Selling HDB Flat Procedure Ultimate Guide For HDB Seller

SELL HDB FLAT PROCEDURE | HDB FLAT ULTIMATE GUIDE FOR HDB SELLER | HDB FLAT SELLER GUIDE

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Selling HDB Flat Procedure: Ultimate Guide For HDB Seller

Selling your HDB flat can be a significant milestone, whether upgrading to a private property, relocating for children’s school or work, or simply looking to downsize. The process can seem daunting as a homeowner, with many regulations, paperwork, and market considerations involved. However, with the proper guidance and preparation, selling your HDB flat can be a smooth and rewarding experience.

In this comprehensive guide, we will guide you through each step of the selling process, from understanding the market value of your flat to handling the final transaction. Whether you are a first-time seller or have gone through the process, this useful, easy-to-understand guide is packed with the latest insights and practical tips to ensure a successful sale.

We’ll cover essential topics such as preparing your flat for sale, navigating the HDB resale portal, marketing strategies, and understanding the legal and financial aspects of the transaction. By the end of this guide, you will have a clear roadmap to follow, making the sale of your HDB flat a well-informed and confident decision.

Let’s get started!

Step 1: Understand Your Motivation For Selling

It is important to be clear about why you are selling your HDB flat. There are many reasons why homeowners decide to sell. Here are some of the common reasons that we have encountered all these years and have helped many families in their HDB flat transactions:

  • The family size expanded; thus, they needed to upgrade to a bigger home.
  • Children grew up and bought their own houses. Thus, parents decided to downsize and cash out for retirement.
  • Young parents decided to relocate nearer to their children’s school for convenience.
  • The working class chose to upgrade from HDB flats to private property.
  • The Family must sell to collect BTO flats, New EC, or New Condo keys.
  • Divorced; thus, they need to sell as per the final judgment.
  • Administrator/Executor case: to help the deceased sell the HDB flat.

How about yours? Have a clear reason in mind and ask yourself if you need to sell or if it is better to stay put.

Step 2: Understanding The Real Estate Market

Understanding the Singapore real estate market is advisable and essential before selling your HDB flat.

Check the recent transacted price in your area, the current asking price of your competitors, and the indicative valuation of your HDB flat. With this information, you can better set a more realistic selling price that is not undervalued or overvalued.

Next, you also need to check the supply of your next home that you want to buy. If there isn’t much supply, you either need to temporarily rent a place after you sell while looking for your next ideal home, or you may need to move back to your parent’s place for the time being temporarily.

Step 3: Get The Number Right

Calculate the sales proceeds you can receive after you sell and know how much cash and CPF savings you have in hand to buy your next home.

You must also check your eligibility for your next home mortgage and the maximum amount you can borrow to determine your budget.

If your next home is an HDB flat, you must apply for the HDB Flat Eligibility (HFE) letter and obtain HFE approval to confirm your buying eligibility and the loan amount you can borrow from HDB.

If your household income exceeds the income ceiling, you will need to work with the bank to obtain the mortgage in principal approval to know the maximum loan you can borrow to work out your budget.

After working out all the numbers and determining that your number is workable to execute the plan, you may proceed to kickstart the selling process.

Step 4: Register Intent to Sell

This step is essential when you have decided to sell your HDB flat. By registering the Intent to Sell, the HDB will provide a preliminary assessment of your eligibility to sell your HDB flat. It will also provide information about the Permanent Resident (SPR) Quota & Ethnic Integration Policy (EIP) and Singapore for your block, the upgrading status, the billing of upgrading costs, the recent transacted prices of nearby flats, and compute your estimated sales proceeds. In addition, it will indicate when you may grant an OTP (Option to Purchase) to potential flat buyers, which is seven days after registering the Intent to Sell. There’s also a reminder to plan for your next housing.

