The Housing Development Board (HDB) is overhauling the procedure for resale HDB transactions in a bid to shift the focus from cash-over-valuation (COV) to market prices when negotiating resale prices.
It is requiring buyers to first obtain the option to purchase (OTP) before asking for a valuation through HDB, and it will not accept valuation requests from sellers.
This pushes buyers and sellers into negotiating resale prices based on the latest transacted prices, instead of haggling over the COV as is done now.
Sellers or their sales agents had been typically requesting HDB valuations and then negotiating resale prices with prospective buyers of their flats based on COV, which is the cash premium that buyers would pay in excess of the valuation.
With the change, buyers who are granted the OTP will have 21 calendar days, up from 14, to exercise the OTP.
At the same time, HDB will start posting daily prices of resale transactions on HDB InfoWEB as soon as they are registered, instead of fortnightly.
Changing the resale procedure will bring the practice in the HDB resale market in line with the private housing market.
Property consultants noted that the present low COVs provide a good opportunity for the new resale process to be introduced without major protests from sellers.