Get Your Option To Purchase (OTP)
Once the price is agreed upon, the flat sellers will grant you an Option To Purchase (OTP). However, in exchange for the Option, you will need to pay an Option Fee to the seller. The Option Fee should be a sum between $1 to a maximum of $1,000, to be negotiated between you and the seller. You have 21 calendar days option period to decide if you wish to proceed with the purchase.
At this stage, you are not required to sign on the OTP. Once the seller has granted the OTP to you, he cannot grant another OTP to another buyer until the OTP granted to you has expired.
Buyers who are eligible for and intend to obtain an HDB housing loan must have a valid HDB Loan Eligibility Letter when the sellers grant them the OTP. The HDB Loan Eligibility Letter is valid for 6 months from the date of issue.
Buyers who are taking a bank loan must have a valid Letter of Offer from a bank/financial institution when they exercise the OTP.
Buyers who are not taking any housing loan are not required to obtain an HDB Loan Eligibility letter from HDB or a Letter of Offer from a bank/financial institution, but will have to indicate that they are financing the flat purchase fully with their CPF savings and/or cash when they submit the resale application to HDB.
Filling in the OTP
Sellers and buyers of resale HDB flats are advised to read these notes and the clauses of the Option to Purchase before completing the form and entering into a contract for the sale and purchase of the flat.
You or the seller must fill in these sections in the OTP:
- Option date
- Flat address
- Purchase price (resale price of the flat)
- Option fee (between $1 to $1,000)
- Option expiry date (21 calendar days from the option day, including Saturdays, Sundays and Public Holidays. For example, if the seller grants an Option to you on 1 April, the Option will expire on 22 April at 4pm)
- Names and NRIC numbers of all the sellers and buyers
Top half of page 8
- Option date
- Flat address
- All sellers must sign on the OTP
- A witness must sign on the OTP (seller's salesperson or any person who is a Singapore Citizen or Singapore Permanent Resident aged 21 years or above and not involved in the resale transaction)
Make Use of the Option Period to Review the Purchase
You should use the Option period wisely and not rush into exercising the OTP. During this period, you must:
- Use the HDB Resale Portal to confirm your mode of financing and request for an assessment of the flat’s value
- Decide whether you really want to buy the flat
You will be required to indicate your mode of financing for your flat purchase in the HDB Resale Portal, and submit a Request for Value of the flat you are buying.
Confirm Mode of Financing
You need to decide whether you will use cash, CPF savings, and/or a housing loan to finance your flat purchase, and indicate your mode of financing in the HDB Resale Portal.
Request for Value of Flat
If you are using your CPF moneys and/or taking up a housing loan to finance your flat purchase, you will need to submit a Request for Value to HDB to determine the flat’s value. The assessment will form the basis for your CPF usage and/ or the reference for a housing loan from HDB or bank/ financial institution, unless otherwise advised by a bank/ financial institution. You will need to pay a processing fee of $120 (including GST) to HDB.
If a valuation of the flat is required, the appointed valuer will contact the flat seller to arrange for a flat inspection. Flat sellers are required to allow the appointed valuer to inspect the flat within 3 working days, as stated in the OTP.
HDB will inform you via email once the value of your flat is available in the HDB Resale Portal, typically within 10 working days from your request.
- You can only submit a Request for Value after you have been granted an OTP by the seller of the flat
- You must submit to HDB the Request for Value, together with scanned copy of Page 1 of the OTP, by the next working day, after the Option Date.
- The value of the flat will remain valid for 3 months from the day it is made available in the HDB Resale Portal, if you exercise the OTP. If you do not submit a resale application within the 3-month validity period, you will have to submit a new Request for Value
Exercising the OTP
After you have indicated the mode of financing and the valuation of the flat is made available in the HDB Resale Portal, you may decide to:
Proceed with the flat purchase and exercise the OTP within the Option Period. You need to pay the seller an option exercise fee, where the total
of the option fee and option exercise fee must not exceed $5,000. You or the seller must fill in:
- Clause 6.1(c) on page 2 of the OTP: Option Exercise Fee
- Clause 12 on page 4 of the OTP: Number of days from the date of exercising the Option that you and the seller have agreed to submit the resale application to HDB.
Bottom half of page 8 of the OTP:
- You and all your co-buyers must sign on the “ACCEPTANCE” section in the OTP
- witness must sign on the OTP (Any person who is a Singapore Citizen or Singapore Permanent Resident aged 21 years or above and not involved in the resale transaction)
If you decide to exercise the OTP, please make sure you have registered your Intent to Buy. If you are taking a housing loan from HDB, please make sure you have a valid HLE before your seller grants you the OTP. If you are taking a housing loan from a FI, please make sure you have a valid Letter of Offer before you exercise the OTP.
- Give up the flat purchase, and forfeit the option fee to the Seller. The OTP will lapse after 21 days.
Resale Portal Now! Procedures to enter
into a contract using the OTP Sample of an