Resale Property in Singapore | How to Save Money Buying Resale Flat

Property | Real Estate
by Priyadarshini 31 January 2023

Here are some tips to maximize your savings on your resale flat purchase, from avoiding agency costs to selecting the right housing financing. In Singapore, resale flats are definitely not cheap. Aside from the rising prices, we’ll also have to pay a substantial Cash Over Valuation (COV). And if you want a flat in a mature estate or near an MRT station, you’ll have to pay a premium because of its high demand. In this blog, we tell how you can save money while buying resale property in Singapore

So, whether you’ve had several failed BTO flat application attempts or don’t want to pay the resale tax if you get another BTO flat after your first, you’re undoubtedly wondering if there’s any way to lower resale flat rates. With a few tips and tricks, you’ll be able to save a lot of money that could be spent elsewhere. Here are seven strategies to save money when purchasing a resale apartment.

Resale Property in Singapore

Do Not Use an Agent

Property brokers are a godsend when it comes to avoiding tedious paperwork and looking for houses to view. However, if you’re willing to do it yourself, you can save a lot of money on agency costs. Property agents typically charge a percentage of the transaction price, and while there are no official fees rules, the current industry norm is 2%. Although it may appear modest, purchasing a S$600,000 flat will already cost you S$12,000, which you can use to cover additional costs such as remodeling fees. It may be intimidating, but as long as you’ve done your homework and are confident in getting the best deal, you’ll be fine flying solo.

Maximize Grant Opportunities

You might think that only applicants for BTO apartments are eligible for awards, however buying a resale flat qualifies you for a number of housing subsidies as well, assuming you match the qualifying criteria. Taking advantage of such grants can go a long way toward assisting you in saving money and redirecting finances elsewhere.

Selecting a Home Loan Wisely

Unless you have a large sum of cash in your bank or have recently sold your former home for a greater price, you will most likely require a housing loan to finance your new property. And, because you have the option of choosing between an HDB and a bank loan, it’s essential to think about it thoroughly before committing to either. While HDB loans provide the steadiness of a fixed interest rate throughout your tenure, as well as the added leniency of enabling you to make early repayments without penalty, bank loans typically have lower interest rates, allowing you to save money in the long run.

It is up to you to decide which is more important: reduced interest rates or steady rates. You may be able to save money in the long run if you choose a bank loan, but this also means that you may spend much more in certain months owing to market conditions. However, if you’re financially solid and willing to put up with higher interest rates for months, a bank loan will surely benefit your wallet.

Choose a Less Priced Apartment

Some homeowners are particularly choosy, avoiding unfavourable levels and unit numbers, aiming for an apartment 15 stories or higher, or needing a corner unit for added solitude. While everyone has their own list of must-haves for their next home, these features usually come at a high cost. So, if you’re not too picky about your unit, this is where you can truly save money, up to tens of thousands of dollars. Choosing an apartment in a non-mature estate might also help you save a lot of money.

However, keep in mind that you should not abandon your entire to-do list simply to save a few bucks. It’s understandable if you have standards that you prioritize and refuse to compromise on. Because this will be your new home for the next few years, choosing a unit that compromises your comfort may not be the best trade-off.

Opt for a Well-Kept Home – Resale Property in Singapore

If you don’t mind spending a few thousand dollars on renovations to make your new home seem exactly like your Instagram board, you can settle for a well-maintained house. Well-maintained does not always imply completely renovated. The house should simply be in decent condition, so you won’t have to spend a lot of money on renovations or repairs. Keep an eye out for their pipe systems, wall finishes, and cabinetry. The most crucial thing to look for is any evidence of termites or mouldy walls, as these could suggest a more serious problem.

Avoid homes with built-in furniture as well, as they will be more expensive to repair and replace. If they are in good condition, consider whether the space is optimized and practical so that you can utilize it as well, rather than purchasing it over and then hacking it down completely.

Don’t Make any Compromises when it comes to the Direction of your Home

Many homebuyers take the orientation of their unit very seriously, whether it’s because of the humidity from the afternoon sun or because it has good Fengshui according to your Fengshui master’s recommendation. If you’re not superstitious and believe that the direction is unimportant, reconsider. For example, north- or south-facing units are the most enticing to homebuyers because they may avoid direct sunlight throughout the day and benefit the most from the wind. East and west-facing units, on the other hand, receive direct sunlight all year, making your apartment feel brighter.

Be a Negotiation Champ 

In addition to all of the above, being able to haggle on the offer is the ultimate approach to save a lot of money on your resale flat. Knowing your budget, defining non-negotiables, and comprehending the seller’s motivations for selling will make all the difference. You should also conduct your own market research by learning about previous transactions of surrounding units and getting to know the property in question in order to determine how much you can negotiate.

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