Option to Purchase

After you have obtained a valid HDB Flat Eligibility (HFE) letter, considered your mode of financing and worked out your budget, you may proceed to look for a suitable flat that meets your budget. Once you have decided on a flat and agreed on a price for it, you may proceed to obtain an Option to Purchase (OTP) from the flat sellers.

If you intend to get an HDB housing loan, you must have a valid HFE letter from HDB indicating your eligibility for HDB housing loan before the flat sellers may grant you an OTP. If you intend to get a housing loan from a financial institution, you must have a valid Letter of Offer (LO) before you exercise the OTP. You may concurrently request an In-Principle Approval and LO from participating financial institutions when applying for the HFE letter through My Flat Dashboard.

You and the flat sellers must use the HDB-prescribed OTP for the resale transaction. Any other agreements and/ or supplementary agreements relating to the sale or purchase of the flat are not valid under the Housing and Development Act.

Print only 1 copy of the OTP as each form has a unique serial number. You must state the serial number of the OTP when you submit a resale application to HDB.

The OTP is a legally binding contract between you and the flat sellers. Read the Important Notes of the OTP and the Terms and Conditions of Resale carefully before entering into a contract.

Deposit to sellers

You must pay flat sellers an Option Fee when they grant you an OTP, and an Option Exercise Fee when you exercise the OTP.

You may negotiate the amounts of Option Fee and Option Exercise Fee with the flat sellers, which will form part of the resale price.

Payment by flat buyers to sellers Stage of OTP Amount to pay
Option Fee Granting of OTP Between $1 and $1,000
Option Exercise Fee Exercising of OTP An amount, which when including the Option Fee, will not exceed $5,000

You are encouraged to make payment using digital payment modes to secure independent proof of payment.

Procedure to enter into a contract using the OTP

OTP process Jul 2023

Read the steps below for more details.

Step 1: Negotiate and agree on the resale price

You and the flat sellers must mutually agree on the resale price of the flat.

Check the recent transacted resale flat prices to help you make an informed decision on how much to pay for the flat. The figures are updated daily based on HDB’s registration of the resale applications received.

Before entering into an OTP

Ensure that you have obtained a valid HDB Flat Eligibility (HFE) letter via My Flat Dashboard.
When entering the OTP

You and the flat sellers must declare the true resale price of the flat to HDB, and must not enter into any supplementary/ other agreements or arrangements that may cause the resale price as declared to be inflated or understated.

Note: It is an offence to give false information relating to the resale application - HDB may take the necessary action(s) as stated in the Terms & Conditions, Option to Purchase and Application Form(s).

Step 2: Sellers grant the OTP to you

The flat sellers will grant you the OTP to buy the resale flat at the agreed resale price.

Completing the OTP

The flat sellers must fill in these sections in the OTP:

Page Sections
1
  • Option Date
  • Flat address
  • Purchase price (resale price of the flat)
  • Option Fee (between $1 to $1,000)
  • Option expiry date (21 calendar days from the option day, including Saturdays, Sundays and Public Holidays. For e.g., if the flat sellers grant an Option to you on 1 April, the Option will expire on 22 April at 4pm)
  • Names (as in NRIC) and NRIC numbers of all the flat sellers and buyers
2 Clause 6.1(c): Option Exercise Fee
4 Clause 12: Number of days from the date of exercising the Option that you and the flat sellers have agreed to submit the resale application to HDB
8 (top half)
  • Option Date
  • Flat address
  • All flat sellers must sign on the OTP
  • A witness may sign on the OTP (seller's salesperson or any person, aged 21 years or above, and not involved in the resale transaction)
9 (optional) Inventory list of the flat
10 (optional) Authorisation for another person to receive the Acceptance of the flat buyers when they exercise the OTP

Option Fee

At this stage, you do not have to sign on the OTP. However, you must pay an Option Fee to the flat sellers. The Option Fee should be a sum between $1 and $1,000, to be mutually agreed between you and the flat sellers.

Once the flat sellers have granted the OTP to you, they cannot grant another OTP to other flat buyers until the OTP granted to you has expired.

Step 3: Review purchase during Option Period

The OTP is valid for 21 calendar days from the date the OTP is granted.

The Option Period is 21 calendar days (including Saturdays, Sundays, and Public Holidays). It is given to you by the flat sellers, from the date of granting the OTP (refer to Step 2). 

You should use the Option Period wisely and not rush into exercising the OTP. During this period, you must log in to My Flat Dashboard to:

Confirm mode of financing Confirm your mode of financing (i.e., cash, CPF savings, and/ or a housing loan) for your flat purchase in My Flat Dashboard.
Request for Value of Flat

You must submit a Request for Value for the flat if you are using your CPF savings and/ or taking up a housing loan to finance your flat purchase. You may submit the request via My Flat Dashboard after the flat sellers have granted you the OTP.

Once you have made the request, you can log in to My Flat Dashboard to view the progress and outcome.

Step 4: Exercise the OTP or allow OTP to expire

To proceed with the flat purchase, you must exercise the OTP within the Option Period. Otherwise, you must wait for the OTP to expire.

Proceed with flat purchase: Exercise the OTP

To proceed with the flat purchase, you must exercise the OTP during the Option Period. If you are taking a housing loan or using your CPF savings to pay for the flat, ensure that the flat value* is available before you exercise the OTP.

* Read request for value for more information.

Housing loan from HDB

If you are taking a housing loan from HDB, ensure that you have a valid HDB Flat Eligibility (HFE) letter.

Housing loan from a financial institution (FI)

If you are taking a housing loan from an FI, ensure that you have a valid Letter of Offer (LO). The date of issue of the LO must be on or before you exercise the OTP. You may concurrently request an In-Principle Approval and LO from participating financial institutions when applying for the HFE letter on My Flat Dashboard.

Signing and returning the OTP

To exercise the Option, you must sign on the OTP and return it to the flat sellers:

Page Sections
8 (bottom half)
  • You and all your co-buyers must sign on the “ACCEPTANCE” section
  • A witness may sign on the OTP (your salesperson or any person, aged 21 years or above, and not involved in the resale transaction)

Option Exercise Fee

When you exercise the OTP, you need to pay an Option Exercise Fee to the flat sellers. The amount, as stated in Step 2, is to be mutually agreed upon between you and the flat sellers.

Not proceeding with flat purchase: Allow OTP to expire

If you do not wish to proceed with the purchase, you need not take any further action. Upon expiry of the OTP, you will forfeit the Option Fee and you do not need to continue with Step 5.

Step 5: Submit the resale application

After you have exercised the OTP, you and the sellers must decide when to submit the respective portions of the resale application to HDB.

You and the flat sellers must both submit the respective portions of the resale application separately within both timeframes:

  • Within the agreed number of days as stated on page 4 of the OTP, and
  • Within 7 days of each other’s submission

A resale application is only complete when HDB has received both you and the flat sellers' respective portions of the resale application and the necessary supporting documents.

Read about submitting a resale application and what you need to do before the application is accepted and approved.

Important note:

The applicant(s) and occupier(s) listed in your resale flat application must remain the same as those in your HFE letter application.

If you need to make any changes to your HFE letter, e.g. addition/ removal of household member(s), change in status from an applicant to an occupier or vice versa, marital status, citizenship, ownership of private properties, etc., please follow the steps below:

Submitted a resale application Steps to take
No
  1. Cancel your HFE letter
  2. After cancellation, apply for a fresh HFE letter (i.e. complete Step 1 and Step 2 of the buying process again) via My Flat Dashboard
Yes Write to us via MyRequest@HDB with your resale case number. We will advise you further.