The Transition Peroid Of Selling And Buying And Valuation

[Junkay 1]

I pretty much guess this has been discussed plenty times but I just wish to hear from more people with fresh tactics, and the second part is about valuation.

Resale market

Firstly, what is the method to sell your flat and buy another one at the same time? How do we plan so that we wont get stuck with no house and buyers pushing for you to get out so that they can do reno. Or there must be a period when you have to rent a place for sometime while you wait for your new resale flat to finish reno. Or you can buy then sell?

Direct HDB

Is it also true that if you buy a flat from HDB, you can move in to the new flat first and when the selling of your previous flat's transaction completes, start payment for the flat. (New flat meaning the BTOs and also the repurchased flats)

Secondly, there are many versions of this. I knocked down one wall of my 3 room flat to expand my living room. So now there is one huge master and one living/dining. Would the valuation be stated as a 2 room or a 3 room? Would the valuation fall because I revamped the whole place? (when I mean revamped, I mean totally)

Thank you everyone! I hope some industry players can also vet the infomation about HDB regulation.

Edited April 11, 2008 by Junkay

[applefreak 1]

resale

if you can find a flat that you like and a buyer for your flat at the same time

you should be able to complete the transaction

if you are using the funds from selling your flat to buy the other flat, think it's called contra but you can only do it if the buyer/seller is not doing the same thing

as to renting a place to stay, you can arrange the completion dates in such a way that you have time to complete renovation before going for the 2nd appt of your existing flat

but the best laid plan may not work out if you meet a lousy seller

you can always buy then sell, provided you don't need the funds from selling your flat

i.e. you have the requisite amt of money to pay for everything - 10% down + stamp fees + misc fees

direct hdb - you start paying the installment the DAY you take your keys

as for the valuation, it is based on the room-type defined by HDB

the valuation mostly depend on the location, size of unit and surrounding amenities

how your renovation looks is not really an issue, the only thing it'll affect is the COV coz your buyer might not want to pay so much cash if he/she needs to do a complete overhaul :notti:

[Junkay 1]

Apple freak : Thanks for the info. You are always one of the fastest to reply to anything. You hitting mosquito ah?

As with the COV part, I am actually counting on the design to ask for more COV! ahahah

[applefreak 1]

hehehe no lah, just eat snake in office

if continue work non-stop think my head will split open

actually design is really really subjective

as what is nice to you might be so so to another

usually COV is higher for well-maintained flats or flats that doesn't require a lot of hacking/building back of walls

unless you can find a buyer that has similar taste with you

[hello88 2]

buying and selling?

Most people would advise to buy first then sell. I bought my 2nd resale flat (upgraded) then I sold my place, I think the duration was about a month later. Went for 1st appointment for my newly bought flat then about a month later then went for 1st appointment with buyer of my 4-room flat. During that time, really felt as if always going back to HDB hub as it was 1st appointment X 2 and 2nd appointment X 2.

Done some negotiation with seller and buyer as seller wanted to delay completion as she wanted to stay on after 2nd appointment. Seller's request came in pretty late and we also had to ensure that we start renovating the flat before 7th month and moved in at specific dates as had to hand over keys to our buyers. Luckily we managed to sell our flat unlike a friend of mine...here's what happened.

My friend went ahead to buy a flat (downgraded), gone for 1st, 2nd appointment, done simple reno and moved in. Throughout the entire period, she tried to sell her place w/o any luck. A number of buyers 'complained' about the layout as the previous owner had knocked down a room to make the MBR bigger. I think she couldnt sell due to the weakening property market as there were more supply then demand. I think she had no choice but to pay housing loan for both flats. For my case, I started to pay housing loan for my new flat after 2nd appointment (or was it upon completion of sales??? cant recall). The HDB officer told me that the housing loan for my old house would stopped (terminated) once I go for the 1st appointment with my buyer (to sell my flat).

Edited April 12, 2008 by hello88

[Junkay 1]

So when would the money from the first flat come in? Would the loan amount change once the sale money comes in?

