Sunday, April 8, 2018

HDB Flat Purchase Chronicles - Our Househunting Story

This article is part of a series that shares my journey to becoming a homeowner for the first time. Eventually there will be more article(s) that not only covers the actual cost, but also the process of purchasing resale flat using the HDB Resale Portal.

As of now, my wife and I are still getting some documents for the Resale Application sorted out and if everything goes smoothly, we'll finally become homemakers by the start of June! :)

Previously, I talked about our expected expenses and financing of our upcoming HDB Flat Purchase here.

How it began
Having stayed in a 4 room flat my entire life, and her entire time ever since she came to Singapore, the living space such flats offer is immediately appealing to us and so I leaned towards getting a 4 room flat within walking distance to my parents' place.

Knowing our financial situation, my dad advocated looking at a 3 room flat as our first home to ease the burden, and then go for a BTO when the opportunity arises instead.

The idea to get a 4-room flat was then quickly shelved when we realised:

  • I could only get up to a loan of $224,800 for a 25-year loan from HDB. 
  • 4 room flats in the area generally costs upwards of $330,000
  • My CPF-OA balance, together with any grants we qualify for and any cash in hand, will not be able to cover this
Reluctantly, we adjusted our expectations and scouted for a 3 room flat in the vicinity instead.

The hunt for a 3 room flat
Thus we began our house-hunting for a 3 room flat with the following criterias subject to circumtances:

  • As near to my parents and the MRT Station as possible
  • Ease of accessibilities to amenities
  • Budget of not more than $275,000 before renovation, furnitures and electrical appliances.
  • Minor to moderate renovations only

Bearing in mind the different implications there is when purchasing a HDB flat, I also decided to purchase Singtel with my CPFIS Account so as to be able to retain a balance in my OA account should the need arises.

However, with most of the 3 room flats we checked out, either the flat simply did not steal our hearts or it's out of our budget or timeline.

The unit that grabbed our attention is a bank sale unit going for $295,000 asking price. Based on the agent's experience, he expect a potential negotiation of price to have a discount between 2 - 5%. We were planning on offering a starting price of $250,000 before we adjust our price upwards with each negotiation.

It also just so happens the estates in this area is undergoing Home Improvement Plan (HIP) for the toilets. As the owner was evicted some time back, this unit then had not opt-in to HIP. As opposed to HDB Renovation, getting the toilet renovated on our own would cost many times more!

With the complexity surrounding this unit, this unit was KIV.

That was when the unexpected happened - 4 room flat(s) started to be within our reach.

And then 4 room flats
Another agent whom we were liaising with to view a 3 room flat in another estate area then asked if we were interested in a well-cared 4 room that is being advertised for $308,000.

It also just so happens the Proximity Grant was enhanced, adjusting the eligibility distance from 2km within the same town to just simply 4km radius (link here). By going for such We would then have to trade our goal of being close walking distance to my parents' place.

We re-considered our criteria. Being a mature estate, the resales in close walking distance are flats that has remaining lease of 67-69 years. In consideration to the age of the flats, we may face difficulty selling off the flat when we change over to a BTO. The valuation will take a hit. In contrast, this unit and flats in the area have about 80 years left!

After we did some math and looking at the unit online, it swayed our hearts. Getting a 4 room flat may be possible after all!

We were told the owner was overseas and we would have to wait till he's back in a week. Sadly, shortly after, it was already sold by another agent working with the seller. "Overseas".

What to do? Life is like that. Bo bian.

Shortly after, another flat located at a block a couple minutes away from the earlier 4 room we wanted to gun for. Seeing the preview photos and the price, away we went to make an appointment.

On viewing the flat, however, its condition and layout was not to our desire. Even with renovation taken care, nothing would solve the issue we had for the shape of one of the room. We then shrugged and went to have breakfast.

