Guide to HDB Valuation: How much is the HDB flat worth?

Image of an old HDB flat in Singapore, subject to resale flat HDB Valuation

Guide to HDB Valuation: How much is the HDB flat worth?

Are you thinking of getting a resale flat? If you are, you’ll need to be familiar with the HDB valuation. 

Getting a resale flat isn’t just as simple as negotiating the right price with the seller. There are still other procedures you’ll need to look into, and the HDB Valuation is crucial.

Here, we’ll give you a breakdown of what the HDB Valuation is about and how you should go about applying for it.

An Overview: What is the HDB Valuation?

What is it?
An estimation of how much the resale flat is worth. 
What does it affect?The amount of CPF savings you can use, loan amount you may take, and Cash-Over-Valuation (COV) to pay.
How to get an HDB valuation report?After the Seller grants an Option to Purchase to the Buyer, a Request-for-Value may be submitted by the Buyer the next working day by logging into HDB e-Service.

To put it simply, HDB Valuation is the estimate of how much the resale flat is worth. Before you can apply for the HDB Valuation, you’ll first need to come to an agreement with the seller. The seller will then have to grant you an Option to Purchase

Requesting for an HDB Valuation price on the resale flat

To submit an HDB Valuation request, you must submit the Request-for-Value with an attached scanned copy of page 1 of the Option to Purchase.

Here’s a step-by-step guide to walk you through the application process:

Step 1: Submit your Request-for-Value on the next working day stated on your Option Date in the Option to Purchase granted by your seller.

Step 2: Log in to HDB e-Service with your NRIC no. and SingPass to proceed with the submission.

Step 3: Follow the step-by-step guide on HDB e-Service.

Step 4: You can check the status of your Request-for-Value via HDB Resale Portal. The HDB letter informing the buyer of the value will remain available for viewing and downloading up until 1 month after the resale completion.

What happens next?

HDB will then decide whether a valuation of the flat is required to determine the value of the flat. If yes, they will assign any private valuation firms on their Panel of Valuers to conduct the flat valuation.

Upon submitting the Request-for-Value, you agree to accept HDB’s decision and the valuation conducted by HDB’s assigned valuer. 

How much is the processing fees for each Request-for-Value?

The processing fee for each Request for Value is $120 (GST inclusive), paid for by the buyer. After the Request-for-Value is submitted, the processing fee paid is non-refundable.

What is the validity period of the HDB Valuation?

Do note that the HDB Valuation is separate from HDB’s approval for a resale flat to be sold. Getting a flat valued by HDB does not guarantee that the transaction would be successful. Once you’ve received the valuation figure, you should submit your resale application as soon as possible.

The valuation figure will remain valid for 3 months from the day it’s published on the HDB Resale Portal. If you, the buyer, do not submit a resale application within the 3-month validity period, you’ll have to submit a new Request-for-Value. 

In this event, the housing loan amount granted by HDB or any bank/financial institution and the use of CPF savings for the purchase of the flat will be based on the new value determined via the new request.

Why do you need to request an HDB valuation?

The HDB Valuation will influence several things. 

Firstly, it’ll determine how much buyers can use from their CPF funds to pay for the resale flat. The determined value of the flat will also be used as a reference point for housing loan applications from HDB and the bank. This way, loans are not given out to pay for overpriced or over-valued flats.

Another aspect the HDB Valuation would determine is the Cash-Over-Valuation (COV) you’ll need to pay. COV is the difference between the HDB flat’s assessed value and the agreed price that the buyer is willing to pay. 

Person requesting for HDB Valuation using the laptop

How is the HDB housing loan amount calculated based on HDB valuation?

The loan amount will be based on the HDB Valuation figures. 

Different institutions have different regulations. For HDB housing loans, you can loan up to 90% of the purchase price/property value and have to pay 10% in downpayment. On the other hand, bank housing loans are only allowed to lend up to 75% of the home’s value.

Suppose your resale HDB flat is valued at $700,000, your HDB loan would be 90% of the loan-to-value figure:

90% x $700,000 = $630,000

If you’re getting a bank loan or 75% for the same flat, it would also be based on the same loan-to-value amount.

75% x $700,000 = $525,000

Deciding between a bank loan vs an HDB loan? Find out more about the differences here.

What if the agreed price is higher than HDB valuation?

When the agreed price between the seller and buyer is higher than the HDB valuation figures, buyers will need to pay the difference to the seller in cash. 

Take, for instance, the seller and buyer’s agreed price is $750,000. After HDB valuation, the HDB flat is valued at $700,000. This would mean that the COV is $50,000, and the buyer would have to settle this amount with the seller in cash.

 Phone with a tag labelled ‘sign here’

CPF usage and home loans are only based on HDB Valuation figures or agreed price (whichever is lower), and they don’t apply to the COV figures. 

Hence, although the buyer agreed to buy the resale flat at $750,000, his loans would be based on the $700,000 figure instead. 

You won’t be able to use CPF or home loans to cover this amount, and you’ll need to pay the balance to the seller.

What is the seller’s role in the HDB valuation process?

After granting the Option to Purchase, sellers will need to agree to undergo HDB Valuation procedures. Just like buyers, sellers have to accept any valuer assigned to them. They must also allow the assigned valuer to access their flat any time in the day for this process.

How HDB Valuation has affected the property market

In the past, processes were different as the selling price of the HDB was decided only after the HDB Valuation. 

The valuation process was then brought online and accessible to all, and buyers and sellers would focus their negotiations on the COV. As a result, this caused prices to shoot up drastically and made HDB flats more expensive than they should be. Instead of negotiating prices based on the perceived value of the flat, buyers and sellers were negotiating based on the COV.

Following this, HDB ceased publishing COV figures online. The changes in procedures ensured that buyers and sellers were genuine with their agreed price, and prevented unnecessarily price hikes for resale flats and made HDB housing more affordable. 

Want to find out more about buying resale flats? Browse our 10-step guide to purchase an HDB resale flat here.

Read about property stamp duty in our ultimate explainer guide here.

Are you a soon-to-be HDB homeowner? Find out about the Home Protection Scheme here.

At FinanceGuru, we seek to help homeowners find the best home loan and help them achieve their financial goals. Learn more about how you can optimise your home loan and uncover potential ways to save you money and time. Get a non-obligatory assessment and loan product recommendations today. 

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