I am just afraid that I might not have enough to settle the second flat's fees like depsit stamp duties etc before the sales proceeds come in. What did you all do?

hello88 : Yikes! Hopefully that doesnt happen to me.

My hope is to sell to newly weds and singles.

Edited April 14, 2008 by Junkay

[applefreak 1]

the money will be given to you on the 2nd appt

refund to cpf a/c and excess (if any) paid in cheque

as for paying for the 2nd flat, not sure if it's on the 1st or 2nd appt

coz new flat only got one appt

[hello88 2]

I am just afraid that I might not have enough to settle the second flat's fees like depsit stamp duties etc before the sales proceeds come in. What did you all do?

yup, that's the issue that upgraders have to worry abt. During my time, we didnt consider much abt it though we're not exactly CPF rich. Our CPF was wiped out after we signed on the dotted line. We took 30 years for our housing loan just to play safe and intend to pay off within the next 5 years (we're mindful of the withdrawal limit so must ensure that we have sufficient that we area office to clear the loan). Our CPF was down to zero but $ came in again after we sold our flat. We didnt reduce the housing loan (because we're mindful of the withdrawal limit again) and have dump most of it into investment. Really hope to clear the housing loan in less than 10 years.

[eeyoreddon 0]

I'm actually an upgrader to EC. However my TOP has been delayed and delayed. Thought the selling and move in will be smooth but now ....

[Junkay 1]

Apple freak : Strange that you should mention excess. I wrote to the HDB asking what does their online sales calculation mean when it says excess paid in cash. I thought if the flat was sold above COV then you get cash? Are u saying that if i bought the flat at lets say 200k and valuation now is about 220k and i sell at 220k. once sold I pay off the existing mortage loan the excess is paid to me in cash? please let it be so good please let it be so good......

Hello88 : Your situation is quite cheem. Didnt quite understand the part about "we area office to clear the loan". So when you bought your second flat you had to top up with cash? Or there was enough left in the CPF to pay the duties etc.

I am just lucky that I parked money into investment and used just enough to cover the duties involved in my first flat.

eeyoreddon : EC is HDB right? Cannot make them pay some penalty? you are incurring cost everyday they are late! HDB is H E L L's Death Bed!

Looks like there isnt a way out of this except to pray for lottery again! Sigh

This just came in fresh from HDB

Qn: I intend to buy a new flat from HDB in a few years time and would like to know certain regulations involved. In order for me to afford putting down the mandatory 10% down payment, I need to sell my existing flat first. Is there a way that I can buy the new flat and sell my flat concurrently but only start payment when the money from the selling is in?

You need to sell your existing flat within 6 months from taking possession of the flat you are buying.

Contra Facility for buying a flat from HDB

One of the eligibility conditions to request for Contra Facility for buying a flat from HDB is that you must be eligible to obtain a concessionary loan from HDB.

This is because the Contra Facility (to buy a flat from HDB) will require a temporary mortgage loan to be granted before the resale completion of the existing flat. Hence, if not eligible for a concessionary interest rate loan from HDB, then will not be eligible to apply for the Contra Facility. Applicants who are not eligible for the HDB's concessionary interest rate loan, and need to approach the banks/financial institutions to apply for a loan to finance the new flat, are also not eligible to apply for the Contra Facility.

For information on the Contra Facility, you can use this link:

http://www.hdb.gov.sg/fi10/fi10201p.nsf/WP...Menu=Procedures

Qn: Is there a similar method for resale too? I pay the new resale only with the sale of my existing flat. Is it something called contra?

Enhanced Contra Facility (ECF)

The ECF allows an owner who is selling the existing HDB flat ('Flat A') to use CPF refunds and the cash proceeds from selling the existing flat to finance the purchase of a resale flat ('Flat B'). This is provided that the buyer for Flat A and seller for Flat B have not applied for such facility for their respective flats and the contra party is not getting a housing loan from the bank or financial institution to finance the purchase of Flat B.