After registering the HDB Intent to Sell, the portal will prompt you to download a copy of the HDB OTP. There is no fee for registering an Intent to Sell. The HDB Intent to Sell is valid for 12 months.

Do note that you must register the Intent to Sell seven days before granting any buyer the Option to Purchase (OTP). The Intent to Sell must be valid when you grant the OTP to the buyer(s) and submit the resale application.

When you engage a real estate salesperson (RES) to sell your HDB flat, the RES should guide you in registering the Intent to Sell through HDB and work out all the numbers before executing the plan.

Here is the link to register an Intent to Sell.

If you have any personal matters that may affect your HDB flat ownership, such as estate issues or divorce, you should settle these matters before registering the Intent to Sell. When in doubt, please clarify with HDB; alternatively, you may connect with us to understand more.

After registering an Intent to Sell, you may list your flat for sale using the HDB Resale Flat Listing (RFL) service on the HDB Flat Portal. If you have engaged a salesperson, you may appoint them to list your behalf on the HDB Flat Portal and major property portals such as PropertyGuru, SRX, 99.co, Edgeprop, or via social media marketing.

Here is the HDB Flat Listing (RFL) service portal guide for more information on the RFL service.

You can manage the sale on your own if you have the time and resources to handle inquiries from potential buyers or buyers’ agents. Alternatively, you may engage the services of a salesperson for a fee to handle all the inquiries and reach out to the bigger network pool of buyers via various online property platforms and agent networks to reach out to more potential buyers.

Step 5: Understanding the HDB Prescribed Option to Purchase (OTP) & Negotiate With Potential Buyers

Once you have accepted an offer from the potential buyer, you must grant the HDB-prescribed Option to Purchase (OTP) to the buyer. But before you grant the OTP to the buyer, you must register a valid Intent To Sell and fulfill the 7-day cooling-off period mentioned in the previous step.

The OTP (Option to Purchase) is a legally binding contract between you and your buyer. Thus, both parties must only use the OTP for the resale transaction. Under the Housing and Development Act, the HDB will not accept any other agreements or supplementary agreements relating to the resale transaction.

Each OTP has a unique serial number. You need to indicate the serial number when submitting the HDB resale application to HDB. Thus, the same OTP cannot be reused for other transactions.

If the buyer fails to exercise the OTP within the option period (21 calendar days), you may sell your HDB flat to another buyer using a new OTP with a new serial number.

When selling your HDB flat, besides negotiating the selling price, there are other considerations you need to negotiate with the buyers. Below are the considerations you need to communicate with the buyer before you grant the OTP:

  • Deposit:
    • When you grant the buyer the OTP, they must pay you an Option Fee; when they exercise the OTP, they must pay you an Option Exercise Fee.
    • The deposit consists of The Option Fee plus the Option Exercise Fee. You may negotiate the Option fee and Option Exercise Fee payable amount with the buyer, which forms part of the resale price.
    • Option Fee amount must be between $1 and $1,000. The norm is $1,000. (To be indicated in OTP Page 1).
    • Option Exercise Fee amount, including the Option Fee, must be at most $5,000. (To be indicated in OTP Page 2).
    • To secure independent proof of payment, we encourage you to accept the payment via digital payment mode.    
  • Number of days to submit HDB resale application:
    • You also need to discuss with the buyer the timeframe for submitting the resale application to HDB. Both parties must agree, as you must indicate the number of days to submit the resale application to HDB under OTP Clause 12 of the OTP on page 4.
    • Everyone has a different timeline that they need to follow to transition to the next home smoothly.
    • For pure selling without buying, many sellers commonly need 7 – 14 days to submit a resale application. However, if the purchase of the next home is involved, the timeline can get complicated. You may need 30 – 60 days as there are many scenarios, and each scenario may need a different timeframe.
    • Note that if you sell to a different ethnic group or SPR, the quotas may change over the month. Thus, it is advisable to submit the resale application as soon as possible to avoid unforeseeable changes.
  • Extension of stay:
    • The temporary extension of stay allows you to continue living in the HDB flat for up to 3 months after the HDB resale completion, but with the following criteria:
      • Subject to the buyer’s agreement, which you should secure before you grant them the OTP.
      • You must have committed to buying a completed property in Singapore before submitting the resale application.
      • Subject to the HDB approval.
    • The temporary extension of stay is helpful if you have committed to purchase a completed property in Singapore and need more time to move out.
    • If you have not committed to buying another completed property, HDB will not approve the temporary extension of stay request.
  • Enhanced Contra Facility (ECF):
    • The Enhanced Contra Facility (ECF) helps you to save time by allowing you to use your cash proceeds and the refunded CPF savings from your current HDB flat to complete the purchase of your next HDB flat concurrently. The ECF, in turn, helps to reduce the payment out of your pocket.
    • ECF involves three parties, they are:
      • The contra party (seller of flat A cum buyer of flat B),
      • Flat A buyer, and
      • Flat B seller.
    • When you are using the ECF, the other two parties will not be able to apply for ECF.
    • Read here for more info about the terms and conditions of ECF.
  • Any other matters:
    • Other matters may include leaving furniture or appliances behind or requesting fixtures be taken with you due to sentimental value, etc. You should write these items in the HDB OTP’s inventory list on the OTP page 9.

