Buying a resale flat: What you need to know

Buying your first resale flat is exciting, but also stressful. Don’t worry if it feels overwhelming at first. Everyone figures it out step by step.

Before you start scrolling property listings or dragging your parents along for viewings, let’s break down what you really need to know.

Why choose resale over BTO?

BTO come with significant market discounts and subsidies, but have a wait time of about three to four years. With resale, you get to move in within a few months — helpful if you’re planning to start a family soon or just want your own space fast. Plus, you get to pick from a wider variety of locations with solid MRT access, supermarkets nearby, and that die-die must-try chicken rice downstairs.

The resale process (in a nutshell):

1. Check eligibility: Use the HDB website to confirm your eligibility. Things like your age (21+), citizenship, and household income all matter. For example, singles can only buy resale flats from age 35. You can also check your eligibility via Step 1 of the HDB Flat Eligibility (HFE) Letter application. This letter lets you know how much HDB loan you can secure, and what grants you’re eligible for. It’s a must-have before you can go ahead with any flat purchase, so apply early. It also gives you a sense of how much you can afford.
2. Do your homework: Before diving into listings on HDB’s flat portal or other property listing sites, take time to decide on your must-haves and non-negotiables. Some filters are easy to apply on these platforms (like corner units or high-floor units). But others depend on your personal priorities - like staying near your parents for easier visits or to qualify for the Proximity Housing Grant.
3. View units in person: Don’t rely only on listing photos - visit the flat to check for issues like leaks, mould, or noisy neighbours. Try to view it at different times of day to get a better sense of light, noise, and traffic flow.
4. Negotiate price + Option to Purchase (OTP): Once you settle on a unit, you can start price negotiations, guided by the latest market information available on HDB’s website or other online sources. After you negotiate a final buying price, pay the option fee to lock it in. This gives you exclusive rights for 21 days to decide if you want to go ahead.
5. Get HDB valuation: After getting the OTP, submit a request for HDB to assess the flat’s market value if you are taking a housing loan and using your CPF savings for the flat purchase.
6. Exercise OTP + submit resale application: You’ve got 21 days to finalise. After that, you and the seller both submit applications through the HDB portal to move the process forward.
7. Go through HDB appointments + paperwork: After HDB accepts your resale application, the completion will typically be completed in about eight weeks.

Watch out for…

• Cash Over Valuation (COV): If the selling price is higher than HDB’s valuation, you pay the difference in cash. No CPF, no loan. For example, if the flat is valued at $500k but sells for $530k, you must cough up that extra $30k in cash. Most flat buyers do not pay any COV – when negotiating prices, you can check the latest market information, including the latest transacted prices of flats in the area, on HDB’s website or other online sources.
• Renovation needs: Older flats might need a major facelift, which means more money upfront. Think rewiring, hacking, or replacing old toilets. Easily $30k-$50k depending on scope and contractor.

Extras:

1. Do you need a property agent?

   Not necessarily. Many first-time buyers manage their flat search themselves using HDB's Resale Flat Listing service and other property listing platforms. But an agent can be helpful if you’re short on time or unsure about negotiation and paperwork. Buyer agents usually charge about 1% of the purchase price. Example: If the purchase of the flat is $400,000, your agent will charge you $4,000 for their service.

2. Going DIY? Here’s what to note (especially for steps 5–8):
   
   • Be prepared to handle all the paperwork, including the Option to Purchase (OTP), HDB submissions, and timeline planning. Check the HDB website for detailed step-by-step guides on the buying process.
   • If the seller requests an extension of stay, meaning they’ll continue living in the flat after the sale is completed for a short period of time, you can negotiate for a price reduction or ask for free rental during that period.
   • Always cross-check eligibility for grants, and ensure your financing (bank loan or HDB loan) is sorted early so you don't miss deadlines.