Guru Answers: Money Not Enough can still buy EC?

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Question:

Hi, I have the intention to buy a EC that is going to TOP in Sep 2017. As I do not have sufficient cash + cpf for 20%, I am planning to sell my current HDB to finance the purchase. I hope to handover the HDB after getting the keys to the EC unit. Hence, I would like to ask the following: 1. When should I start to put up my HDB for sale? How long does it takes to usually sell a HDB unit in Jurong West, 5 room and very short walking distance to Jurong Point Shopping Centre? 2. After the HDB sale, how long does it takes for HDB to return the proceeds – i.e. credit back to cpf and return cash balance? 3. Usually by when do I need to pass the key to the buyer of the HDB? Does it have to be before the proceeds is credited to me? 4. When a EC project is completed before the actual TOP and start to handover the keys to the buyers, at this point of time if I purchase a unit, will I get the key immediately as well? Thank you.

Response:

Thanks to this person, who is asking a question which many of us have. Let me summarize the question, technically this buyer wishes to buy an Executive Condo, but does not have money for the down-payment (which is the 20%), which is required for booking the EC.

Selling your HDB flat to obtain the Sales Proceeds

1. If you have intention to sell your HDB flat, then you can do so immediately, as it would take some time to sell and get the sales proceeds. The entire HDB sales process takes about 4 months, before the sales proceeds will be paid to you. You will need to bank in the payment and only after the cheque is cleared then will the funds be in your bank account (for the cash portion), for the CPF part, it normally takes 2-3 weeks to be reflected in your account.

When do you need to pay the 20% for the Purchase of the new EC

This is important, because at the same time you are selling your HDB flat, you also need to source and secure the unit you wish to purchase. As there are Executive Condos that are nearing TOP, as well as developments that have obtained their TOP, you can apply and get your keys to the development faster than those units are under development. In some cases, we can appeal and submit a request to the developer for the option to make the 20% payment later, but this is not a confirmed or definite option – it is still subject to approval from the developer. As property agents, we will assist to facilitate the sale, so that you may purchase the EC unit of your choice.

When do you need to handover your existing HDB to the new owner

When you are selling your HDB, you can apply for a maximum of 3 months extension after the sale of your hdb flat. However, such extensions may also limit you to buyers who are not in a hurry to get the keys to the unit which they bought. So it is a double edged sword. It may also affect your selling price, as you require an extension of stay, you may have to be more flexible in pricing especially with buyers who are willing to allow extension stay.

In Normal cases, without extension, the keys to the HDB should be handed over at completion or what is commonly known as the 2nd Appointment at HDB – that is when the HDB buyer makes all the payments (through HDB) to you the HDB Seller. If no extension stay was applied at the beginning, a last minute request for extension of stay is not permitted based on HDB regulations.

When can you get the keys to your new EC

When the EC has received its Temporary Occupation Permit, the developer will inform you to come and collect the keys. Some developments have already received their TOP and still have units for sale. Please contact us for the latest update should be interested in Executive Condos

Can I go and rent a HDB flat while waiting for my EC?

You may rent a HDB flat from the open market until your Executive Condo is completed. The expected rental in the open market would be:

4 room flat – $2,000 to $2,300

5 room flat – $2,200 to $2,500

EA or EM – $2,400 to $3,000

The minimum rental period as permitted by HDB is 6 months, so if you need to rent for less than 6 months, you will still be required to sign a tenancy agreement for that period. You may choose to rent a condo, if you wish to, but most opt for HDB as the more economical choice, and proximity to amenities.

If you have additional clarifications, do contact me

Yian Tay Contact

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