Payments In A Resale Transaction.

[Jgal 0]

hi

Just to check my understanding on payment of hdb resale flats. Is this correct?

Resale price : $770k

Valuation : $670k

COV : 100k

Owe HDB :250k

Owe CPF : 100k

Assuming buyer get 80% bank loan : 670 x 80% = 536 k

at OTP : Buyer pays $1k to seller

at exercise Option : Buyer pays $4k to seller

On 1st appointment : (seller gets $72k + 5k cash/cashier's order)

Buyer pays $770 x 0.10 = 77k - 5k = 72k ? in cash

2nd appointment : (seller gets $343k cash/cashier's order)

Buyer pays using CPF/bank: 536k to seller/CPF/HDB

Buyer pays balance : 770 - 77 - 536 = 157k to seller.

Bank pays seller : 536 - 100 - 250k = 186k in cashier's order to seller

Banks pays cpf : 100k.. into seller acct in 14 days.

14 days after 2nd appointment, Seller gets 100k in cpf.

Also want to check if buyer after 1st appointment, realize cannot get bank loan / cannot cough out $157k cash to seller.

What happens then? can the deal be call off..

does the seller need to pay back the buyer what has been paid?

Shld seller engage a lawyer to settle everything in the beginning in the first place ? cos' alot of cash involved.

Edited August 13, 2010 by Jgal

[therat 18]

buyer need to sign LO from bank loan before exercise the OTP.

[chronograph 0]

hi

Just to check my understanding on payment of hdb resale flats. Is this correct?

Resale price : $770k

Valuation : $670k

COV : 100k

Owe HDB :250k

Owe CPF : 100k

Assuming buyer get 80% bank loan : 670 x 80% = 536 k

at OTP : Buyer pays $1k to seller

at exercise Option : Buyer pays $4k to seller

On 1st appointment : (seller gets $72k + 5k cash/cashier's order)

Buyer pays $770 x 0.10 = 77k - 5k = 72k ? in cash

Just sharing my experience, on 1st appointment, no cash transaction yet. Just signning of some document, exactly what i don't remember.

2nd appointment : (seller gets $343k cash/cashier's order)

Buyer pays using CPF/bank: 536k to seller/CPF/HDB

Buyer pays balance : 770 - 77 - 536 = 157k to seller.

Bank pays seller : 536 - 100 - 250k = 186k in cashier's order to seller

Banks pays cpf : 100k.. into seller acct in 14 days.

14 days after 2nd appointment, Seller gets 100k in cpf.

2nd appointment, seller will have 770k - 250k - 100k - 5k = 415k cashier's order.

100k will goes back to seller CPF in 14 days.

As for buyer,

1) Bank will pay 536k to HDB, 80% loan.

2) Buyer will need to pay in cash COV 95k(- 5k for OTP) + 33.5k(5% of 670k, since it is bank loan), total = 128.5k

3) The balance of 100.5k will be deducted from buyer's CPF OA. If not enough will have to make up with cash.

4) Buyer also need to prepare stamp fee in cash up front first before reimburse through CPF OA.

Also want to check if buyer after 1st appointment, realize cannot get bank loan / cannot cough out $157k cash to seller.

What happens then? can the deal be call off..

does the seller need to pay back the buyer what has been paid?

Shld seller engage a lawyer to settle everything in the beginning in the first place ? cos' alot of cash involved.

Buyer if taking HDB loan should apply for HLE first before OTP. If bank loan, buyer needs to obtain bank letter of offer before OTP submission to HDB.

The actual cash mandatory part is 128.5k and 5k OTP or more if 3) is true.

Buyer can always apply to HDB to cancel the deal but the OTP is legal binding and seller has the rights to claim losses from buyer. Next, seller need not to payback 5k OTP to buyer cos buyer is at fault.

Hope the above help.

[bepgof 20]

hi

Just to check my understanding on payment of hdb resale flats. Is this correct?

Resale price : $770k

Valuation : $670k

COV : 100k

Owe HDB :250k

Owe CPF : 100k

Assuming buyer get 80% bank loan : 670 x 80% = 536 k

at OTP : Buyer pays $1k to seller

at exercise Option : Buyer pays $4k to seller

On 1st appointment : (seller gets $72k + 5k cash/cashier's order)

Buyer pays $770 x 0.10 = 77k - 5k = 72k ? in cash

2nd appointment : (seller gets $343k cash/cashier's order)

Buyer pays using CPF/bank: 536k to seller/CPF/HDB

Buyer pays balance : 770 - 77 - 536 = 157k to seller.

Bank pays seller : 536 - 100 - 250k = 186k in cashier's order to seller

Banks pays cpf : 100k.. into seller acct in 14 days.

14 days after 2nd appointment, Seller gets 100k in cpf.

Also want to check if buyer after 1st appointment, realize cannot get bank loan / cannot cough out $157k cash to seller.

What happens then? can the deal be call off..

does the seller need to pay back the buyer what has been paid?

Shld seller engage a lawyer to settle everything in the beginning in the first place ? cos' alot of cash involved.

Aiyo, yo have missed out the stamp duty fee which is at (Valuation x 3%)-$5,400.

