In Singapore, buying an HDB flat, new or resale, requires less cash than compared to buying a private property (think condo). That cash outlay will be even lower if there is significant savings in one’s CPF.
According to Mr Salty’s own experience of buying a resale 4-room HDB flat, there were a total of 6 items he paid in cash: Issuing and Exercising of Option to Purchase (OTP), Legal Fees, Agent’s Commission, Fire Insurance, Processing Fee for Request for Value, Administrative Fee for Temporary Extension of Stay by Flat Sellers and Purchase of Floor Plan. The last 3 were exceptional items that do not apply to every buyer. Similarly, not everyone would need to top up their CPF OA if they do not have sufficient funds to make the down payment, or to pay “Cash Over Valuation”, but when they do occur, they will require payments in cash.
Overview of Items to Be Paid in Cash When Buying A HDB Resale Flat
The following is a list of items / activities that Mr Salty had to pay in cash, as a HDB resale flat buyer:
| Item | Amount | Payable To |
| Issuing and Exercising of Option to Purchase (OTP) | $5,000 | Seller |
| Legal Fees | $186.25 | HDB |
| Agent’s Commission | 1% of Agreed Price + GST | Real Estate Agent |
| Fire Insurance (Minimum plan for 4-room flat) | $5.86 | Vendor assigned by HDB |
The following is a list of optional or exceptional items / activities that Mr Salty had to pay in cash, as a HDB resale flat buyer:
| Item | Amount | Payable To |
| Processing Fee for Request for Value (If using CPF and/or Housing Loan) | $120 | HDB |
| Administrative Fee for Temporary Extension of Stay by Flat Sellers | $20 | HDB |
| Purchase of Floor Plan | $5 | Seller |
| Top up of CPF, if there is insufficient funds in Buyer’s CPF OA | 10% of Agreed Price minus amount in CPF OA (Exceptions apply) | HDB |
| “Cash over Valuation” | As directed by HDB after valuation is completed | Seller |
Cash Payments That Mr Salty “Cannot Run Away” From
Payment of $5,000 to Seller of HDB Resale Flat
Mr Salty paid $1,000 to the HDB resale flat Seller, on the day the Seller was to issue the Option to Purchase (OTP). The whole process (payment and issuance of OTP) will be done in the presence of the real estate agents (if engaged). Therefore, there is no “escaping” from paying this $1,000 and no seller will issue an OTP without receiving the $1,000.
Following the issuance of OTP, Mr Salty had 3 weeks to exercise the OTP (assuming the HDB valuation went smoothly). To exercise the OTP, he was to pay the Seller the remaining $4,000. Again, this is done with the agents as witnesses.
Mr Salty had previously written a post about the timelines and milestones like OTP in buying a HDB resale flat – and how to complete the transaction in 11 weeks. The post can be read by following this link: https://hellomrsalty.com/hdb-resale-flat-asap/
Payment of $186.25 to HDB for Legal Fees
On HDB’s website, they call it “Legal Fees” – with terms that Mr Salty did not fully understand. The amount he paid included Conveyancing Fees, Caveat Fees, Title Search Fees and Admin Fees. HDB said that the amount varies according to the size and value of the flat, and they have an online calculator for people to gauge the amount to be paid. The URL to the details and online calculator can be found below:
https://www.hdb.gov.sg/cs/infoweb/residential/buying-a-flat/resale/finance/costs-and-fees
Since Mr Salty bought a 4-room flat, the amount to be paid for buyers of EC and 5-room flat should be higher.
Paying the Agent Commision
There might be a chance for negotiation (perhaps the agent is your uncle or something), but the industry rate is 1% of agreed sale price. This commission is due when the sale is completed, a.k.a after the “HDB appointment”.
Paying $5.86 for Fire Insurance
The fire insurance is bought from an assigned vendor by HDB and the premium varies according to size of flat and size of coverage desired.
Mr Salty, being the ever stingy person, opted for the cheapest coverage for his 4-room flat. Therefore, those who bought bigger flats (EC or 5-room flat) or wanted more coverage, should expect to cough out more cash.
https://www.hdb.gov.sg/cs/infoweb/residential/living-in-an-hdb-flat/fire-insurance
Cash Payment That Are Optional or Exceptional
Processing Fee for Request for Value (If using CPF and/or Housing Loan)
The Request for Value by HDB (a.k.a Valuation) takes place after an OTP is issued and before an OTP is exercised, and is required if the Buyer intends to use CPF money and/or HDB Loan (i.e. almost everyone who is buying a HDB resale flat).
For that, HDB charges a flat fee of $120.
Administrative Fee for Temporary Extension of Stay by Flat Sellers
This is considered optional payment, since not every flat seller would request for temporary extension of stay (like: to wait for their new house to be ready). For Mr Salty, he had to pay for this after agreeing to let the seller stay on after the purchase was completed.
This is a flat fee of $20 charged by HDB.
Purchase A Floor Plan
Well, unless you are able to find a free one online (or perhaps from the Seller, or from relatives who live in the same flat type), it’s most likely that you will have to buy a floor plan at $5 from HDB.
The floor plan is to be used when deciding on renovation, and Interior Designers will request for it. HDB sends the floor plan in a soft copy, so this is usually a one-off purchase. Mr Salty loved the floor plan, as he was able to decide what to buy from IKEA to fill out his room. For example, he knew how huge his wall would be, so that he could know how much of the IKEA Fejka Artificial Wall Plant he had to buy (details of his purchase is found in this link: https://hellomrsalty.com/ikea-fejka-artificial-plant-wall/)
Or, he used it when he was planning for his kitchen, and when he was in discussion with the IKEA Singapore Kitchen Planner.
Topping up CPF
This scenario will only happen if there is insufficient funds in the Buyer’s CPF OA to pay for the down payment (10% if the Buyer’s using HDB Loan). However, since Mr Salty was 35 years old when he bought his HDB resale flat, he literally had 10 years to save up for his CPF. Similarly, he chose a 4-room HDB flat, which was within his means. Therefore, he had more than sufficient funds in his CPF to pay for his flat.
In fact, he was able to set aside extra money in his CPF OA for emergency use, while paying more than 10% of his flat!
Cash Over Valuation
Again, this is something that is so technical that Mr Salty himself don’t understand. And since he didn’t incur this, it is better that readers go over to this page to do some research, if they end up being caught in this situation: https://www.sgmoneymatters.com/hdb-cash-over-valuation-cov/
Basically, as Mr Salty mentioned in his previous post that touched on HDB valuation, hiring a real estate agent who is familiar with the prevailing prices would save one from getting into the sticky situation of having to pay in cash “Cash Over Valuation”.
Imagine having to fork out $10,000 in cash at the last moment!
That’s all for the cash that one should prepare when buying a HDB resale flat. Some of the mandatory payments – Mr Salty went through. There are some that were optional or only happens in exceptional cases, which Mr Salty only encountered 3. Do let Mr Salty know if he missed out any cash payment!
Hopefully, with this list, those of you who are about to embark on your HDB resale flat journey will be prepared. For those who are still some way to reaching 35 years old, use this as a guide to gauge how much cash you have to save up and prepare for!
Remember, salty is life!