You will be able to list the steps of an HDB resale purchase in order and what happens at each.
The seller of the Bedok flat wanted to move quickly. Her agent messaged on a Friday night: if Farah and Hakim were serious, the seller could grant them the option on Monday. Hakim wanted to say yes on the spot. Farah wanted to know what saying yes would commit them to, what they would pay and when, and what they would lose if something went wrong.
The HDB resale process runs in a fixed order, through HDB's own resale portal, and each step either commits you further or costs you money. This lesson walks through it from start to finish.
Two things come before any viewing that matters. The first is the HDB Flat Eligibility letter from lesson 2.4, Get your HDB Flat Eligibility letter and read it. You need it before a seller can grant you an option, and it tells you your grants and whether you can take an HDB loan.
The second is your loan. If you are taking an HDB loan, the HFE letter states it. If you are taking a bank loan, get an in-principle approval from the bank before you commit, so you know the amount it is willing to lend. Farah and Hakim, who had chosen a bank package in lesson 5.5, Compare an HDB loan and three bank packages, had theirs in hand.
Once you agree a price, the seller grants you an option to purchase, using HDB's prescribed form through the resale portal. It gives you the exclusive right to buy the flat at that price within a set option period. You pay the seller an option fee for it, in cash.
The option fee is the first money at risk. If you decide not to go ahead and let the option lapse, the seller keeps it. HDB caps the option fee, and the amount is agreed between you within that cap. In Farah and Hakim's example, it was S$1,000.
After you have the option, you submit a request for HDB to value the flat. HDB carries out the valuation and tells you the result, usually within days. Because you get the valuation while the option is still open, you learn the cash over valuation before you are fully committed. Lesson 6.2, Valuation and cash over valuation, is about what to do with that figure.
If you decide to go ahead, you exercise the option before it expires and pay the exercise fee, also in cash. HDB caps the option fee and exercise fee together. In the example, the exercise fee was S$2,000. Both fees count towards the price.
Exercising is the point of commitment. If you pull out after exercising, you can lose what you have paid, and the seller may have other claims. Make sure your loan, your cash and your plans are settled before you exercise.
Stamp duty falls due shortly after you exercise. Lesson 3.1, BSD: tiered rates that work like tax bands, explained that many buyers pay it in cash first and have it reimbursed from CPF later.
After the option is exercised, both you and the seller submit your parts of the resale application on HDB's resale portal, within the time HDB sets. HDB then reviews it. If everything is in order, it accepts the application, and both sides log in to endorse the documents and approve the resale.
The final step is the completion appointment. On that day, the money moves: your loan is drawn, your CPF and cash pay the rest of the downpayment, the seller's loan is repaid, and you collect the keys. From application to completion, HDB publishes typical timings on its website, and it is usually a matter of weeks.
Here is the sequence for Farah and Hakim, with the source of each payment:
Option to purchase granted: option fee, S$1,000 in this example, cash Option exercised: exercise fee, S$2,000 in this example, cash Shortly after: Buyer's Stamp Duty, paid in cash first and reimbursed from CPF later in their case Completion: the rest of the downpayment, with any cash over valuation and the minimum cash share of a bank loan in cash, and the remainder from CPF; legal fees, which CPF can usually pay; and the loan itself, which the bank pays directly After completion: renovation, furniture and moving, all cash
Which parts can come from CPF depends on your loan and the CPF rules, as Big goals: wedding, home, car and kids, lesson 4.2, Which parts must be cash and which CPF can pay, set out. Lesson 6.5, Build your purchase timeline, puts real dates on this list.
HDB changes the resale process from time to time, as it did when the HFE letter was introduced. Before you start, read the resale process pages and timelines on the HDB website, and check the option fee and exercise fee caps that apply. Your agent, if you have one, should know the process, but the HDB website is the source.
Farah told the agent they would take the option on Monday only after they had checked their cash for each step. In the activity below, write the resale steps in order, with the payment due at each and whether it can come from CPF.
Write the resale steps in order with the payment due at each and whether it can come from CPF.
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