Edited August 13, 2010 by bepgof

[Jgal 0]

Just sharing my experience, on 1st appointment, no cash transaction yet. Just signning of some document, exactly what i don't remember.

2nd appointment, seller will have 770k - 250k - 100k - 5k = 415k cashier's order.

100k will goes back to seller CPF in 14 days.

As for buyer,

1) Bank will pay 536k to HDB, 80% loan.

2) Buyer will need to pay in cash COV 95k(- 5k for OTP) + 33.5k(5% of 670k, since it is bank loan), total = 128.5k

3) The balance of 100.5k will be deducted from buyer's CPF OA. If not enough will have to make up with cash.

4) Buyer also need to prepare stamp fee in cash up front first before reimburse through CPF OA.

Buyer if taking HDB loan should apply for HLE first before OTP. If bank loan, buyer needs to obtain bank letter of offer before OTP submission to HDB.

The actual cash mandatory part is 128.5k and 5k OTP or more if 3) is true.

Buyer can always apply to HDB to cancel the deal but the OTP is legal binding and seller has the rights to claim losses from buyer. Next, seller need not to payback 5k OTP to buyer cos buyer is at fault.

Hope the above help.

Orh i see, wah, like that only until 2nd appointment then really see the $$... can put in clause to charge interest in some document for buyer to sign? how to protect seller? cos' if buyer failed to get the cash while seller already committed to another sale.. it's a lose-lose situation.. claim also take time..

begof bro : ha ha ha .. yeah.. i forget abt stamp fee.. cos' not think in terms of buyer

sorry.. see this on the hdb website.. is this applicable ?

Determine the amount of cash that you need to pay within 10 days from the date of the first appointment, if any

* Cash payment is required when the purchase price is above the market valuation or when the loan granted (with credit assessment) and the CPF usable for the purchase are insufficient to cover the purchase price. If the cash payment required is more than 10% of the purchase price, you are only required to pay 10% within 10 days from the First Appointment date. The balance must be paid on the resale completion. If the cash payment required is less than 10%, this amount must be paid within the 10 days period.

* The balance cash payment to be paid on resale completion must be in cash or cashier's order.

Edited August 14, 2010 by Jgal

[bepgof 20]

Orh i see, wah, like that only until 2nd appointment then really see the $$... can put in clause to charge interest in some document for buyer to sign? how to protect seller? cos' if buyer failed to get the cash while seller already committed to another sale.. it's a lose-lose situation.. claim also take time..

begof bro : ha ha ha .. yeah.. i forget abt stamp fee.. cos' not think in terms of buyer

sorry.. see this on the hdb website.. is this applicable ?

Your concern should be WHEN the CASH & CPF will reach you for selling:(if buyer take HDB loan, then I'm not too sure)

1. 1% cash immediate, after u give seller OTP

2. Cheque reach you on 2nd appointment. CPF acct, I think abt within 7 days after 2nd appointment.

Ppl take "bridging loan" -which comes as "optional" when you apply mortgage loan for new purchase, maximum allowable is 15% of valuation. This loan can "tide" you over while you waiting for the CASH & CPF $ from your sales of "old home". This loan charges at abt 6+% pa right now. If, say B loan=$150k for 6months. 6 month's interest~ $4500. So must plan properly.

Edited August 14, 2010 by bepgof

[Jgal 0]

Your concern should be WHEN the CASH & CPF will reach you for selling:(if buyer take HDB loan, then I'm not too sure)

1. 1% cash immediate, after u give seller OTP

2. Cheque reach you on 2nd appointment. CPF acct, I think abt within 7 days after 2nd appointment.

Ppl take "bridging loan" -which comes as "optional" when you apply mortgage loan for new purchase, maximum allowable is 15% of valuation. This loan can "tide" you over while you waiting for the CASH & CPF $ from your sales of "old home". This loan charges at abt 6+% pa right now. If, say B loan=$150k for 6months. 6 month's interest~ $4500. So must plan properly.

hmm... 1% cash? that's $7.7k .. i tot max is 5k.. now i am more confused..

actually, we do have enuff (CPF + cash) for the new house, just tat we are afraid that because of huge COV, buyer may only realised that they have problem with it later in the sale.... if the sale fall through, we are screw if we committed to another sale. Then , got to lelong my flat liao.

The more the buyer place in the 1st appointment.. the chances of failed transaction become lesser as he already cough out most of the cash portion.

So got to find an optimal time to book the next accommodation..

I seriously thinking of renting a place for 1/2 yr.. after the completion of sale.. then look for something on a long term.. maybe something with tenant until my rental place ends.

Edited August 14, 2010 by Jgal

[chronograph 0]

Your concern should be WHEN the CASH & CPF will reach you for selling:(if buyer take HDB loan, then I'm not too sure)

1. 1% cash immediate, after u give seller OTP

2. Cheque reach you on 2nd appointment. CPF acct, I think abt within 7 days after 2nd appointment.

Ppl take "bridging loan" -which comes as "optional" when you apply mortgage loan for new purchase, maximum allowable is 15% of valuation. This loan can "tide" you over while you waiting for the CASH & CPF $ from your sales of "old home". This loan charges at abt 6+% pa right now. If, say B loan=$150k for 6months. 6 month's interest~ $4500. So must plan properly.

