Sell Hdb Buy Condo - A Comprehensive Guide and Case Study
Hope everyone is coping well during this Convid period!
I have had the fortune of keeping busy during this period – with an interesting trend of clients reaching out to discuss their plans to upgrade from their HDB to Condo.
It seems like many HDBs are reaching their Minimum Occupation Period (MOP) this year.
Does this apply to you too?
So, I thought, instead of limiting my sharing to my clients, why not share it here on the blog with you guys too?
To make this both an interesting and helpful read, I will be sharing important factors to take note of , and a personal case study of one of my clients who is in their midst of their upgrading journey from HDB to Condo.
Is it worth to Upgrade to Condo?
DOWN-PAYMENT without savings
Purchase Private Condominium without touching your savings.
Mortgage Installments without CASH
Pay monthly mortgage loan installments WITHOUT paying any extra cash from your own pocket.
Table of Contents
Are you eligible?
If you already own an existing HDB property, you will only be allowed to sell your current flat if you have completed the MOP duration on your current property.
This is HDB’s rule, so do make sure to check this out first before you happily plan your upgrading.
Most BTOs and DBSS have an MOP of 5 years. But the exact MOP for different types of flats bought under different schemes can be different. If you are not certain, please head over to the HDB site to check the exact details here.
A New Home or Investment?
This is an important question to ask yourself – one that I always check with my clients when they tell me they plan to upgrade from HDB to Condo.
Why? Buying a house as your personal home versus an asset for investment requires us to evaluate different aspects when proposing solutions for you.
Do you have school, work or family reasons that motivate you to uproot to a more convenient location?
Are you planning to upsize or downsize because of family planning?
Or you realized that your property has reached peak value and you want to cash out and explore other options that could appreciate further?
As you see, there are a million and one reasons for any client, and yourself when planning to upgrade from HDB to Condo.
And based on their specific reasons, there can be many possible solutions.
So do make sure you are upfront about your needs!
Affordability check for buying a Condo
It is important to work out the details of your potential sale and cash proceeds to know if you can afford the new Condo.
Figure out if you require any cash top up for your next purchase or if you can utilize CPF.
If everything is in place, you can decide if you would like to buy first or sell first.
This impacts your finances significantly as well.
If you are buying first, it would be considered a second property and you would be subject to “Second Housing Loan” terms for your Loan-to Value (LTV)) and cash down payment.
So do make sure you plan ahead, to prevent being saddled with these additional costs just because you buy first.
And last but not least, a simple thing to note is that your current flat is being financed on a HDB loan, you will need to switch to a bank loan.
So start looking out for good rates from the banks too.
Accommodation plans during transition
This is one operational aspect of the upgrading journey that people tend to overlook in their excitement.
To avoid being stranded, always make sure to check if you have a place to stay during the transition or if you require any HDB extension.
The typical timeline after concluding a deal with an interested buyer for HDB resale is usually 8-10 weeks after the HDB resale application is submitted on both ends.
Case Study: Helping Mr. L Upgrade from 4-Room HDB to a Condo
So, using all the carefully considered factors above, I would like to briefly share how I helped a client of mine, Mr. L to upgrade from his MOP flat, to a new launch Condo in 2020.
One month before his 4-room Punggol flat reached MOP, Mr. L contacted me to find out more about his options.
Have verified that he is eligible and understood his reasons and goals for his upgrading journey. They were:
- Want an investment property with potential appreciation.
- Prefer low-risk investment approach
- Fancy a better lifestyle for his family
Hdb Upgrade to condo review
Mr L’s review:
“It was a pleasure working with Rick throughout my selling and upgrading journey.
His recommendations and knowledge of financial calculations and preparations are impressive – even factoring in risk management specific to us, for the next 5 to 8 years.
He has shown his expertise in real estate and guided us step by step all the way, making transactions effortless for us.
Well done Rick!
Using My Dynamic Property Upgrading Concept, we went through the 3 stages of discussion
- Personally run through in-depth financial assessment with the sellers
- Shared the current property market and analysis with the sellers
- Discussed in details on THEIR situation, lifestyle preferences and property requirements
- Recommended personalized opportunities for THEM
- Proposed CPF utilization plan specially for THEM
- Did an Evaluation of Risk assessment for them
- Customized a strategic timeline plan to guide THEM through key milestones
- Shared Effective multi-platform marketing to get the best deal for THEIR property
- Tailored property wealth progression road-map for THEIR comfortable retirement
Questions to ask yourself
Will you be willing to explore the options if you are suitable to sell hdb and upgrade to a private property with minimum risk?
Are you familiar with the latest marketing trends?
Have you work out the pros and cons of buying or selling first?
Do you have a step by step action plan?
Do you know that most owners who do not take action early, found that it is tougher to do so at a later stage?
Are You Ready To Explore Upgrading to Condo?
Having considered the various factors, does it sound like the right opportunity for you?
Bonus for my readers
I have successfully helped hundreds of homeowners just like you since 2010
Rick Huang, Associate Deputy Group Director of OrangeTee & Tie, has been in the Real Estate industry for a decade.
He is driven, committed and is enthusiastic about real estate investments.
Today, he leads Team Youhome.sg, and together, he aims to provide his clients with the best experience in their property journey.
The team focuses on understanding the client’s finances and needs and is determined about delivering the best solutions and results for them.
Amidst the hustle and bustle, Rick enjoys quiet time and indulge himself in the intricate art of tea-brewing and teapot appreciation.
He would also take this chance to energize himself and reflect on his personal development and areas of improvement.
He is also a proud fur daddy to 2 rescue kitties and loves spending his free time with his wife and furbabies.
Ever wonder if you are suitable for Sell one buy two investment concept? – Read more (Sell one buy two)
Is buying new launch or resale condo have better returns? – Read more (New Launch vs Resale condo)
Looking to upgrade from Hdb to condo? – Read more (Sell Hdb buy condo)
What to take note when selling Hdb resale flat? – Read more (Hdb Resale Process)
Buying another Hdb flat, and using the fund from current home? – Read more (Hdb contra)
Why do some Hdb flat price depreciate so much? – Read more (Hdb depreciation curve)
What is one of the most common reason for property negative sales? – Read more (Cpf accrued interest)
Financial calculation for selling a Hdb flat? – Read more (Hdb resale calculator)
Buying EC before selling your HDB? – Read more (Upgrade to EC before selling your HDB)
Should you sell your EC after 5 years? – Read more (Selling EC)