Option to Purchase

After you have registered an Intent to Buy, 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 sellers.

If you intend to get an HDB housing loan, you need to have a valid HDB Loan Eligibility (HLE) letter from HDB before the 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 and the 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 have to pay a deposit to the sellers, comprising the Option Fee and Option Exercise Fee, which are payable at different points during the OTP process. You may negotiate the amount for the Option Fee and the Option Exercise Fee with the sellers, and it will form part of the resale price.

Payment When to Make Payment Amount to Pay
(in Cash)
Option Fee Granting of OTP $1 to $1,000
Option Exercise Fee Exercising of OTP An amount, which when including the Option Fee, does not exceed $5,000

Procedure to enter into a contract using the OTP

OTP Process

Read the steps below for more details.

Step 1: Negotiate and agree on the resale price

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

You may use the resale flat prices e-service to check the 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:

  • Registered your Intent to Buy
  • Obtained a valid HLE letter if you intend to take a HDB housing loan. The sellers may grant you an OTP only when you have a valid HLE letter
When entering the OTP

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

Housing loan from HDB

If you are taking a housing loan from HDB, please ensure that you have a valid HLE letter. You must have a valid HLE letter when the sellers grant you the OTP.

Completing the OTP

The 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 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 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 sellers have agreed to submit the resale application to HDB
8 (top half)
  • Option Date
  • Flat address
  • All 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 buyers when they exercise the OTP

Option Fee

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

Once the sellers have granted the OTP to you, they cannot grant another OTP to other 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 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 the HDB Resale Portal 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 the HDB Resale Portal.
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 the HDB Resale Portal after the sellers have granted you the OTP.

Once you have made the request, you can log in to the HDB Resale Portal 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 have to 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 Loan Eligibility (HLE) letter.

Housing loan from a financial institution (FI)

If you are taking a housing loan from a 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.

Signing and returning the OTP

To exercise the Option, you must sign on the OTP and return it to the 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 sellers. The amount, as stated in Step 2, is to be mutually agreed upon between you and the 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 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 seller’s 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.