- Are you comfortable to shortlist viewings yourself via online app
- e.g. property guru, 99.co , SRX and etc.
- Do you have time to arrange for viewings?
- I find it quite manageable for me, and i enjoy the flexibility & filtering in doing it myself
- Okay to liaise with bankers and lawyers yourself?
- it is not too daunting, for me is the uncertainty of what exactly am I supposed to do but my friend who just been through the process has been a great help and thus I decided to document this down to help all the DIY buyer :)
Following is the process in the HDB Resale portal (kudos to HDB), it actually guides you through all the process. In the section below, I will also document the details for each steps :)
Step 1: Register Intent to Buy
Do this before you even start house viewing :) It doesn't expires, so no need to wait until you shortlist a house.
*** Important ***
Before you proceed to step 2, sort out your finances first. E.g. either get your HLE (for hdb loan) approved or get in principal approval from bank first (for bank loan). This is important, this process let you know whats your max budget for a house.
I decided to take bank loan due to the low interest environment, so the steps below is based on bank loan, but what I understand is that HLE (HDB loan) is even more straight forward.
Step 2a: Search for a suitable flat
My whole house hunting process took 6 months!!! We settled on a house that meets 75% of our requirements, is really hard to find 100% match at a good price point especially in this seller market (2020 post circuit breaker). I will write a separate post on what to look out for in house selection taking renovation cost into consideration.
Step 2b: Making an offer & getting OTP
The negotiation process is a bit daunting, but I guess also because I am not good at bargaining. Do not be stressed by seller agent into offering something more than your comfortable price (always set a max price in your mind at what price would you stop increasing), just ask your self if you miss this house at this offer, would you regret?
Before you decide to pay the $1K (or lesser) to get the OTP, ensure there is agreement on who to pay for what (e.g. S&C charges, property tax etc) if there is an extension.
Step 3: Choose Mode of Financing
You should have already decided which mode of payment in step 1 before you start to perform house viewing, so this part is more of filling in the form.
Step 4a: Request for Valuation
*** Important ***
Once you get the OTP, suggest to immediately arrange for valuation (you need to do it within 2 working days, but I suggest asap as it eats into your total window for loan application, especially if it is bank loan), and you only have 21 days in total to exercise your OTP (if you are using bank loan, ensure your bank loan is approved before you exercise your OTP).
As mine occured during Christmas period, and many were on leave, I finally get my bank loan approved only few days before my OTP expires despite getting my valuation in only a few days.
(also, it is up to you to decide whether or not to share the valuation result with the seller).
Step 4b: Exercising OTP
This is your true path of no return, once you exercise you can't back-out (unless you are prepared to compensate $$$).
Before you exercise, ensure your bank loan is approved, the approval date must be before your exercise date. Once you exercised, inform your banker, and he/she would advise you when to engage the law firm and what to provide to the law firm. You can start engaging the law firm once you received the cue from the banker.
Step 5: Submit Resale Application
Ensure you get in sync with the seller/seller agent before you submit, as they need submit within 7 days from the date you submitted. For mine, my seller wants to drag out the whole process (to meet their reno timeline) and they only want me to submit nearer to deadline. This kinda gives them almost 1 free month of stay, thankfully I am not in a super hurry to move in though I would prefer they don't drag it out.
*** Decide your insurance coverage ***
You can go with CPF's home protection scheme (decreasing coverage) vs private insurance's term insurance (not decreasing) / mortgage insurance (decreasing coverage). HPS is cheaper in general but it doesn't cover last 3 years of loan period + the coverage decrease over time despite fixed fees ( I read so).
Imho, if I am going with decreasing coverage I would just take HPS, but I prefer the non decreasing one so I took the private term insurance. Note that private insurance can add rider for CI and etc., depending on your need, for this I think (not very sure as I can't remember) need to ensure cover is at least 110% of your loan amount if you are taking private one (check with your financial planner). Before you sign, do check with your banker if their loan package have any limitation (e.g. if can take other private insurance or must use theirs).
HPS premium calculator:
https://www.cpf.gov.sg/eSvc/Web/Schemes/HomeProtectionSchemePremium/HomeProtectionSchemePremiumLanding
Step 6: Acknowledge Resale Documents
You will receive an sms from HDB to acknowledge the docuemnts, but just ensure you remember to login to acknowledge the documents and pay fees in next step. I missed out next step I thought that was to be done after I sort out the payment schedule with the law firm, thankfully the HDB officer is very nice, called to remind me to do it.
This is how the SMS will look like:
Step 7: Pay Fees
Follow the steps in the portal and made payment (if any).
Step 8: Resale Application Approved
Wait for HDB's sms to inform you if the resale application is approved. Generally it should be alright if all documents are filed and seller's house don't have any issues when the HDB personnel came down to check.
Inform the law firm that the resale application is completed, and date time for completion, they will then advise you the necessary next step (8b).
Step 8b: Meet the lawyer
Meet up with the lawyer to sign the necessary documents, and pay the legal fees (I paid mine via CPF, so no cash upfront required). Both legal fees for me and my friend are the same despite different room type, my legal fees is 2K SGD.
At this point you should also decide how you want to pay your housing loan (e.g. what % cash vs CPF). Even if you intend to do full cash, do setup some amount for CPF so that the setup is all done and you can easily change this setting in CPF website (e.g. set to a very very low amount).
Unless you are cash rich, I suggest to use max CPF first as reno might take a toll on your cash balance. You can always login to CPF subsequently to pay for some of the amount used for housing with cash later on.
Before completion, ensure your insurance coverage is done and in effect if you are taking private insurance. Login to CPF website to apply for exemption:
https://www.cpf.gov.sg/eSvc/Web/Schemes/ApplyForHpsExemption/
HPS details:
https://www.cpf.gov.sg/Members/Schemes/schemes/housing/home-protection-scheme
Step 9: Attend Completion Appointment
If you are taking bank loan, your lawyer can represent you (but you do need to sign a set of documents with them beforehand) and you do not need to go down personally for the completion appointment (however, if it is your first house, you can go down and experience it yourself :)).
After the completion, your lawyer will pass you a set of signed documents also.
After about 6 weeks (my HDB completion is on Apr 20, and in mid June my final set of documents for title deed transfer is done), your lawyer will pass you your final sets of documentation to show you that title deed is transferred.
For those with extension for your seller, I will share a separate post on that to cover more details later on.
All in all, while I got the OTP on 21 Dec 2020, I will only be getting my keys on 20 July 2021 taking seller's 3 months extension into consideration. This is longer than usual due to:
1. 3 months extension
2. Seller drags out the entire OTP and application process to meet their reno timeline.