Once both parties agree on all the above, you are ready to grant the OTP to the buyer.

Step 6: Wait For The Buyers to Exercise the OTP

As mentioned earlier, the option period is 21 calendar days, including Saturday, Sunday, and PH from the day you grant the OTP to the buyer. The OTP will expire on the 21st calendar day at 4 pm.

Suppose the buyers decide to proceed with the purchase. In that case, they must exercise the OTP within the option period by signing on the OTP page 8 Acceptance section and returning the OTP to you with the Option exercise fee.

Suppose the buyers decide not to proceed with the purchase. They will not exercise the OTP and let the Option expire. The buyers will forfeit the Option fee paid, and you will keep it.

You cannot grant another OTP to another buyer during the option period. Only if the buyer lets the OTP expire on the 21st day at 4 pm. can you grant a new OTP to another buyer.

Step 7: Submit the HDB Resale Application

After your buyers have exercised the OTP, you and your buyers must submit the HDB resale application no later than the days indicated under the OTP clause 12 on page 4.

HDB will verify the information you and your buyers submitted once they receive the resale application. Suppose the application and all the documents are in order. In that case, HDB will notify you and your buyers via SMS or email of HDB’s acceptance of the resale application within 28 working days.

Please note that both parties (Seller and Buyer) must submit their respective portions of the HDB resale application. The second party should submit the HDB resale application within seven calendar days from the date the first party submitted it. Otherwise, the resale application will lapse, and both parties must resubmit it and pay the application fees again.

The resale application fee is as follows:

  • 1 and 2 room flat: $40
  • 3-room flat and bigger: $80

If you engaged a real estate salesperson (RES), aka property agent, your agent will submit the HDB resale application on your behalf.

You must submit the resale application via HDB My Flat Dashboard if you do not engage an agent.  

The information needed for the HDB resale application is as follows:

  • Option to Purchase (OTP) details:
    • Resale flat address
    • Buyer’s particulars
    • OTP serial number
    • Option date
    • The purchase price, option fee, option exercise fee
    • Acceptance date (OTP exercised date)
  • You and your co-owners particular documents needed (if applicable):
    • ID or passport (for non-SC)
    • Duplicate Lease if previously issued to the homeowner(s). Some homeowner(s) may keep the Duplicate Lease with HDB.
    • Divorce Documents.
    • Power of Attorney, Lasting Power of Attorney
    • Letter of Consent from Official Assignee, if applicable.
    • Death cert, Grant of Letter of Administration / Grant of Probate, Last Will / Inheritance Cert of the deceased, or Order of Court to sanction the sale if the flat owner is deceased.
  • Declaration regarding your sale:
    • Undischarged Bankrupt: before selling your HDB flat, you may need to obtain prior consent from the Official Assignee (OA).
  • Engaging solicitors:
    • You must indicate the appointed solicitors who will act for you for the HDB resale transaction.
    • Suppose you have an outstanding housing loan with a financial institution (FI) or bank. In that case, you must engage private solicitors to act to redeem the housing loan and also request the acting letter from the law firm for the HDB resale application.  
    • If you have an outstanding housing loan with HDB or you do not have an outstanding loan, you may appoint HDB as your solicitors.
  • Application for Enhanced Contra Facility (ECF):
    • As mentioned earlier, ECF allows you to sell and buy simultaneously, using your sale proceeds and CPF refund from the selling to complete the selling and the buying concurrently.
    • You must indicate in the HDB resale application if you are applying for ECF.
  • Appointing a Power of Attorney:
    • You must appoint a Power of Attorney if you are unable to sign the OTP or any legal documents personally when you sell your HDB flat. You need to indicate when you submit the HDB resale application.
  • Application for Temporary Extension of Stay (if applicable)
    • If you have committed to purchasing another completed property in Singapore and need more time to move out, your buyer has agreed to your Temporary Extension of Stay request. You must indicate the Temporary Extension of Stay application in the HDB resale application.

Step 8: HDB Safety Inspection

The HDB branch will contact you for an HDB flat inspection within five working days after accepting the HDB resale application.

The purpose of the inspection is to check whether there is any unauthorized renovation work done to the resale flat and whether the flat windows comply with the prevailing requirements of the Building & Construction Authority (BCA)

If your HDB inspection fails, you must engage a contractor from the directory of renovation contractors (DRC) or a BCA-approved windows contractor to rectify the situation and submit the Retrofitting Form (form B1) to the HDB branch office as soon as possible.

Step 9: Endorse Resale Documents

HDB will prepare the necessary resale document for both parties to endorse in about three weeks from the HDB resale application acceptance date.

When the resale documents are ready, HDB will notify you and your buyers via SMS to endorse the resale documents when they are ready. You, your co-owner, and all the buyers must acknowledge and endorse the resale documents individually by logging in using your respective Singpass via My Flat Dashboard.

You and your buyers must endorse the resale documents within six calendar days. If you miss this deadline, HDB will send a reminder SMS and extend the deadline by two calendar days at the latest.

HDB will cancel the resale application if the documents are still not endorsed after the 2-day deadline extension. HDB will notify both parties of the cancellation.

Please read the instructions on the resale documents on what you need, namely:

  • Cancel all GIRO arrangements for your flat.
  • Pay property tax in full up to the end of the year.

Step 10: Payment of Fees

The fee payable depends on the solicitor you have appointed.

If you engaged an HDB solicitor to act in your sale, here are the fees that you need to take note of:

  • HDB legal fee: Transfer fee of flat ownerships to buyers and total discharge of mortgage fee,
  • Registration and microfilming: Title Search Fee
  • Miscellaneous fee

You may get an estimated fee payable using the HDB Legal Fees Enquiry e-Service.

If you engaged private solicitors to act in your sale, besides the legal fee by the respective law firm, you also need to prepare the fee payable for the total discharge of the mortgage if you have an outstanding loan with HDB. Below is the fee payable for the total discharge of the mortgage:

  • 1-room flat: $23.95
  • 2-room flat: $35.95
  • 3-room flat: $47.95
  • 4-room flat: $59.95
  • 5-room flat: $71.90
  • Executive flat/ maisonette: $83.90

You may need to pay Seller’s Stamp Duty (SSD) if you sell or relinquish your interest in your flat within the holding period of 3 years, starting on the day of your interest acquisition in the HDB flat. Please note that SSD holding period is not the same as the HDB minimum occupation period (MOP).

