How to Calculate Your HDB Sales Proceeds Correctly

by Nigel T.

hdb-sales-proceeds-calculation

Calculating HDB Sales Proceeds is not exactly the hardest, but yet most sellers will feel confused and uncertain when trying to calculate it themselves.

Your Finances are important, and you definitely do not want to get this wrong right?

Today, we shall help you be confident in calculating your HDB sales finances, all by yourself!

So, how can you calculate your HDB Sales Proceeds correctly without seeking a property agent’s help?

Your HDB Sales Proceeds can be easily calculated by using your HDB Selling Price minus your Outstanding Mortgage Loan, Total CPF Refund and other Miscellaneous Transaction Fees.

And the Sales Proceeds amount will be the Cash Amount which you will receive for the sale of your HDB flat.

Let’s dive in and show you what you need to get the required figures for your calculation:

Outstanding Mortgage Loan

When you sell your HDB flat, this will be the first thing that needs to be paid off first.

So, it is important to find out what is your outstanding mortgage loan amount.

(if your HDB is fully paid, you may skip to the CPF Refund section)

There are basically only 2 types of mortgage loan – HDB Loan & Bank Loan.

Let’s show you how to find out your outstanding loan amount for both loan types.

myhdbpage-flat-details

HDB Loan

You can easily find out your outstanding HDB mortgage loan amount as of today by logging in to HDB’s web portal to check.

But, you will need to have your Singpass ready to do this.

These are the steps to get to the page that shows your outstanding HDB loan amount:

  1. Click on this link: My HDBPage
  2. Log in using your Singpass
  3. Click on ‘My Flat’
  4. Click on ‘Financial Info’

And there, you will be able to see your outstanding loan amount as of today.

Bank Loan

If you are on a Bank Mortgage Loan, finding out the outstanding loan amount is also not that difficult.

Most banks should show the mortgage loan details when you log into the bank’s Internet Banking / Mobile App.

So, try logging in to the bank’s mobile app or internet banking website and you likely will be able to find out your outstanding mortgage amount.

Alternatively, you can also call up your bank to check the outstanding loan amount if you do not have internet banking access.

[Pro Tip for Bank Loan]

Check with your bank whether are there any bank penalties if you were to sell your HDB now.

This is because if your Bank Loan is still under a ‘lock in period’, you will likely be subjected to a penalty if you discharge your mortgage.

Summary on what to find out:

  • Find out your outstanding mortgage loan amount.
  • If you are on a Bank Loan, find out what is the bank penalty amount if you were to sell your HDB flat now.

CPF Refund

Most of us use our CPF to fund the purchase of our HDB flat.

And the amount that we have used from our CPF to pay for our property, will need to be refunded back to our CPF when we sell our HDB flat.

The refunded amount will need to include the CPF accrued interest portion as well.

Here’s how you can find out what is your total CPF Refund Amount:

cpf-page

It is very easy to find out how much you need to put back into your CPF if you were to sell your HDB flat today.

And similarly, you will need your Singpass in order to login to find out on CPF’s website.

Here are the exact steps to help you find out your CPF refund amount:

  1. Click on this link: CPF Members
  2. Log in using your Singpass
  3. Click on ‘My Statement’
  4. Scroll down to ‘Section C’
cpf-refund-for-hdb-property-sale

Now, you see the section ‘Property’?

These are the amounts that you will need to refund back to your CPF when you sell your property.

Add these 2 figures up (Net Amount Used + Accrued Interest) and you will get the exact CPF Refund amount as of today.

If your HDB flat has more than one owner, you will also need to find out the CPF Refund Amount of the co-owner.

Summary on what to find out:

  • Find out your total CPF Refund amount.
  • Find out your co-owner/s total CPF Refund amount.

Add and get the Total CPF Refund Amount for all owners.

Miscellaneous Transaction Fees

You also want to know the complete details on what other costs are involved in selling your HDB flat?

Let’s show you all the Miscellaneous Transaction Fees that you need to expect:

HDB Resale Submission Fee

$80

Property Agent Fees

1% to 3%

Selling Legal Fees:

– HDB Lawyer

est. $250 to $600

– Private Lawyer

est. $1400

HDB Resale Submission Fee

Basically, this is HDB’s admin fee for helping you to process the selling of your HDB flat. And it will just be a flat fee of $80 payable to HDB when you submit your selling transaction to HDB.