The contra parties must not be an undischarged bankrupt or have any bankruptcy proceedings commenced. If private solicitors (lawyers) have to be engaged, we will not be able to process the applications under ECF.

To apply for the ECF, you need to submit both the applications for sale and purchase of flat together. All parties must agree to apply and comply with the terms and conditions of the ECF and have to sign the ECF Application form. Both resale applications have to be processed and completed at the same time.

For more information on the ECF, you can use this link:

http://www.hdb.gov.sg/fi10/fi10201p.nsf/WP...ty?OpenDocument

Edited April 15, 2008 by Junkay

[applefreak 1]

Apple freak : Strange that you should mention excess. I wrote to the HDB asking what does their online sales calculation mean when it says excess paid in cash. I thought if the flat was sold above COV then you get cash? Are u saying that if i bought the flat at lets say 200k and valuation now is about 220k and i sell at 220k. once sold I pay off the existing mortage loan the excess is paid to me in cash? please let it be so good please let it be so good......

so sorry to dash your dreams so fast

COV is required to be declared as part of the selling price

and if you valuation is not enough to cover your outstanding loan + cpf withdrawal amt (including accrued interest)

the COV will go towards repaying your cpf a/c

excess means after paying off outstanding loan

AND returning to your cpf a/c the withdrawn amt + accrued interest

the rest will go towards you in cash (if any)

e.g. you borrow $100k for your current flat, remaining loan is $50k. cpf withdrawal is $150k and accrued interest is $30k. you'll need to sell your flat for more than $230k in order to get any cash.

[Junkay 1]

I think I just found out a solution to my predicament ... I hope it works.

I never did mention that I didnt take a grant for my first flat. So based on the financial plan on HDB website, it would be included in my CPF when I buy a second resale. Can that be used as the initial 10% payment, stamp duties etc?

[hello88 2]

Hello88 : Your situation is quite cheem. Didnt quite understand the part about "we area office to clear the loan". So when you bought your second flat you had to top up with cash? Or there was enough left in the CPF to pay the duties etc.

oops, dunno what happened as I checked before I click submit. Anyway, we had sufficient CPF monies to buy the 2nd resale flat so we bought it first before we sell our 1st resale flat. Didnt top up cash as got enough inside CPF and we also bought the flat at below valuation. After the 2nd flat housing loan was done then we got the monie from into our CPF after sale of 1st resale flat. We channeled it into investment. Would wait a couple of years more and with the investment then we would clear our loan at area office as we're mindful of the withdrawal limit ruling so cannot anyhow go area office to reduce the housing loan. Once we ready to clear it entirely then we'll go area office.

[vinzy 0]

I think I just found out a solution to my predicament ... I hope it works.

I never did mention that I didnt take a grant for my first flat. So based on the financial plan on HDB website, it would be included in my CPF when I buy a second resale. Can that be used as the initial 10% payment, stamp duties etc?

Use of CPF Housing Grant

The CPF Housing Grant can be used to pay towards the purchase of the resale flat or to reduce the mortgage loan. Hence, if you do not have enough CPF savings, the grant can be used to pay for the initial payment towards the purchase. The balance, if any, must be used to reduce the mortgage loan. However, the grant cannot be used to offset the cash payment where the declared resale price exceeds the market valuation.

If you are buying the resale flat with a bank loan, the CPF Housing Grant will be treated as part of your CPF fund. It can be used to pay for the CPF portion of the initial payment towards the purchase of the resale flat or to reduce the mortgage loan. It will be included in the computation of the CPF withdrawal limit.

It cannot be use for stamp duties, legal fees etc.

[hello88 2]

i took stay near parents grant for my 1st flat and the grants went into our cpf and thereafter hdb compute the initial deduction then compute the housing loan. 50% of the grant into my cpf a/c and 50% to my hubby's cpf a/c.

i sold my 1st flat at a 'lost' (paper lost) and even though i sold my flat at 1k above valuation....the cheque had to be submitted to the hdb officer on 1st appt. sob sob.....