Financial News and Advice in Singapore

How To Negotiate And Offer The Right Price When Buying A HDB Resale Flat

|Posted by | HDB, Home Ownership
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Is the long wait for a BTO flat turning you off? Buying a resale HDB flat is definitely the fastest way to get a roof over your head. Buyers, here are some tips to sharpen your negotiating skills.

When going into the resale market to buy a HDB flat, you’ll eventually reach a stage of negotiating where you haggle over the price with the seller (or the seller’s agent) till you both reach an amount that satisfies both parties.

However, getting to a fair price takes some work. And no, we’re not talking about your local grocer.

If your negotiation skills are a little rusty, we’ve got just the thing to grease up those hinges. Leave your emotions at the door and let’s explore everything you need to know about negotiating an offer without busting your budget.

How to offer the right price

How to negotiate property price like a pro

How to offer the right price

#1 Do adequate market research 

As a keen buyer, making a move on a resale flat can be tricky. Set the price too low and you’ll risk alienating the owner entirely. Set the price too high and you’ll just be on the losing end of the deal. That, and it could cost you a significant amount of cash in the process.

To avoid those two outcomes, it’s best to put in the work by comparing prices within the property’s estate.

While it is a tad time-consuming, you‘ll want to do your research for a couple of reasons: 

  • To get an idea of how competitive the area is 
  • To know whether the selling price is comparable to past transactions

Once you know the market range, it is easier to start the ball rolling in your negotiations as you’ll have a clearer picture of your minimum and maximum offer.

Pro tip: To get an idea of the market in the vicinity, check out past resale transacted prices within 200 metres from the unit and block on the HDB website.

Source: HDB

#2 Get to know the property in question 

While market trends and past transactions are important to take into account, the property you’re interested in may even come at a premium if it has exceptional features. In fact, some homes are so sought-after that they are sold at a million-dollar price tag.

For example, some premium features to note are: 

  • Location
  • Proximity to an MRT station or the CBD
  • Spacious layout
  • Major renovation
  • Long balance lease
  • High floor
  • Corner unit

It’s also important to know if the property is in high demand as this would increase the likelihood of high cash over valuation (COV). As a buyer, you want this to be as low as possible.

#3 Set your budget (and stick to it)

To avoid overstretching your finances, be sure to determine your price limit. If you’re looking at a property that is likely priced at a premium, how much COV are you comfortable with?

It is not unheard of for HDB flats in mature estates to fetch S$10,000 to S$40,000 in COV as they are in short supply.

Note that COV is not covered by your home loan or CPF and has to be paid entirely in cash. If the seller is driving a hard bargain and insists on a price that exceeds your budget, you’ll know that it’s time to walk away.

The last thing you want is to commit to a house that will inevitably restrict your lifestyle in order to make the mortgage payments. Sure, you get to live in your dream house but at what cost?

Pro tip: To ensure you get the most affordable home loan package out there, be sure to check out comparison sites like SingSaver for the best deals.

How to negotiate property price like a pro

#1 Go into the discussion well-informed

No one should go into a battlefield unarmed. This is why you shouldn’t go to a negotiation without the necessary market research to back up your initial offer.

For starters, take a look at the market prices on the HDB Resale Flat Prices page to know exactly how much similar flats are going for within the estate. These days, property sites also offer indicative pricing tools for you to fiddle with and get an unofficial valuation of the property.

This is where your preparation from ‘How to offer the right price’ will come in handy.

Another tip: Nowadays, there are Zoom viewings that let you view houses from the safety of your own home. You can gauge your competition by checking out the number of participants that took part in the viewing.


Refresher: What happens if HDB’s valuation is lower than your purchase price?

This is the jittery part where you don’t know if you’re going to pass or fail a test. After the flat owner and yourself agree on the price, and after he/she grants you the option to purchase, HDB will conduct an official valuation of the unit. 

Let’s say the agreed price is S$550,000. HDB’s valuation turns out to be S$500,000. You’ll have to pay the S$50,000 difference (A.K.A. COV) in cash. Note that this S$50,000 to be paid is part of the purchase price, and not something that’s on top of it. 


#2 Consider the owner’s motivation to sell 

If you’ve been around the block, you’ll realise that sellers tend to fall into distinct personas that clue you in on whether they are urgent and/or serious about selling.

Are they empty nesters looking to downgrade to a smaller unit? If they are, it is likely that they might have time on their hands and are simply testing the waters. Simply put, they are not so eager to sell.

On the other hand, there are sellers who are in a time crunch and need to seal the deal ASAP. There are also those who have trouble attracting buyers as their home might have undesirable traits. 

Ask the right questions and you’ll be able to find this out pretty quickly.

One other tip to determine if you’ve got bargaining power: Find out how long the listing has been up. If it’s been a while, it may mean that the seller is having trouble sealing the deal, thus giving you the upper hand when negotiating. 

#3 Arrive at a fair price 

At this stage, anticipate some push and pull with the seller. After all, sellers may not be so inclined to settle on your first offer.

But that begs that main question everyone would ask: How much should the offer amount be exactly?

And if that unit you’re eyeing is a hotshot and you face many competing buyers, you’d also ask: How much higher than the asking price should you offer?

There’s no one hard answer; but remember all the legwork you’ve done in the intel gathering steps? Those are crucial in helping you determine if you should be starting your offer below or over the asking price. 

It is safe to assume most owners would want to profit off the sale to comfortably fund their next house. Plus, your research may reveal to you that their asking price is way beyond the estimated valuation of the flat. A good rule of thumb to try out here is to take the estimated valuation figure and add the maximum COV you’re willing to pay. 

Don’t forget you’re your own agent here, it would really do you a world of wonders to befriend the seller’s agent. You’ll get to scope out useful information such as the lowest price the owner can stomach, or competing offers, which would lend you a better gauge of how much you should make yours.  

Pro tip: Don’t show your hand and offer your maximum budget at once. Instead, start with your lower offer first and slowly inch upwards as the negotiation progresses. Always remember not to go beyond your highest offer.

#4 Keep your cool but tap out if need be

Unlike buying a BTO flat, resale HDB transactions can be unpredictable. While some negotiations may go smoothly, there may be times where the seller insists on a selling price that’s set at a significantly higher premium than the going market rate. Once you’ve caught wind of that, it’s best to walk away no matter how idyllic the home may seem.

Take comfort in knowing that the housing market is vast and you can always find another property that fits your needs and, most importantly, your budget. As the buyer in the negotiation, it’s important not to let your emotions cloud your judgement as you might end up disappointed if the deal falls through.

Making sure that you’re able to afford the home loan repayments every month should always be your top priority.

Your negotiation toolkit:

Read these next:
How To Buy A House In Singapore: A Complete Guide (2021)
How Much Can You Borrow For Your Home Loan?
HDB BTO, SBF Or Resale: Which Should You Pick?
Buying A HDB Resale Flat: How To Minimise Cash Over Valuation (COV)
What Type Of HDB Flats Can Single Singaporeans Buy?


By Marissa Saini
Your friendly neighbourhood cat enthusiast who enjoys not being broke. Spend less, save more is the name of the game. Firm believer that being financially savvy is not about the destination, but the friends you make along the way.