Selling your house could be a very daunting and arduous task for many. Apart from selling your house, you will have to now consider where to buy and how to make sure the timelines all match up so you can have a seamless transition from the old house to the new house
Today, we will be touching on a few things which you must know before you sell your house:
MISTAKE 1 – Failure to check eligibility
For Private residential owners:
Can sell anytime but if sold within first 3 years after acquisition, Seller might incur Seller Stamp Duty which I will touch on in a bit.
For HDB:
5 years MOP before you can sell your flat (unless special circumstances)
Do remember to register your Intent to Sell
You can only proceed to the next step and issue an Option to Purchase (OTP) 7 days after you register your intent to sell.
CASE STUDY
Along the way, we have met some clients which have mentioned to us that they have previously lost a deal because they failed to register their intent to sell and eventually resulted in losing a buyer as they went to close for another unit during these 7 days delay.
MISTAKE 2 – Unexpected Hidden costs that could be avoided (Sellers’ Stamp Duty (SSD))
Before selling your house, make sure you have fulfilled at least 3 years if not you will be subjected to a Sellers’ Stamp Duty of 4% – 12% which can be quite hefty. Below shows the SSD rates payable acquired and disposed off within a certain duration. Govt implemented this rule as an anti-speculation measure to stabilize the property market.
| Date of purchase or date of change of zoning / use | Holding period | SSD rate (on the actual price or market value, whichever is higher) |
| On and after 11 Mar 2017 | Up to 1 year | 12% |
| More than 1 year and up to 2 years | 8% | |
| More than 2 years and up to 3 years | 4% | |
| More than 3 years | No SSD payable |
FOR EXAMPLE
$1 million property sold within first year after acquisition. Seller will have to pay a large sum of $120,000 of SSD to the Inland Revenue Authority of Singapore (IRAS). So always make sure you have checked you have passed the 3 years mark upon acquisition before you sell.
In most instances, the date of purchase/ acquisition of a property refers to:
Date of Acceptance of the Option to Purchase (Exercise date) or
Date of Sale and Purchase Agreement or
Date of Agreement for Lease (for new HDB flat)
MISTAKE 3 – Overlooked Home Loan Penalty
If you have taken a private home mortgage loan for the property you are disposing, make sure that you are currently NOT within the lock-in period. Do take note that even for floating interest packages, there might be a lock-in period.
Lock-in period generally differs from 1-5 years depending on the variations of fixed and floating packages
Incur a penalty fee of up to 1.5% of the outstanding loan amount if sold within lock-in period
In circumstances where you chose to take up your new home loan with the same bank again, you can appeal to waive off this penalty fee.
There are no prepayment penalties or lock-in period for those taking HDB loan.
FOR EXAMPLE
If you are selling a 2 bedroom condo and you have just recently refinanced. Your outstanding loan is $900,000. If you were to sell the house now and refinance it again either with the same bank or other bank, you will potentially need to pay a penalty fee of $13,500.
MISTAKE 4 – Cluttered and Dirty Houses
FIRST IMPRESSION COUNTS! Most of the buyers are emotional buyers and the very first impression and feeling they get when they step into the house can determine the sale and price of your property.
A recent 2021 survey done by the National Association of Realtors shows that
81% of homeowners say that a staged and tidy home makes it easier to sell and spend 73% less time on the market than a non-staged home.
CASE STUDY
A seller (Mr Tan)* came to consult us and requested our help to sell their unit as his unit has been in the market for months and he could not figure out why, so we requested a site visit to properly consult him and at the same time to take photos and videos as well. When we first arrived, the unit was cluttered and messy and the very first feeling and impression we had was far from a home that anyone would want. We also realized his pricing was abit too low as it was based off a transaction a year ago due to lack of transactions as well. We then proceeded with the consultation and eventually offered our services to declutter and stage his house with brighter furniture and accessories. Long story short, we managed to secure a buyer within a week and the price offered was approximately 32% above market valuation!
*Name edited for confidentiality purpose*
BEFORE AND AFTER HOME STAGING
At RedProp, we have sold over 100 homes. Homeowners that chose us to assist in the whole sale process, including the staging set up are able to sell their house faster and for better price!
MISTAKE 5 – Wrong Pricing! (Too low or too high)
Setting the ‘Right’ price and coming up with a pricing strategy for your house is a very important step which many people might undermine. You might set a price that is too low which could result in you selling at an undervalued price or you might set a price too high which will make your unit look like the ‘overpriced’ one that everyone will avoid.
To properly price your unit, there are a few factors that you will have to research and find out:
Your competitors pricing
Analyze the surrounding properties to better position your unit
Effects of the future developments around the area
Unit layout and unique selling points
Our RedProp team have a group of professional consultants to assist you with:
Comparative Market Analysis
Marketing strategy and positioning
Unit layout and orientation advantage
List and sell your unit with us at the best price today!
MISTAKE 6 – Lack of proper timeline planning
An indispensable step every owner must plan before they actually decide to sell their house because you wouldn’t want to be in a situation where you will have to consider sleeping on the streets or incur any additional unnecessary costs.
There are several other factors to consider such as:
FINANCING FOR YOUR NET PURCHASE
Some of the homeowners might require the money from the sale of their property first before they can purchase the other. This will require careful and prudent planning to allow enough time for your CPF and cash to be refunded into your CPF account and bank account respectively before you can effectively utilize it to finance your next property.
TIME TO RENOVATE
Planning to renovate your next home, or in certain circumstances where your seller needs extra time to renovate their home. You will need factor these into your timeline planning
AVOID PAYING ABSD
For homeowners planning their sale and purchase at the same time, always make sure you exercise your Option to Purchase on your sale side before your purchase side. If not, it will be registered as your second property as you have yet to officially sell your house. These could result in some complications with your financing, and you will incur Additional Buyer’s Stamp Duty (ABSD) on your purchase based on the rate of owning a second residential property.
