Option to Purchase for HDB Resale Flat

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Option to Purchase forHDB Resale Flat
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Purchasing HDB property for sale is not an easy
and fast process. It is the reason why people who
wanted to own one, must exert their time and
effort to complete the process.
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Aside from buying Singapore HDB for sale that is
brand new, many Singaporeans also prefer HDB
resale flats.
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It is because the resale price HDB is obviously
lower than buying a new flat.
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However, even if you prefer the new or resales
HDB, there are still procedures that need to be
followed like submitting important documents. One
of the differences between the documents needed
for purchasing new and resale is the Option to
Purchase (OTP) form, which is prescribed by the
Housing Development Board.
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It serves as form of contract between the seller
and buyer of the flat. Below will be your guide
in entering a contract using the prescribed OTP
form.
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Negotiation
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After finding the resale flat that you wanted to
purchase, now is the time to negotiate about the
resale price. Make sure that you and the seller
or an agent agreed upon the selling price. You
can check the transacted resale flat prices for
the past years to help you in deciding if the
price that the seller wants you to pay is in line
or close to the prices of other HDB flats. The
transacted prices are based on the resale
applications submitted to HDB. One you and seller
agreed about the price, it must be declared in
the OTP as well as other relevant information
during the transaction. Do not forget that you
and the sell must not enter to supplementary or
other types of agreement, and arrangements that
might affect the declared price.
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Granting of OTP
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After negotiating and agreeing about the resale
price, an OTP form will be granted to you by the
seller. The said form must be filled by you and
seller on pages 1 and 8. For page 1, the sections
that must be filled include the option date,
purchase price, flat address, names and NRIC
numbers of both seller and buyer, and the option
fee that ranges from 1SGD to 1000SGD, which
depends on how much the seller, will require you
to pay. Another field is the option expiry date
that must be within 21 calendar days from the
option date stated. For page 8, the fields
required to be filled include the option date,
and the flat address. The signature of the seller
and witness must also sign on the OTP. Do not
sign at this point because you need to pay for
the option fee so the OTP will be granted to you.
The OTP will be your guarantee that the resale
flat cannot be sold to other buyers until the OTP
granted to you expires.
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Option Period
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The option period will last long for 21 calendar
days, which can help you in reviewing the
purchase. Keep in mind that even though the OTP
was granted to you, it is not necessarily for you
to purchase. You can still make a decision
whether to buy it or not. Some of the things you
can do during the option period is to study your
financial capacity to buy the flat, and carefully
think and decide if you really wanted to buy it.
A valuation report of the flat is needed if you
want to finance the purchase using a housing loan
from HDB or bank, or if you will finance it using
CPF monies. If you decided not to purchase the
flat, the option fee that you already paid cannot
be refunded.