Navigating the HDB Resale Process: A Comprehensive Guide for Singaporean Homebuyers


Looking for a home without the lengthy waiting period? Whether you’re single, a newlywed, or a growing family eager to move in soon, opting for a resale HDB flat is one of the solutions. Unlike the typical 3-6 year wait for Built-To-Order (BTO) flats, resale flats offer a quicker path to homeownership without the uncertainty of a balloting system. Furthermore, HDB resale flats allows homebuyers to pick from a wider variety of locations and unit configurations. 

This article is aimed at guiding you through the purchase of a HDB resale flat, providing step-by-step insights. Our aim is to empower you with the knowledge to navigate challenges and make informed decisions in the HDB resale market, ensuring you secure a home that suits your lifestyle and financial goals. We have also included links to HDB’s website in some sections to facilitate your understanding of the resale process. 

Process for Purchasing a HDB Resale Flat

1. Apply for a HDB Flat Eligibility (HFE) Letter

Your journey begins with a quick and crucial step – registering for a preliminary HFE check. This brief online process, completed via the HDB portal using SingPass, takes just around 10 minutes. After inputting your details, you’ll promptly receive an overview of your eligibility for a resale flat, CPF Housing Grants, and HDB loan.

If deemed eligible, the next step involves applying for the HFE letter within 30 days of the preliminary check. Upon application, expect to receive the official HFE Letter within approximately one month. You’ll be notified of its readiness through SMS. The HFE letter remains valid for nine months from the date of issue. The streamlined process, implemented on May 9, 2023, consolidates all necessary information into a single, user-friendly procedure. For a comprehensive understanding of the HFE letter, refer to our detailed article on the topic.

2. Pick your desired flat and obtain an Option To Purchase (OTP)

At this stage, you’ll make your final choice of property from a shortlist, negotiate a price with the seller, and secure an OTP. Utilise the resale flat prices e-service for well-informed decisions. Both parties must truthfully declare the resale price to HDB, without engaging in any supplementary agreements that may impact the declared price.

Before issuing the OTP, the seller must have registered an Intent To Sell and wait out a 7-day period. The OTP, valid for 21 days, necessitates an Option Fee, mutually agreed upon and ranging from $1 to $1,000. It’s important to note that sellers cannot issue another OTP to different buyers until the OTP granted to you has expired. At this point in time, signing on the OTP for you as a buyer is not required yet.

3. Secure Your Mode Of Financing

To secure an OTP,  which is necessary for a flat purchase, ensure you possess a valid HFE letter from HDB if opting for their housing loan. If you’ve chosen an HDB loan in your HFE application, the loan outcome will be specified in the HFE letter.

If you plan to obtain a housing loan from a financial institution, you must have a valid Letter of Offer (LO) before exercising the OTP. While applying for the HFE letter on My Flat Dashboard, you can simultaneously request an In-Principle Approval (IPA) and LO from participating financial institutions. Under the new HFE process, you can directly apply for an IPA with up to 6 participating financial institutions via the HDB Flat Portal.

4. Submission of Request For Value

If you’re using CPF savings or a housing loan for the flat purchase, submit a Request for Value by the next working day after receiving the OTP. This step is not needed if you’re not utilising CPF savings or any housing loan for the purchase.

On My Flat Dashboard, confirm your flat’s financing method and initiate a Request for Value. Following the Request for Value outcome, decide whether to proceed with the flat purchase. This assessment establishes the flat’s value, guiding CPF usage and housing loan amounts from HDB or your chosen financial institution (FI), unless advised otherwise by the FI.

Submit the Request for Value, along with OTP Page 1, by the next working day after the Option Date. A $120 processing fee (including GST) is applicable to HDB. If a salesperson is engaged, they may submit the Request for Value on your behalf via e-Resale or Estate Agent Toolkit. Notification of the outcome arrives via email within 10 working days.

Note: The Request for Value outcome remains valid for 3 months in My Flat Dashboard. Both buyer and seller must submit their parts of the resale application within this period. Failure to do so requires a new Request for Value. Wait for the outcome before exercising the OTP during the Option Period.

5. Convert In-Principle Approval into a Letter of Offer & Submit Resale Application

If you’ve secured an IPA while applying for the HFE letter, convert it into a LO before exercising the OTP during the Option Period. Upon OTP exercise, both you and the sellers must submit your respective parts of the resale application.

HDB will verify the information provided. If the application and documents are in order, you and the sellers will be notified of HDB’s acceptance via SMS or email. The processing time is approximately 8 weeks, marking the earliest completion date. If a deferred completion is desired, coordinate with the sellers and provide written confirmation via MyRequest@HDB, signed by both parties.

