Smooth Transition: Sell One House and Buy Another House without The Need for Temporary Housing

Enhanced Contra Facility, Temporary Extension of Stay (up to 3 months), and many more!

We have received many questions from our clients or clients-to-be over the years about how is best to go about selling their present house and buying another house without the hassle of moving into a temporary accommodation.

HDB understand the need for resale flat sellers to sell their resale flat and buy another resale flat at the same time without having to move into a temporary accommodation. Thus, they create a facility for this called Enhanced Contra Facility. With the Enhanced Contra Facility (ECF), HDB resale flat sellers can sell their existing HDB flat and at the same time buy another resale flat using the sale proceeds and refunded CPF monies. However, the refunded CPF monies cannot be used for the payment of stamp duty and conveyancing. With the ECF, sellers can reduce the cash outlay needed for their resale flat, and the mortgage loan amount needed and the subsequent monthly repayments. ECF can only be done amongst 3 parties, resale flat seller and buyer of another flat, the seller you bought the flat from, and the buyer who purchased the flat from you. The latter 2 parties must have not have applied for similar contra facilities for their flats. ECF can also only be done if any of the party has an outstanding loan with a bank. How to go about doing this? After accepting an Option fee from a buyer and issuing an HDB-prescribed Options to Purchase (OTP) to the buyer in exchange, resale flat sellers must also secure another HDB flat within the span time of approximately 4 weeks. Together for their sale and the purchase, they can apply to HDB for a facility called Enhanced Contra Facility in the HDB Resale Submission.

Even with ECF, usually sellers will have their sale of their present resale flat, and purchase of their another resale flat completed on the same day and at the same time, leaving them with technically zero time to even do house moving so the existing resale flat sellers may apply for above-mentioned temporary extension of stay. If the resale flat sellers intend to do renovation in their newly bought resale flat, they can arrange with the buyers to extend their stay temporarily in the flat for a period up to 3 months after the legal completion of the sale. Resale flat sellers and buyers shall privately work out their own terms for the temporary extension of stay. Terms to be discussed usually include whether there is rental amount involved, and if there is how much would the rental rate be, and whom between the buyer or the seller will pay for the property tax, Town Council Service & Conservancy Charge (SCC), and utility fees during the temporary extension of stay. Both the seller and the buyer do not have to show their agreement to HDB however they must indicate in the HDB Resale Submission that there will be a temporary extension of stay.

As the information on temporary extension of stay is passed on to the Property Tax department in the Inland Revenue Authority of Singapore (IRAS), new flat owners will automatically be charged a non-owner occupied tax rate. The property tax charges is usually about few hundred dollars unlike the usual owner-occupied charge that is less than S$100. We have seen a number of cases where inexperienced real estate agents had not advised their respective clients on the terms for temporary extension of stay and unnecessary disputes do arise occasionally when money is involved..

Besides extension of stay, sellers can also arrange with the seller they are buying the house from for early move-in. If the sellers intend to do renovation prior to legal completion of sale, this can be discussed upfront and usually indemnity letter will be drafted to indemnify the seller of any mishap in the renovation, and also includes terms such as reinstating the property to the original condition in the event of abortion of sale. This early move-in arrangement is more commonly available in the purchase of private residential property than in HDB resale flat.

 

At Pinnacle Estate Agency, we strongly believe in sharing our real estate knowledge to the public.⁠ For more content like this article, check out our Singapore Property Guides.

Have any question about selling your house and buying a new one smoothly without the need for temporary housing?

About Pinnacle Estate Agency

Pinnacle Estate Agency (CEA Licence No.: L3010718G) is the leading real estate agency in Singapore providing unparalleled personalised services, effective real estate marketing strategies, and Singapore property guides to everyone. Our real estate services include sale and leasing of HDB resale flats, private residential properties i.e. apartments & condominiums, and commercial properties e.g. HDB shophouses, private shophouses, retail shops, offices, and industrial properties.

Every client is served personally by our Key Executive Officer (KEO), Mr. Sumitro Ong who holds BSc. (Real Estate) (Hons.) from the National University of Singapore (NUS) and has more than 10 years of experience in the real estate industry.

Our effective real estate marketing strategies begin with pricing our clients’ properties right and make them shine online. Our in-house media team then captures 3D virtual tour, professional photos, and home tour video for all our sale and rental listings. We ensure premium placement on all real estate listing websites. 

We also tap on our co-broking networks of more than 30,000 real estate agents in Singapore. With maximum eyeballs reached, it significantly increases probability that our clients’ properties will be sold fast and at higher price than those of their neighbours’

At Pinnacle, we strongly believe in imparting all our real estate knowledge to everyone. Everyone can explore guides on buying, selling, renting, and investing properties, mortgages, and legal issues in our Singapore Property Guides section of our website https://pinnacle.sg/singapore-property-guides at no cost. Every guide is meticulously written by our KEO, Mr. Sumitro Ong himself.

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