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  • Writer's pictureAaron Lin

Ask Aaron Now: Sell Or Buy? Upgrade Or Downgrade? How To Do? Stay Where?

Summary

There are cons associated with a temporary extension of stay including fewer potential viewers and the missing out of buyers who want to move in quickly.


Finding a place to stay in the interim allows you to avoid the complexities and hassles associated with a temporary extension of stay.


Buying first and selling later might be preferable if you do not require the cash proceeds from selling your existing property to buy your next house.


Article

The HDB Contra scheme is a useful scheme when you are selling your existing HDB flat and buying a new one. This scheme only applies when you are changing from one HDB to another, and there are loan limitations involved. One minor problem is that the day you hand over the key to someone else is the day you receive your keys; there will be a lot of logistical planning and shifting involved on the same day.


A few years ago, HDB allowed for a temporary extension. But this extension is at the expense of the buyer since the buyer still has to pay the instalments and town council fee during this extension period. With this imbalance between buyer and seller, the process of negotiation will usually involve the buyer pushing the price lower depending on the period of extension.


Furthermore, you might miss out on buyers who sold their place and are looking to move in quickly when you use a temporary extension. Since some bank loans do not allow for Contra, not every buyer or seller can use the contra scheme. Using the Contra scheme and imposing temporary extension requirements may reduce the pool of potential viewers and buyers.


Some buyers may also ask for early move-in, which will be at the expense of the seller. Sellers will find it risky to allow for renovation to occur before handing over the keys.


My recommendation is to find a place to stay in the interim. While some may complain that it is troublesome to have to move two times, the rush in timing and complexity of the process imposes a lot of stress on buyers. If you do not have a place to stay, rental is always a possible option.


If you do not need the proceeds from selling your current house to pay for your new house, you can simply buy first, sell later. Specifically, I am referring to completing the buying process before selling, since there are requirements by HDB for you to sell off your first property within 6 months.




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