Yes, i second that. Need to time your buy and sell closely. Like for my case, I took up bridging loan, buy/sell completed on the same day. The BL was about 60% of my valuation and i paid $900 interest just for 10 days.

[chronograph 0]

Orh i see, wah, like that only until 2nd appointment then really see the $$... can put in clause to charge interest in some document for buyer to sign? how to protect seller? cos' if buyer failed to get the cash while seller already committed to another sale.. it's a lose-lose situation.. claim also take time..

begof bro : ha ha ha .. yeah.. i forget abt stamp fee.. cos' not think in terms of buyer

sorry.. see this on the hdb website.. is this applicable ?

Where got such thing charge interest? I think it is illegal, u will have to play by the rules set by HDB if u buy HDB resales.

Like i mentioned in earlier post, Buyer need to get HLE or LO(bank) before committing. On seller part, you can request to see if they have all the papers.

I think for my case, my seller sold at a lost to me that's why i don't pay any cash during first appointment.

Edited August 14, 2010 by chronograph

[chronograph 0]

hmm... 1% cash? that's $7.7k .. i tot max is 5k.. now i am more confused..

actually, we do have enuff (CPF + cash) for the new house, just tat we are afraid that because of huge COV, buyer may only realised that they have problem with it later in the sale.... if the sale fall through, we are screw if we committed to another sale. Then , got to lelong my flat liao.

The more the buyer place in the 1st appointment.. the chances of failed transaction become lesser as he already cough out most of the cash portion.

So got to find an optimal time to book the next accommodation..

I seriously thinking of renting a place for 1/2 yr.. after the completion of sale.. then look for something on a long term.. maybe something with tenant until my rental place ends.

Every buy/sell there is always risk involved. U need to be prepared for all kinds of unforesee situation that result to fail deal. Take for example, if u buy already, but selling failed then u need to see if u can finance two property at the same time. Can always write to HDB to extend you selling so long u can prove that u r marketing your unit. So no need to lelong your flat.

That was what happened to my elder brother, financing 2 hdb units for 5 months before selling the old one.

Edited August 14, 2010 by chronograph

[bepgof 20]

hmm... 1% cash? that's $7.7k .. i tot max is 5k.. now i am more confused..

actually, we do have enuff (CPF + cash) for the new house, just tat we are afraid that because of huge COV, buyer may only realised that they have problem with it later in the sale.... if the sale fall through, we are screw if we committed to another sale. Then , got to lelong my flat liao.

The more the buyer place in the 1st appointment.. the chances of failed transaction become lesser as he already cough out most of the cash portion.

So got to find an optimal time to book the next accommodation..

I seriously thinking of renting a place for 1/2 yr.. after the completion of sale.. then look for something on a long term.. maybe something with tenant until my rental place ends.

My mistake, "think too fast", "hand type too slow" then "go", sigh. Old already.

1. $1K, + 4K

2. as previous.. sorry!

Edited August 14, 2010 by bepgof

[bepgof 20]

Where got such thing charge interest? I think it is illegal, u will have to play by the rules set by HDB if u buy HDB resales.

Like i mentioned in earlier post, Buyer need to get HLE or LO(bank) before committing. On seller part, you can request to see if they have all the papers.

I think for my case, my seller sold at a lost to me that's why i don't pay any cash during first appointment.

Confirmed, cash/cpf exchange hands on 2nd appointment, cpf a few days later.

Edited August 14, 2010 by bepgof

[Jgal 0]

Determine the amount of cash that you need to pay within 10 days from the date of the first appointment, if any

* Cash payment is required when the purchase price is above the market valuation or when the loan granted (with credit assessment) and the CPF usable for the purchase are insufficient to cover the purchase price. If the cash payment required is more than 10% of the purchase price, you are only required to pay 10% within 10 days from the First Appointment date. The balance must be paid on the resale completion. If the cash payment required is less than 10%, this amount must be paid within the 10 days period.

* The balance cash payment to be paid on resale completion must be in cash or cashier's order.

So no need to pay 10% after 1st appt ? that's what the hdb website say.

[delirious_jeff 0]

So no need to pay 10% after 1st appt ? that's what the hdb website say.

Need to pay. and there can be different scenarios.

Scenarios below involved taking HDB housing loan and the cash used for the deposit is excluded.

10% of purchase price within 10 days after 1st appointment must be paid.

Suppose purchase price is 100k, valuation is 70k

>> Within 10 days after 1st appt, 10% of 100k = 10k

>> 2nd Appt = 30k - 10k = 20k (cash/cashier order)

Suppose purchase price is 100k, valuation is 100k, CPF only have 1k,

>> CPF monies is first used to pay for the initial 10%.

>> Within 10 days after 1st appt, (10% of 100k) - 1k = 9k

[Warrior88 0]

Depend on HBD or Bank Loan.

Most forumers use bank loan, so it is norm to issue cheque to Lawyer for COV & 5% DP 2 wks before completion.

10% rule apply to buyer using HDB loan