Step-by-Step Guide To Applying For Sales Of Balance Of Flats
With a long waiting period of 4 to 6 years for BTO completion and resale HDB flat prices getting increasingly out of budget, one option new home buyers can take is the Sales of Balance of Flats (SBF).
In Singapore, there are three different modes of sale for newly built HDB flats: Build-To-Order (BTO), Sales of Balance of Flats (SBF) and Open booking of flats. Open booking of flats is open all year round for application, while SBF is usually launched twice a year together with the May and November BTO sales launch. In this article, the mode of sale we would be focusing on is SBF.
Unlike BTO, Sales of Balance of Flats (SBF) consist of surplus flats from previous BTO launches, rehousing flats from Selective En bloc Redevelopment Scheme, and repurchased flats. This means home buyers of SBF would have a much shorter waiting time as the construction for SBF flats is already completed or underway to completion. Additionally, SBF provides more options for buyers to choose from in both mature and non-mature estates as the units are not limited to current BTO launch locations.
While SBF may seem like a better option, the odds of getting a SBF in comparison to BTO is much lower due to the limited number of flats. Homebuyers should note the ethnicity quota for the SBF they are applying for. Often there are fewer options for Chinese buyers. We would also have to weigh our choices between BTO and SBF flats, as each home buyer is only allowed to apply under one sales mode which is either BTO or SBF.
Here is a step-by-step guide to apply for a Sales of Balance of Flat.
Read Also: Step-By-Step Guide To Buying A HDB BTO Flat
#1 Eligibility To Purchase Sales Of Balance Of Flat
Before applying for the Sales of Balance of Flat (SBF), we need to make sure that we and our co-applicant qualify for SBF. Depending on our household composition, we can qualify for new HDB flats under the Public Scheme, Fiancé/Fiancée Scheme or Orphans Scheme. Check out our [BTO Guide] Eligibility Criteria For Buying A HDB In Singapore for more details.
We should also meet the following requirements:
Citizenship: Both Singaporean citizens or one Singaporean citizen and one permanent resident.
Age: Above 21 years old.
Income Ceiling: The current combined income ceiling for HDB new flats is $14,000. The income can increase to $21,000 for extended family/ multi-generational income ceiling. Depending on the project, some of the flats may have a lower income ceiling listed (i.e. some 3-room flats can have an income ceiling of $7,000). Do check the individual flats for the specific income ceilings here.
Property Ownership: Both parties should not own any properties locally or overseas and have not disposed of any property over the past 30 months. Applicants should not have applied nor received CPF housing grants before or have only done it once before.
As each applicant’s background is different, we can check for our eligibility online here.
We would also need to ensure that we have the financial capabilities to take on the purchase or mortgage. We can estimate our finances here with the HDB calculators.
For HDB loan financing, we can check on our loan potential limits here. For financial institutions, we can check with the individual banks directly or engage the help of a mortgage broker such as Redbrick.
#2 Shortlisting Your Idea Flat Balance Of Sale Flat
Unlike BTO flats where the estate specifics are released three months before launch (previously it was six months), SBF buyers would have to wait for the sales launch to look at the available options. Regardless, we still have ample time of about one week to decide. We can also leverage on HDB Flat portal to filter through the options and narrow down the criteria we desire. One useful feature on the HDB Flat portal is the function to filter SBF units by completion date.
Since SBF flats are typically surplus flats from previous launches, options can include lower-level flats or flats with less than desirable facings. Buyers should double-check the flat specifics to ensure that we are comfortable with the flat option. There are also older flats in mature estates that have been returned to HDB due to unexpected reasons and thus have shorter remaining leases, so it is worth doing thorough research.
#3 Applying Online Via HDB Flat Portal During Launch
Once we are comfortable with our selection, we can apply online via the HDB Flat Portal. For each launch, we can only apply for one estate and flat type. An administrative fee of $10 is payable for the application. For more details on the conditions to apply, we can refer here.
As the demand for SBF housing is highly competitive, it is worth factoring in the priority schemes we are eligible for. Depending on the flat type and our family type, the priority given will vary. In general, first-time applicants will enjoy more priority and enjoy two ballot chances.
Buyers can keep track of their option’s odds by looking at the applicants for each estate. For this year’s May 2021 Sales Launch, we can track the applications here.
#4 Check Outcome Of Ballot, Get Queue Number And Consider Optional Component Scheme (If Applicable)
After selecting our flats, we would have to wait about 1.5 months for our results after the application has closed.
Once selected, we would be given a queue number. Depending on the SBF option we pick, there maybe be more than one flat option for us to pick. Regardless, we should be prepared with our desired flat option if we are selected for an HDB appointment.
Additionally, if applicable, we can consider the Optional Component Scheme (OCS) which allows us to add essential fittings and fixtures into the cost of our purchase. Check out our Complete Guide To HDB’s Optional Component Scheme (OCS) for more details.
#5 Head Down To HDB For First Appointment
After one to two weeks, we would be called to HDB for an appointment to book our flat. For the appointment, we would need to bring our appointment letter, NRIC and HDB Loan Eligibility (HLE) letter.
At the appointment, we would also be required to pay for the option fee which serves as part of our flat down payment. We can expect to pay $500 for a 2-room Flexi, $1,000 for a 3-room and $2,000 for 4-room and larger.
#6 Head Down to HDB for Second Appointment To Sign Lease And Pay Down Payment
After our first appointment, we can expect a period of about four months before the next appointment. The second HDB appointment is arranged for us to sign the Agreement for Lease and make a down payment for our purchase. We would be required to bring along our appointment letter, NRIC, HLE letter for HDB loan or a Letter of Offer (LO) for a bank loan.
While signing the Agreement for Lease, we would have to decide the ownership structure between Joint-Tenancy or Tenancy-In-Common. For Joint-Tenancy, both owners will have a 50-50 stake in the flat, regardless of their financial contribution. For Tenancy-In-Common, each party can portion their individual share of the flat. For more details, check out our article on the pros and cons of Joint-Tenancy and Tenancy-In-Common.
For the down payment, the amount required would depend on the type of loan we are using. For HDB loans, we are required to pay 10% of the purchase price, of which we can use our CPF Ordinary Account (OA) savings to finance fully.
On the other hand, if we are using a bank loan, we are required to pay 25% of the purchase price. 5% of the purchase price have to be paid in cash while the remaining can be paid with CPF OA savings.
Applicants eligible for the Staggered Downpayment Scheme would only be required to pay half of the down payment at this appointment. The remaining amount would be payable when the keys are collected.
#7 Get Your Keys
After settling the appointment, we can look forward to getting our keys sooner than later. Since we are applying via SBF, we can expect a shorter waiting time compared to our BTO counterparts. Depending on the construction time frame, the waiting time frame ranges from one to four years.
Applicants with completed SBF can get their keys within three months from signing the Lease of Agreement. Upon collection of keys, we would become the official property owner of our Sales of Balance of flat.
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