The one
During breakfast, another unit advertisement then caught my wife's eyes. This is a corner unit in the same block with asking price of $340,000. There was doubts with the affordability, but we decided to check it out anyway (for the heck of it) and then arranged for the viewing with the agent a couple of hours later on the same day.

Lo and behold, everything seems to fall in place with that very unit. While the corridor unit in this block had an odd shaped room, the corner unit was pleasing to the eye and a little larger.

Moreover, the condition of the unit was largely near-mint condition save for some hardware - only minor renovation will be needed. The unit was pretty much turnkey.

There was one caveat though - the asking price.

The seller was willing to let go at only valuation price - an offer of $330,000 was rejected earlier on. Yet the asking price is so seemingly out of our reach...

Such a flat is going to be hard to come by anymore. There must be something to make this all work out!

It was then I realised I still had a trump card up on my sleeves.

The "Ultimate Sacrifice"
In our bid to hunt for a 3 room, I completely forgotten about the trump card. The one thing that makes all the difference between making this a deal and a no-deal.

My stock investments! If I liquidate enough of it and consider the additional expenses, we can do this!

With the realisation we can actually afford the unit now, we then offered $335,000 - our all-in price. We rolled in our renovation funds considering the condition of the unit.

With us going all-in for this unit, everything was laid on the table. Will it go through? Is this unit meant to be ours? We were restless as the agent tried to reach the sellers regarding our offer.

How did it turn out? Well, you know... :)

Having said that, until we get the keys to our new home, this is not complete yet.

A couple of tidbits I learnt
  • Proximity grant under Non-citizen spouse scheme (NCSS) falls under Singles Scheme as well - we could only get $10,000 instead of $20,000. I learnt this the hard way doing the Resale application and had to liquidate my Singtel in my CPF Investment account. Folks, this is one reason why you do your due diligence on everything you do.
  • Corner units command a premium in comparison to corridor units, and usually so does which floor the unit is based at.
 Stay tuned for the next part of HDB chronicles!

Have your own house-hunting story to share with everyone? Feel free to comment or write in to me to share it on Marksman's Investment Corner!


  1. wow, your journey is very similar to mine. have been reading your past posts on resale unit.
    my situation is abit different , as i am getting under single. so i really got no one to discuss, other than myself..
    obviously with a single budget, 5BR are out of the question.
    so my choices are 3BR or 4BR. my prelinary loan is only 300k, so financially, 3BR is a sound choice, though my heart is telling me to go for 4BR, coz i can rent out the spare room, if req for extra cash.
    i did view a few 4BR. and set my mind on one of them. the condition is terible, so it will have to be complete hack and redo. which act suits me fine, as i can start from a clean slate. and it is also a corner unit, which means, i can buy the excess area outside. it is very tempting. but the whole price itself, is easily another 50~80K on top of the purchase price...
    there are not much 3BR in my area, so far only view one.. and it was a corridor unit, so not very keen.

    1. Hi foolish chameleon,

      I guess it's dependent on what your plan is after getting your resale unit. If you are staying in a room, and renting out any other extra room(s), passive income from rental of a 4BR will potentially net you about double that of a 3BR. Is that worth the extra you are paying

      Among the other considerations you may want to have in mind is:
      - How much lease is left for the unit
      - The price of the resale unit vs its condition

      You may want to continue viewing more 4-room units before making a decision. Who knows, maybe you'll end up finding a corner unit that is affordable enough and good enough condition to treat it as already having a 20-30K renovation done, but without the time spent to arrange for it.

      Wish you good luck for your continued home-hunting!

  2. on the topic of grants. i can get the near parents grant. however, (correct me of i am wrong ) i am not keen to get it, as it means, i will need to pay a resale levy? if after a few years, i decide to get a BTO?
    this means, i have used up one type of HDB grant.

    1. Hi foolish chameleon,

      From looking at the HDB website (, if grants does count as subsidisation, then yes, there will be a resale levy for when you purchase a BTO as a resale flat owner.

      It really depends on if the cons for getting the grant is worth it on your end. Haha.