6. Confirm Receipt of Resale Documents and Fulfil Payment Obligations

After receiving a complete resale application and all supporting documents from both you and the sellers, HDB will verify eligibility and approve the application within 28 working days. Once accepted, the required documents will be prepared for endorsement, available approximately 3 weeks later. Both parties must then acknowledge, endorse the resale documents, and settle the required fees.

You and the seller will be prompted via SMS to login to My Flat Dashboard once the documents are ready. Failure to endorse within the stipulated time frame may result in the cancellation of the resale application. Learn more about the required documents here and the necessary fees here.

7. Get Resale Approval & Attend Completion Appointment 

Once documents are endorsed and fees paid, HDB will grant you an in-principle approval for the resale transaction approximately 2 weeks later. Following this, you would need to attend a resale completion appointment. You will be notified via SMS and the information of the appointment will be posted on My Flat Dashboard, approximately 8 weeks after HDB accepts the resale application. Details about arrangements and required documents for the Resale Completion appointment can be found here.

Financial Considerations

In addition to administration fees throughout the resale process, be mindful of various other expenditures. While individual costs may appear small, their cumulative total can become significant. Key considerations in this non-exhaustive list include:

Ensuring you have sufficient savings for the down payment

If you choose a HDB Loan, you can secure up to 80% of the purchase price or market value, whichever is lower. The balance 20% can be settled using cash, CPF Ordinary Account, or a combination of both. No minimum cash payment is required when opting for a HDB Loan.

If you are opting for a housing loan from participating banks, the maximum LTV ratio is 75%, if it is your first housing loan. Of the remaining 25%, 20% can be paid using CPF or cash, or a mix of both, while a minimum of 5% must be paid in cash. 

Keep in mind that not everyone qualifies for the maximum LTV ratio, as factors like other existing loans and whether the resale flat is your second or subsequent property will decrease the maximum amount you can borrow. This consideration applies to both HDB and bank loans. Whichever option you choose to finance the purchase of your property, you need to make sure you have a sufficient amount to meet the down payment requirements. 

Considerations for monthly mortgage payments

Apart from the significant amount needed to afford the down payment, you would also need to consider if you can afford the monthly mortgage payments among other loan obligations and monthly expenses. 

At the moment, the Total Debt Servicing Ratio (TDSR) is set at 55%. This means that your total monthly debt obligations including student loans, car loans, personal loans, in addition to your monthly mortgage payments cannot exceed 55% of your monthly income. Every bank and financial institution in Singapore must adhere to the TDSR framework when evaluating home loans.

Stamp Duty & Legal Fees

Buyer’s Stamp Duty (BSD) applies to all homebuyers in Singapore, irrespective of residency status. It could prove to be a substantial addition to your property’s purchase price. Note that BSD must be paid within 14 days, potentially requiring an upfront payment from your savings. You can later apply for a refund from the CPF board if desired. Current BSD rates for residential properties, effective from 15 February 2023, are outlined in the table below:

Engaging a legal solicitor for your resale flat purchase, whether through HDB or a private firm, typically incurs fees ranging from $2,000 to $3,000. These cover legal fees, HDB Conveyance Fees, and Registration Fees. To get a more accurate gauge on the cost of legal fees, visit HDB’s website here, which we have also discussed in Step 6 of the Process for Purchasing a HDB Resale Flat section. 

Additional Miscellaneous Expenditures 

Consider additional expenses like valuation fees, property agent commissions (if applicable), and home insurance. Since these costs can vary, it’s advisable to conduct thorough research and gather quotes to fine-tune your budget.

Choosing The Right Fit For You

This section offers key guidance to help you select the ideal home for you and your family. While the list is not exhaustive, it draws from our experience and highlights some crucial factors to consider.

In Summary

Choosing a resale HDB flat is a commendable decision, offering your family a secure and comforting home without enduring the extended wait times associated with BTO flats or depleting your savings on high-priced private non-landed properties. Opting for a resale HDB flat is a wise move, especially when backed by thorough research aligning with your family’s preferences and long-term goals. If you find yourself navigating the resale market and seek guidance to make the most informed choice, don’t hesitate to contact one of our expert consultants here. At PropertyLimBrothers, we are dedicated to providing assistance and ensuring your home-buying experience is as seamless as possible.

Disclaimer: Information provided on this website is general in nature and does not constitute financial advice or any buy or sell recommendations. 

PropertyLimBrothers will endeavour to update the website as needed. However, information may change without notice and we do not guarantee the accuracy of information on the website, including information provided by third parties, at any particular time. Whilst every effort has been made to ensure that the information provided is accurate, individuals must not rely on this information to make a financial or investment decision. Before making any decision, we recommend you consult a financial planner or your bank to take into account your particular financial situation and individual needs. PropertyLimBrothers does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this website. Except insofar as any liability under statute cannot be excluded, PropertyLimBrothers, its employees do not accept any liability for any error or omission on this web site or for any resulting loss or damage suffered by the recipient or any other person. 

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