By the time Mr Salty was allowed to buy a HDB resale flat as a non-married Singaporean, he was already 35 years old – many many years later than his peers. It was no wonder he couldn’t wait any longer when his 35th birthday came around. He did a deep research and found out that, with an army-like discipline, it is possible to own a HDB resale flat in 11 weeks!
The trick is to identify all the “hard dates” – waiting times that’s hard to influence or change – and work around them. Valuation, HDB approval and HDB appointment – which are all beyond the buyer/seller’s control – are major time-wasters. All these waiting times add up to 11 weeks, if we make sure we do not waste time in between these processes. How did Mr Salty manage to cram everything within 11 weeks then?
P.S: Read here to find out why Mr Salty chose to buy a HDB resale flat when he turned 35 years old.
But first, let’s have a big picture of the whole process.
Overview of the Timeline
Using the milestones provided on HDB’s official website on buying of resale flats (https://www.hdb.gov.sg/cs/infoweb/residential/buying-a-flat/resale/buying-process) as a guide, as well as from the consultation of Mr Salty’s real estate agent, the overview of the important stages and processes can be found in the timeline below.
Since the issuing of “Option to Purchase” (OTP) will kick off the whole purchasing process officially, it was set as the start time. The process ends when the HDB appointment – the day when both parties meet, under the presence of a HDB officer, to formalise the transaction – takes place.
We can see the HDB processes as beads on a string – hard and cannot be compressed without breaking them. The space between the beads are the time that we can control: the more string we leave in between the beads, the longer the whole string of beads will be.
Inflexible Waiting Times
As we can see from the timeline, there are a few periods of waiting times – the beads. Those are the periods when we have to wait for HDB to process the documentation and give the approval, before we can advance to the next stage.
The 2 weeks between submission of Resale Application to having HDB approve the sale is one such period. However, both buyers and sellers will be busy searching for, submitting and endorsing documents, so the 2 weeks fly by.
The most grueling wait will be the 7 weeks waiting for HDB’s appointment. There is literally nothing one can do except to wait and wait!
Mr Salty can complain as much as he wants, but unless he breaks into HDB and threaten a HDB officer with a gun to expedite his application, there is little he can do to shorten these 11 weeks.
That being said, hope is not lost!
The Flexible Times – Tightening the Excess String
There are some flexible times that we can play around with. For example, the 3 weeks (21 calendar days) between issuing of Option to Purchase (OTP) is something that can potentially be reduced. The 3 weeks is actually a period for the buyer to “cool down” and think through (and spy on the seller conduct deeper research on the property he intends to buy) if he wants to go through with the purchase. If Mr Salty is dead sure he wants the flat, he can always exercise the OTP before the 21-day deadline.
The only catch is that the decision can only be done after the Valuation is completed by HDB.
Valuation Before Exercising OTP
After the OTP is issued by the seller, if a buyer wants to use CPF money and/or HDB loan to purchase the flat, he has to submit a Request for Value (source: https://www.hdb.gov.sg/cs/infoweb/residential/buying-a-flat/resale/option-to-purchase). HDB will conduct a valuation and advise if the transaction can take place at the agreed price. Interestingly, the 1 – 2 weeks taken to value the flat becomes an inflexible waiting time during a period of flexible waiting time (OK, we digressed).
This brings us to the next infograph, which shows the periods in which we have full control of – which can potentially be reduced to 0 days if we don’t procrastinate.
Reduce Lag Time After Exercising OTP
Those periods marked by the arrows are the ones that can potentially be reduced. The red arrow refers to the period which can be squeezed to 0 days, if we take start the next step immediately (or perhaps on the next day) after the previous one is completed.
For example, through good communication with the real estate agent (or Mr Salty can grill the agent like how an encik tekan a recruit), the Resale Application can be submitted (Note: both parties must submit the application) immediately after the OTP is signed and the deposit paid.
Don’t Take Chance With The Negotiated Price
The blue arrows indicate the periods which we can shorten, though not possible to reduce to 0 days. The tricky part is, they can also potentially lengthen the whole process.
