26th Mar 2024 | Written by Pang Chun Enn
Understanding the Home Buying Timeline: HDB Resale vs Condo Resale
Starting on the journey of buying or selling a home, whether it’s a resale condo or HDB is rather daunting if you do not understand the timeline of the transactions.
When you are looking to resale properties, it means it carries a certain weight of immediacy, signalling the need to secure accommodation urgently or as soon as possible.
Two main reasons why having at least basic knowledge in resale home purchase timeline is important for you
Financial Planning
Purchasing a home comes with huge financial commitments. Understanding the timeline is the key to knowing when you will make lump sum payments of over five to six digits or when the banks will disburse the funds. Knowing these in advance will ensure that you will not be caught off guard on your journey to homeownership.
Accommodation Anxiety
When timelines are not negotiated and ironed out in advance, there is a possibility of finding yourself in a sticky situation. It can potentially cause you to have a window to face the issue of not having a place to stay for a period and require you to find urgent accommodation. This will definitely cause a lot of distress and anxiety during your home buying journey.
To jump into understanding either timelines, click here
HDB Resale Transaction Timeline
This a textbook timeline of a HDB Resale transaction. This timeline is normally planned/negotiated between agents representing respective parties or DIY buyers.
UP TO
21
DAYS
UP TO
90
DAYS
UP TO
28
WORKING
DAYS
UP TO
8
WEEKS
UP TO
3
MONTHS
Option Issue Date
In exchange for the Option To Purchase for the HDB unit that you offered, you can transfer S$1 to S$1,000 to the seller.
The market’s standard practice is to transfer S$1,000.
Buyer’s To-Dos:
Pay Option Fee ($1 - $1,000)
Pay HDB Valuation Fee to check for Cash Over Valuation (COV) ($120)
Seller’s To-dos:
Commit and wait for the buyer to exercise
Exercise of Option
To exercise the Option, the buyer must transfer S$4000 to the seller (if the option fee is S$1000) and sign the Option To Purchase with a witness.
This period is normally determined by seller’s timeline as sometimes they might need more time to find their next home, which is possibly subjected to extensions too.
Buyer’s To-Dos:
Pay Resale Submission Fee ($80)
Seller’s To-dos:
Pay Resale Submission Fee ($80)
Resale Submission Period
Once both parties submit the resale application, it will take up to 28 working days for HDB to accept the Resale Application.
Acceptance of Resale Application
Once the Resale Application is accepted by HDB, both sellers and buyer willl need to endorse their documents upon receiving SMS from HDB.
Buyer’s To-Dos:
Pay Stamp Duties
Pay Administrative/Legal Fees
Seller’s To-dos:
Pay Administrative/Legal Fees
Legal Completion
8 weeks after the Acceptance of the Resale Application will be the most common timeline.
However, there are two scenarios the completion date might be shifted and it must be mutually agreed by both parties (Seller and Buyer).
1. Buyers are doing contra (require funds to move from the previous sale to the next purchase)
2. Buyers require CPF funds/cash funds to be deposited into their CPF/Bank accounts.
HDB allows 3 months of Extension of stay after the sale of a unit. The extension is to allow a smooth transition for the seller to move into their next unit in time or renovate before moving in.
Buyer’s To-Dos:
1. Pay COV to Sellers (if have)
2. Pay Buyer Agent Fees (If have)
3. Receive House Keys (if no extension of stay)
Seller’s To-dos:
1. Pay Property Tax (if owe)
2. Pay Town Council Fees (if owe)
3. Pay Seller Agent Fees
4. Handover empty unit/keys (if no extension of stay)
Handover after Legal Extension
No doubt it’s not common to have further extension of stay after the 3-month legal extension, but it is still possible for some HDB transactions.
However, if there is additional further extension beyond the 3-month legal extension, it should be negotiated early on before purchasing. Commonly, rent will be payable as well to the buyer.
Buyer’s To-Dos:
Receive House Keys
Seller’s To-dos:
Handover empty unit/keys
This timeline shown above aims to help you understand the general time frame of an HDB transaction. However, the timeline is flexible and normally depends on the seller's circumstances.