Property Agent Fees

The typical market rate that professional property agents charge for selling a HDB flat is 2% of the eventual selling price.

There are of course HDB selling services that promises to charge ridiculously low fees, but we do advice you to talk to them first, and decide whether you are comfortable with the representing agent and what they can offer you.

After all, you will want your entire selling experience to be pleasant, and not encounter any frustrations along the way.

 

Selling Legal Fees

There are 2 options for you: HDB Lawyer or Private Lawyer.

It is simple to decide if you just want the cheapest option available (everyone does this).

HDB Lawyer will be the cheaper option, and their legal fees are usually just a few hundred dollars (normally between $250 to $600).

But, you can only use HDB Lawyer for your conveyancing if your current HDB flat is under a HDB Loan, or is already fully paid.

The exact Legal Fee charged by HDB lawyer depends on your Flat Type, Outstanding Mortgage and Sale Price.

You can use this free HDB Legal Fee Calculator to get an accurate estimate of your legal fees if you decide to use HDB for your flat sale conveyancing.

 

If your HDB flat is on a Bank Loan, then your only option will be to engage a Private Lawyer for your HDB sale conveyancing.

The usual market rate for Private Lawfirm Legal Fees for acting in HDB sale is about $1400.

Exact Financial Calculation Steps

Before you start with the calculation, you will need a Selling Price as basis for your calculation.

If you are unsure, we have prepared a comprehensive guide to help you find out how much your HDB flat can sell for.

Ready? Let’s dive into the calculation.

To keep it simple, calculation is basically:

Selling Price Minus –

  • Outstanding Mortgage Loan
  • Total CPF Refund
  • Any other miscellaneous fees

 

And you will know what is your final balance sales proceeds.

Here’s an example for your easy understanding:

$500,000

Selling Price

$150,000

Outstanding Mortgage Amount

$250,000

Total CPF Refund

$100,000

Cash Proceeds After Sale

$10,000

Property Agent Fees

$90,000

Final Cash Balance

The above example shows a $100,000 Cash Proceeds which seller will receive from HDB on the Completion Appointment Date.

This is what property agents usually term as ‘Positive Sale’, as sellers will be able to get back cash upon selling their flat.

And with this Cash Proceeds, seller can then use it to pay their property agent fees.

(Do note that we did not include the HDB Resale Submission Fees ($80) and Selling Legal Fees in the calculation example as these fees would have to be paid separately by sellers during the transaction process)

Having a Positive Sale is a good situation to be in, but if you find out that you are in a Negative Sale, not all hope is lost.

If you really still need to sell, let us address your concerns on having a Negative Sale.

Negative Sale

In today’s market, it is rather common that some sellers see a ‘Negative Sale’ upon doing up their financial calculation.

This is mainly caused by sellers previously buying their HDB flat at a higher price, or it could be just simply due to the CPF accrued interest.

If you are facing this, and would love to read about it in detail, here is our comprehensive post about negative sale.

 

To cut things short, this is an example of a negative sale:

$500,000

Selling Price

$300,000

Outstanding Mortgage Amount

$250,000

Total CPF Refund

-$50,000

Negative Sale

In this example, you can see that there is a $50,000 negative sale.

And what will happen to the sellers when they face a negative sale?

According to CPF regulations, sellers will be required to top-up this amount of $50,000 back to their CPF in cash due to the sale.

However, CPF will on case by case basis, allow sellers to write off their negative sale amount provided the HDB flat is not sold below valuation.

So, if you are facing a negative sale but still need to sell your HDB flat to move on, you can proceed with your plans without much worries.

In the above example where the Total CPF Refund is $250,000 and the Negative Sale is $50,000 – Take note that only a balance of $200,000 will be available to be put back into the CPF account.

(Bonus) Financial Planning For Next Purchase

Now, with your Sales Proceeds calculation done up confidently, you may want to start planning for your future property purchase.

So how do you know what is your financial budget for your next property purchase?

Simple..

You just need to add these figures up to get your maximum purchase budget:

  • Total CPF Refunded
  • Current Existing CPF Available for Property Purchase
  • Maximum Approved Loan Amount

 

And that’s it!

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