The first possibility is when the Valuation given by HDB is different from the agreed price and the buyer and seller has to re-negotiate the price. This can be mitigated if the agents did their homework diligently to make sure the agreed price do not deviate too much from the Valuation (to their benefit, they won’t know the actual Valuation, but an experienced and hardworking agent will be able to deduce that with high accuracy). Similarly, if re-negotiation has to take place, the agents have to be skillful enough to avoid a drawn out negotiation, which can cause the OTP to be lapsed. If the OTP is lapsed, the whole process of Issuing OTP-Valuation-Exercise OTP has to be repeated.
Side Note: A lot of people wonder why we should pay for a real estate agent to “do something we can do ourselves”. The above scenario is one such example where a real estate agent becomes “useful”. Yes, it is possible for a layman like us to do our own research, but the chances of success and accuracy in is low when we are not familiar with the industry. Similarly, having a 3rd party acting on our behalf during negotiations allow us to distance ourselves from the heat of discussion and make a more objective and rational decision. Most important of all, if Mr Salty wants to make sure the whole process of buying a HDB resale flat is as short as possible, then engaging a real estate agent will help in this objective.
Endorse Documents Speedily During HDB Resale Application
The other blue arrow happens within the period of waiting for HDB to approve the sale, triggered by the stage when all parties are to endorse the documents.
Technically, HDB can only continue with the processing of the sale after the documents are endorsed by both parties. However, if any party takes his own sweet time to do that, it will become an issue.
For Mr Salty as a buyer, his constraint arose from the fact that he was claiming Proximity Housing Grant. To make sure he is eligible for the grant, HDB wanted his mother to go into the HDB Resale Portal to acknowledge that they are related and confirm the location of the flat she currently owns. He was so afraid that she would take her time or get “stuck” since she was not internet-savvy. Luckily, his sister was there to help her with the process and the whole acknowledgement part was completed in a day.
The above scenario is one of the possibilities of how the endorsement of documents can potentially take a wrong turn and extend the already long waiting time of 2 weeks. Therefore, we should foresee such incidents and be prepared for it, so that the 2 weeks will not end up as 3 or 4 weeks!
What Other Things Can We Control?
Set Clear Objectives During House Hunting
Arguably, the 11 weeks listed in the timeline did not include house-searching. Viewing houses is important and can indeed prolong the whole process. However, does it necessarily mean we should take our own sweet time when viewing houses?
For Mr Salty, he was very clear in what he wanted – 4-room flat within 4km from his mother’s house. (For an idea of how he narrowed down his choices, you can read his previous post: https://hellomrsalty.com/top-3-reasons-to-buy-a-hdb-flat-as-a-single-singaporean-at-35/).
He first started his search in Pasir Ris, as he wanted to be near his workplace too. However, the part within the 4km radius was the older part of Pasir Ris, and he didn’t like the neighbourhood nor the design of the flat (well, the rubbish chute was in the flat, which was an outright no for Mr Salty!). So he shifted the search to Seng Kang.
Due to budget constraints, his options narrowed down a lot more in Seng Kang. In fact, he found a flat that he wanted to buy before he turned 35 years old. But by the time his birthday came, the house was sold, and he had to continue with his search.
However, with his previous selection, his agent knew better what he was looking for and their subsequent search brought them to his current house within a week.
Therefore, house hunting need not be long. Some people are afraid that they would “miss out on better houses” and refuse to make a choice. Some people just did not set their needs clearly from the start. (Perhaps Mr Salty should write a post on how to prepare for buying a HDB resale flat?) However, with clear objectives, we will never be afraid of missing out on “better” flats – missing out on better flats just means the objectives were not set properly in the first place.
Settle Intent to Buy and HDB Loan Eligibility on 35th Birthday (Without Delay)
Before we can even ask the seller to issue OTP, the buyer must register his Intent to Buy. This is a personal “problem” for Mr Salty: Buyers who are single can only register for the Intent to Buy after their 35th birthday. This explained why he was not able to purchase the first flat that he liked.
