after visiting 3 HDB in Punggol, you decided "yes! I LOVE THIS HDB, near Punggol Primary School, and the price is right!"
(SELLER'S AGENT CANNOT CHARGE YOU FOR COMMISSION!) YOU PAY $0 COMMISSION
Seller's agent must help you close the deal and assist you on information such as
Who are registered owners of the HDB? (both husband and wife)
Tenure left, (new HDB come with 99years) and it start to decrease every year)
The amount you can loan (your current income, and the HDB grants)
you must have Down-payment ready, it is a must-have to apply for HDB loan
in order to make the OTP binding (seller cannot sell to any other person)
(seller's agent cannot grant another interested buyer OTP) (they'll need pay termination fee if they grants other buyer)
you'll need to put $1 down-payment to make contract binding
however, it can only be up to $1000 maximum (regulated by HDB) (the person who terminate contract must pay the other party "troublesome" fee)
good to read CPF GRANTS ELIGIBILITY
OR CPF GRANTS FORM http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyResaleFlatForms?OpenDocument
There are four essential steps to enter into a contract using the OTP.
|Steps||Explanation and Points to Note|
Negotiating the resale price with sellers
✔ Resale price negotiation should be based on the resale price of the flat as a whole. You can make use of the Resale Flat Prices e-service to check the resale transacted prices for the past two years to assist you in making an informed decision on how much to pay for the flat. From 10 March 2014, the resale transacted prices of HDB flats will be updated daily on the HDB InfoWEB based on HDB's registration of the resale applications received.
✔ Buyers should exercise financial prudence and work out the cash amount required, CPF savings available, monthly loan installment etc. before making the flat purchase.
Granting of Option by sellers to buyers
✔ If any of the buyer's spouse is listed as an occupier of the flat that the buyers are buying, he/she will need to sign the Acknowledgement by Spouse in the presence of our Customer Relations Manager (Resale) during the first appointment.
✔ Buyers need not sign any part of the OTP at this stage.
✔ It is a requirement to declare to HDB the true resale price of the flat.
✔ You will also need to declare all relevant information relating to the resale transaction in the Salesperson Statutory Declaration.
(a) The penalty for false declaration includes a fine and/or up to 3 years imprisonment.
(b) The penalty for false information includes a fine of up to $5,000 and/or up to 6 months imprisonment.
Reviewing purchase during the Option Period
The Option period is 21 calendar days (including Saturday, Sunday and public holidays) from the date the OTP was granted. The OTP expires at 4pm on the Option Expiry Date.
✔ You can use this Option Period to confirm your clients’ eligibility and mode of financing.
✔ If they plan to obtain a housing loan, ensure that they have either the HLE letter (for HDB loan) or Letter of Offer (for bank loan)
✔ Do inform your clients that they have this Option Period to reconsider their purchase.
Do not rush your clients into exercising the Option. They are making an important purchase which requires a long-term financial commitment and should be given time to consider their decision carefully.
(a) The buyers need a valuation of the flat if they are taking an HDB or bank loan or using their CPF funds to buy the flat or service their loan installments.
(b) The valuation request must be submitted by the next working day after the buyers have been granted an Option by the sellers.
(c) At the point of making the Valuation Request, the buyer of the flat must be eligible to buy an HDB resale flat under HDB's prevailing policies and eligibility schemes. If the buyer is not eligible, HDB will cancel the Valuation Request and not provide the valuation report. In such an instance, the buyer will forfiet the Valuation and Administrative Fee paid.
(d) Once the request has been submitted, the sellers have to allow the appointed valuer from the HDB's Panel of Valuers to inspect the flat within four working days.
(e) Salesperson should not in any way try to influence the valuation of the flat.
More on the Valuation Process.
Letting the Option expire
If your clients are not keen to proceed with the purchase, they can let the
Option expire. In this instance, sellers will keep the Option Fee that had been
Exercising the Option
If your clients wish to proceed with the purchase, they will have to exercise the Option within the Option Period.
Exercising the Option requires them to:
✔ As the salesperson, you will be the witness in the OTP for your clients.
✔ Make a copy of the signed OTP for your clients as reference before returning the OTP to the sellers.
✔ Buyers and sellers should discuss when they want to submit the resale application and fill up Clause 12 of the OTP. You should also highlight to your clients that the eligibility of both buyers and sellers is assessed when the resale application is submitted.
✔ Share the Terms and Conditions of Resale with your clients
Upon exercising the Option, sellers and buyers have entered into a binding contract for sale & purchase of the flat.
- No amendments to OTP clauses are allowed
- Buyers and sellers are not allowed to have supplemental agreements
- Sellers must meet the Minimum Occupation Period (MOP) before granting the OTP to buyers
- Buyers must have HDB’s Loan Eligibility Letter or a Bank’s Letter of Offer before exercising the OTP
- Buyers & sellers should be aware of liabilities (if any) to pay the flat/estate upgrading cost (Clause 11)
- The English version of the OTP should be signed
- It is advisable to prepare the Inventory List (Page 9 of OTP)
You can also download a copy of the Important Notes for your clients’ reference
The OTP can be downloaded from our HDB InfoWEB. The downloaded OTP should contain the following features:
- HDB Logo on the first page of the Important Notes
- HDB watermark (3 sets per page)
- Serial number at the bottom of each page, starting from page 1 of OTP
- Date and Time the OTP was printed
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