If HDB’s confirmed value is below the agreed price for your resale flat, work out the cash difference before deciding whether to exercise the Option to Purchase (OTP). For a purchase using CPF savings or a housing loan, the amount above the confirmed value must be paid in cash. You may need cash for other parts of the purchase as well, so calculate the whole amount due and when you need it.
Check the expiry written on the OTP and speak to the parties handling your purchase while there is time. A valuation gap can be manageable for a household with a cash reserve. The same gap can make a purchase unworkable for a household that has allocated its cash to moving, repairs or another home’s costs.
- Confirm the agreed price, HDB value and OTP expiry from the actual documents.
- Calculate the difference and obtain the revised financing figures.
- Add other cash payments without counting deposits twice.
- Keep enough for the first weeks of living in the home.
- Decide what is feasible before exercising the OTP.
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Start with the right figure and deadline
An asking price shows what a seller advertised. An agreed price is the figure on the transaction. For a buyer using CPF savings or a loan, HDB’s Request for Value determines the value used in assessing that financing. Recent resale prices help with research, while your own purchase needs the relevant result for the specific flat.
HDB’s Request for Value instructions require submission by the next working day after the Option Date if you intend to use CPF savings or a housing loan. Buyers paying entirely in cash without either do not need that request. Use the HDB resale buying overview to confirm the steps. Keep the Request for Value submission deadline and the option exercise deadline on separate lines.
Read the option you have been granted. Check the date and time for exercise, what payment is due at exercise, and which financing documents you need. If a bank loan is involved, ask the lender to confirm the updated numbers and the required financing documents before you rely on them. A household estimate is a planning tool until the lender or relevant authority confirms the applicable terms.
Back to contents · Next: Make a cash worksheet before deciding
Make a cash worksheet before deciding
Create one row for the cash-over-valuation amount. Then ask for a payment breakdown covering any other cash contribution, the option and exercise payments, duties, fees, moving costs and essential repairs. Write down what is paid, what remains, and where each number came from.
| Cash check | What to enter | Why it matters |
|---|---|---|
| Price above value | Agreed price less confirmed value, if positive | Shows the part of the price that requires cash |
| Cash already paid | Option fee and any other verified amount paid | Avoids counting the same money twice |
| Further purchase payments | Remaining cash items and dates confirmed for your case | Shows what needs to be available and when |
| Household reserve | Moving, essential repairs and a realistic buffer | Shows what is left after the transaction |
| Available funds | Money you can actually use by each deadline | Separates an expected receipt from money already available |
The full financing calculation can depend on factors beyond the difference, such as the loan terms, applicable limits and CPF use. Ask the relevant party for a revised breakdown. Label the cash gap as part of that breakdown if it has already been included. Add it once.
Check where the cash will come from
Money expected from a sale, maturing account or family contribution needs a date. Put the expected receipt next to the date the payment is due. If the cash only arrives after the relevant purchase payment, it does not fill that payment gap on time. Ask about the confirmed arrangements while there is still time to make a decision.
Back to contents · Next: Worked example with a $20,000 gap
Worked example with a $20,000 gap
A family agrees on an illustrative price of $620,000. HDB’s confirmed value is $600,000. The difference is $20,000. Separately, the family has $48,000 of available cash and wants to keep $14,000 for moving, essential repairs and an emergency reserve. That leaves $34,000 available for the purchase in its internal plan.
After accounting for the $20,000 gap, $14,000 remains within that purchase allowance for all other remaining cash items. If the verified breakdown requires another $16,000 in cash on top of the gap, the family is $2,000 short of its intended reserve. It checks whether any payment was double-counted and which figures are final. It then decides whether it can genuinely sustain the purchase or should let the option lapse, taking account of the applicable terms.
The illustration excludes any assumption about what HDB or a bank would lend to this household. It shows why “we have enough for the gap” and “we can complete and move in comfortably” are two separate calculations.
Back to contents · Next: Decide before the option expires
Decide before the option expires
If the cash requirement is manageable, confirm the final financing and deadlines before proceeding through the formal exercise steps. If it is too high or still uncertain, check the consequences of allowing the option to expire. HDB’s Option to Purchase guidance explains the option process and fees. Discuss any proposed change through the applicable HDB procedures and relevant parties. The value result itself does not alter the price in the option.
A family that continues looking can use the experience to set an offer ceiling and a separate reserve for uncertainty. Compare similar registered sales before making another offer and keep the cash needed for repairs and moving visible in the same budget.
Back to contents · Next: Stress-test your reserve before you exercise
Stress-test your reserve before you exercise
Make a second version of the worksheet where an expected receipt slips and essential repairs cost more than planned. Use only delays or costs that matter to your household. If you are already paying rent, include any overlap needed before you can actually live in the resale flat. Put the resulting reserve next to your available cash.
Give every figure one of three labels: confirmed, estimate or missing. Loan and CPF calculations can have several inputs, so ask who confirmed each part of the purchase breakdown. If the exercise date is close and a material amount remains missing, bring that issue to the relevant party while there is time to ask questions.
The reserve is a family decision. A household with another home to leave on a fixed date may need more room for interim costs than a household that can move gradually. Keep the worksheet with the inspection and move plan so the purchase payment and the first weeks of living there stay visible together.
Back to contents · Next: Frequently asked questions
Frequently asked questions
Does the seller have to reduce the price?
The confirmed value is used for the applicable financing assessment. Check your OTP and the formal process if you are considering a different price. Discuss the situation with the relevant parties before acting.
Do official resale prices reveal what the next flat’s cash gap will be?
Registered prices are useful comparables. They do not give the HDB value for the flat you are buying. Use them for research and use the actual value and financing figures for the decision on your own option.
What if the gap is zero?
You may still have cash payments for other parts of the purchase. Use the complete payment schedule and keep your household reserve separate.
Back to contents · Next: Next steps and official sources
Next steps and official sources
Write the option expiry at the top of your worksheet. Ask for the verified payment breakdown, cross out any duplicate amounts and check that each payment can be funded by its due date.