After he registered my Intent to Buy, he waited for his HDB Loan Eligibility Letter (which he will receive when he is “approved” to purchase a flat using a loan from HDB).
For Mr Salty, he received his HDB Loan Eligibility approval 10 days after application (which he did immediately after registering for Intent to Buy – real impatient, right?). The reason why this step was not included it in the deadline was because it does not apply to everybody – only for people who intend to get a HDB loan (https://www.hdb.gov.sg/cs/infoweb/residential/buying-a-flat/resale/procedures/register-intent-to-buy ).
On a brighter note, there is no rule that said the OTP cannot be issued immediately after the HDB Loan Eligibility is approved by HDB. Mr Salty’s agent had already communicated with the buyer beforehand and they arranged to meet up with the seller immediately after the HDB Loan Eligibility was approved, to start the OTP process.
Again, good communication is key in order not to waste time on areas that we can save time on!
Potential Showstoppers
Skeptical people will think that he made a hasty decision – admittedly, there were times when the buyer’s remorse set in (he should also write a post about this!).
Knew Enough to Make A Decision?
However, hindsight is 20/20. When he considered the situation back then, he had made the decision based on all the information he could obtain. Well, how is he supposed to know the neighbour’s daughter would go into a crazy fit once a month, if she didn’t act up during the times he viewed the house or visited the unit in stealth?
Making sure that all information was obtained to the best of ability is something we can do, and something we should let go after completing the purchase. Even spending $3 million on a condo does not guarantee one is free from crazy neighbours.
Prepare Cash for Payment
Similarly, having sufficient cash at hand to make payment to the buyer and HDB is important, especially if we are like Mr Salty, who puts most of his cash in stocks.
He particularly grilled his agent once and again to confirm the timing he had to make cash payments and the amount to be paid. The payment details were clarified way beforehand so that he had sufficient time to sell his stocks at a price he was satisfied with.
Extension by Seller
Another factor, which is getting more common these days, is when the seller asks for an extension. They usually ask for one, when their new house may not be ready by the HDB appointment date.
However, this just means we can’t move into (or start renovating) the house after taking over the keys – we are still the owner of the house after signing the documents at HDB! Nonetheless, if this is your goal – to move into the newly purchased flat right after the HDB appointment – then you have to make sure the seller has no such intent to ask for an extension.
Holiday Period = Relax and Chill for HDB?
Lastly, Mr Salty’s purchase was made over the Christmas / New Year / Chinese New Year period. Many a times, he wondered if his purchase would take a shorter time during non-festive periods? No one can tell for sure (there’s no credible way of knowing unless we hear it from the horse’s mouth by putting a gun at an HDB officer’s head, but Mr Salty has no guts to do it), but all the processes did not exceed the “hard dates” we mentioned. In fact, Mr Salty received the Valuation (just 2 weeks before Christmas) quicker than usual, which his agent also found peculiar!
Conclusion
Did Mr Salty get his HDB in 11 weeks as his research showed him? As we mentioned earlier, hindsight is 20/20. If only Mr Salty knew what we know now, he would have cut short the unnecessary waiting times like the time he used to exercise his OTP, submitting HDB resale application or endorsing document.
In case you are wondering, Mr Salty got his flat in about 14 weeks, from early December to mid-March. He was so salty about not being able to get it within 11 weeks, that he decided to write a post to tell others how to make it. Hopefully, this post is can help you get your flat as close to 11 weeks as possible!
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While hunting for flats, the other thing that you should keep in mind is your CPF. How much do you have in your OA? How much should you use to pay for the down payment of your flat? If you are still undecided on how to utilise your CPF, you can read Mr Salty’s other post on “You Don’t Have to Use Up Your CPF to Buy Your HDB Flat!”. Or for those who have already bought your resale HDB flat, check out my post on my experience using IKEA Kitchen Planner, or my decoration ideas for IKEA’s Fejka artificial wall plant.
Remember, salty is life!