As a buyer, before committing, you should always try to understand the seller’s timeline and see if it is acceptable to you.
Most commonly, if there is a clash of timelines between either party, the transaction can be displeasing and stressful for both parties. Hence, you should still look for a trusted/reliable housing agent if you are unsure of the timelines and negotiation process.
Private Property Resale Transaction Timeline
This is a timeline of a Private Property Resale transaction. The Option Period and Completion period are much less rigid and it can be either shorter or longer, depending on the requirements of both parties. This timeline is normally planned/negotiated between agents representing respective parties or DIY buyers. For the timeline below, I will state the market practice timeline for a private property transaction.
MARKET
PRACT
OF
14
DAYS
BTWN
8
TO
12
WEEKS
Option Issue Date
Before issuing the Option to Purchase, both parties must negotiate the timeline and ensure it is mutually agreed upon.
As the timeline for Private Property transaction is less rigid, the Option Period and completion period can be shorter/longer, depending on seller/buyer circumstances.
In exchange for the Option To Purchase the Private Property unit you wish to purchase, the common practice is to give a cheque or bank transfer of 1% of the sale price.
However, if your option exercising period is longer, sometimes it is possible the seller will request for a 2% Option Fee to increase the chances of the buyer being commited.
Buyer’s To-Dos:
Pay Option Fee (1% of Sale Price)
Ensure your loan is good to go
Seller’s To-dos:
Commit and wait for the buyer to exercise
Option Exercising Date
To exercise the Option, the buyer must bring a cheque of 4% of the sale price to their law firm and sign (exercise) it at their law firm in witness of their lawyer.
Once it is exercised, the completion period of between 8 to 12 weeks is the common practice.
Buyer’s To-Dos:
1. Lodge Caveat on the purchased unit
2. Pay Buyer’s Stamp Duty (within 14 days after exercising)
3. Pay the bank valuer to value the unit
4.. Pay Legal Fees
5. Make 20% Cash/CPF payment before completion to law firm
6. Ensure the Bank disburse the loan before completion
Seller’s To-dos:
1. Ensure the unit is cleared of any fittings
2. Sign legal documents (1 - 2 weeks before completion)
3. Handover unit keys to the seller’s law firm (1 day before)
4. Pay Seller Agent Fees (after completion)
Completion
For Private Properties, it is also possible to have an extension of stay after the legal completion period. However, the extension of stay will likely be negotiated into the sale price, or payable of monthly rent to the buyer.
This timeline shown above aims to help you understand the general time frame of a Private Property Transaction. However, the private property transaction timeline is even much more flexible and negotiable, hence it can differ from the example shown above.
As a buyer, before committing, you should always try to understand the seller’s timeline and see if it is acceptable to you.
Most commonly, if there is a clash of timelines between either party, the transaction can be displeasing and stressful for both parties. Hence, you should still look for a trusted/reliable housing agent if you are unsure of the timelines and negotiation process.
In conclusion…
In conclusion, understanding the timeline for both HDB and private property transactions is crucial for any prospective homebuyer or seller. Individuals can better manage their financial planning and alleviate accommodation anxiety by having a clear overview of the process.
Throughout both processes, communication and understanding between buyers and sellers are crucial. By following a negotiated timeline and being proactive in each stage, individuals can navigate the complexities of property transactions with confidence, reducing stress and worry during the transaction.
Ultimately, whether it's purchasing an HDB flat or a private property, having a basic understanding of the timeline and steps involved helps you to make informed decisions, and paves the way for a successful and fulfilling homeownership journey.
Wrapping up…
If you're seeking guidance on your home purchase, don't hesitate to reach out. I am here to help you navigate the complexities of real estate and assist you along your home buying journey.
Pang Chun Enn
R065301I
Disclaimer:
The information provided in this blog is opinions and it is for informational purposes only. It should not be construed as professional advice. The views and opinions expressed are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All content provided is intended to encourage discussion and exploration of topics related to the rental market. Readers are encouraged to conduct their own research and consult with relevant professionals before making any decisions. The author takes no responsibility for any actions taken based on the information provided in this blog.