inferior residential solutions with low-cost and effective housing units.
As a result, HDB flats have been very popular, especially in these times of high priced properties and real estate housing options. HDB properties are considered to be the ideal residential housing facility by students, professionals, etc. About 80-90% of Singaporeans live in HDB flats today.
HDB flats are monitored closely by Singaporean authorities, and have become renowned for their ready availability and ease of buying and selling than their other real estate counterparts.
Since the 90s, the Housing and Development Board has been expanding to new estates, enhancing the overall structure and facade of the old HDB flats. The older HDB flats, are however, comparatively high priced than the new ones, having people from all walks of life.
Steps to Sell an HDB Flat
Selling an HDB flat incorporates many legal and monetary nuances that a seller should be aware of before proceeding with any deal. Here are some of the most rudimentary steps to sell an HDB flat in Singapore:
- Check for the legal eligibility and the conditions that allow you to sell your HDB flat. This includes verification with the HDB authorities as well as the local government bodies that preside over the local property related matters.
- Next is the submission of a valuation report of your flat to the HDB authorities. Usually, the cost of this valuation process ranges from S$124 for 1-2 rooms to S$176 for 3-room flats.
- Verify with the HDB authorities whether your HDB sale is compliant with the ethnic integrity regulations or not. Also, find out what is the ethnic eligibility of your flat, i.e. which kind of people can come and stay in order to maintain proper ethnic concentration in the HDB estate.
- After these procedures are completed, it is time to let the potential buyers know that your HDB flat is for sale. Use the various property portals and other advertising media to promote your flat.
- Screen the potential consumers in accordance with their ethnic eligibility and their budget. Next, make the necessary appointments with the potential customers you think will be the best options available and prepare your flat for the visitors.
- Promote your flat without any aggressive selling tactics. Having an amicable atmosphere will further help in the sale.
- Conclude the deal after mutually deciding on a price that is favourable for both the parties.
- An option fee limited to S$1000 is to be collected from the potential buyer, after which an Option To Purchase (OTP) form is to be issued to him/ her. On confirmation of the sale, the form must be signed with an amount of S$5000 (maximum) to be deposited to you by the buyer. The OTP gives the buyer exclusive rights to buy your flat within 14 days from the fixed date of signing, exceeding which you can search for a new potential buyer. If the deal does not proceed beyond the option fee segment, you can have the option fee forfeited.
- The Resale Application form and other necessary documents such as photocopies of BC, PR, Marriage/ Divorce records, valuation reports, etc. are required.
- Statutory declarations (for the agents) and all other photocopies of documents are to be duly submitted to the HDB authorities.
- Wait for two appointments with the HDB authorities; the first one is after 5-6 weeks and the second one is after 6-8 weeks of the deal. It will be followed by an inspection from them.
- In the final step, the property will be transferred and the mortgage documents will be signed with the HDB officials acting as witnesses.
Before preparing yourself to sell the HDB flat, you should be well aware of some of the eligibility factors that might come up as an obstacle to your deal.
MOP (Minimum Occupation Period) – This form is to be filled in by the seller, in accordance to the mentioned terms and regulations. The MOP is calculated, keeping in mind the kind of HDB unit you own and the scheme when bought from the authorities.
Ethnic Eligibility – The seller must make sure that the ethnic concentration or integration of the HDB estate is kept intact while selecting the buyer.
Financial Conditions – Apart from the HDB policies mentioned above, there are financial obligations too:
- Outstanding mortgage loan
- Upgrading cost
- Upgrading levy
- Resale levy
- Property tax
- Conservancy and service charges
- Other Clauses – Estimate sales proceeds are to be calculated after putting a halt on any unauthorized renovation work within the HDB unit up for sale. The CPF policies should also be given a check to ensure that no unintentional infringements take place on your behalf as the seller.
These are the bare essentials that you need to know to sell your HDB unit. However, instead of going through the whole process on their own, it is easier for sellers to hire a property agent (independent or agency agents such as from online property portals) to perform the whole task on their behalf. With their experience and know-how, the agents often get a better deal for the sellers, offering a better value-for-money on the latter’s investment.