You must also pay your HDB flat’s property tax up to the end of the year first. The buyer will then reimburse you the prorated property tax from the completion date to the end of the year on the completion date at HDB Hub.

Lastly, you must also pay the town council service & conservancy charges (S&CC) up to the date of resale completion. You will receive the S&CC payment letter after the resale approval in the next step.   

Step 11: Get resale approval

After you and your buyers endorse the resale documents and make the necessary payments, the HDB will grant the resale approval for the resale transaction in two weeks’ time and notify you and your buyer via SMS and email. HDB will post a copy of the approval letter on My Flat Dashboard.

Please read the instructions on the approval letter on what to do before the resale completion appointment, Namely:

  • Download the town council service & conservancy charges (S&CC) letter and bring it to the town council to pay the S&CC fee up to the date of resale completion.
  • Download the BCA Windows retrofitting declaration form for your Windows retrofitting declaration.
  • Arrange to vacate the flat by resale completion.
  • Prepare all keys to hand over upon completion of the appointment.

Step 12: Attend completion appointment

Before attending the resale completion, you will need to allow the buyer to conduct a final inspection to ensure the HDB flat is vacated and all movable and bulky items removed.

The HDB resale completion date is about 8-weeks from the date of the HDB’s acceptance of the resale application. The appointment schedule will be notified via SMS. You may log in to My Flat Dashboard to retrieve the completion letter for the appointment details.

You must follow the instructions to prepare for the completion appointment and bring the items listed in Annex A of the completion letter. Namely:

  • All keys
  • NRIC(s)
  • Endorsed town council service & conservancy charges (S&CC) letter.
  • BCA Windows retrofitting declaration form
  • Duplicate Lease, (if any)
  • Any other items listed in Annex A

If you have requested a Temporary Extension of Stay, you do not need to vacate the house yet on resale completion day, and you do not need to bring the keys along for the resale completion appointment.

Miscellaneous Steps You May Missed Out:

Get You Mailing Address Changed

Remember to change your mailing address to ensure you receive all important mail. In addition to changing the NRIC address, here are some common organizations that sellers may have overlooked, including telcos, banks, insurance, charities, and memberships.

Terminate Utilities Account

You need to arrange to terminate the utilities account. You may get the buyer to apply to open their new utilities account about 2 weeks before the resale completion and indicate the turn-on date on the handover date.

Once the buyer applies for their account, your account will be automatically terminated on their turn-on date. You should receive an sms notification about the buyer applying to open a new account.

Terminate or Relocate Internet Service

You need to terminate or relocate your existing internet service so the buyer can apply and connect their internet service.

Summary

Selling your HDB flat is a significant undertaking that involves careful planning, strategic marketing, and diligent execution. Each step requires attention to detail and a thorough understanding of the process, from preparing your flat to negotiating with buyers and handling legal documentation. By following the guidelines in this guide, you can confidently navigate the complexities of selling your flat.

However, the Singapore real estate market can be unpredictable, and the selling process can be time-consuming and challenging, especially if you’re managing it alone. Engaging a professional real estate agent can make all the difference. An experienced agent brings market knowledge and negotiation skills and provides invaluable support in managing the entire transaction, ensuring no detail is overlooked.

Selling your HDB flat doesn’t have to be overwhelming. With so many steps involved, from finding the right buyer to navigating all the paperwork, it’s easy to feel a bit lost. But you don’t have to go through it alone.

Why not have a friendly, knowledgeable guide by your side? As a real estate agent who understands the ins and outs of the market, We’re here to make the process smooth and stress-free for you. Whether you’re selling for the first time or have done it before, We’re ready to help you get the best price and handle all the details so you can focus on what matters most.

Let’s chat if you’re considering selling your flat or want some advice on where to start! Reach out today for a no-obligation consultation, and let’s make your HDB flat sale a positive and rewarding experience.