HDB resale flats will always appeal to those who don’t want the long wait and shrinking unit size of BTOs. Unfortunately, resale prices have skyrocketed since COVID and probably will continue rising.
For those who are planning to cut out the property agent and buy their own resale flat in Singapore, you must must must take note of Cash over valuation (COV).
For the uninitiated, COV is the difference between the purchase price and HDB’s valuation, and can only be paid in CASH.
That’s right: no loan, no CPF, just cold hard cash upfront. Imagine $40 or even $50k flying out of your bank account before you even do renovation!
The bad news is that even though asking prices have been climbing, HDB’s valuation isn’t tracking market prices as they’re discouraging people from buying resale flats at high prices. However, if you really need or want a certain flat asap, there’s nothing much you can do about the high asking prices.
There is however, a glimpse of hope: there’s one final way you can try to lower the COV if your cashflow is tight, which is writing an appeal letter to HDB!
We’ve outlined the steps to write the appeal letter below and added a template that you can follow to draft your own letter.
P.S. do note that we submitted this appeal letter via the HDB feedback form!
Introduction
Dear Sir /Madam,
We are writing in to appeal the valuation that has been done for [insert address here]. Our valuation number is [xxx], OTP serial number is [xxx].
Kindly find below the reasons why we believe the flat has been undervalued at [insert valuation amount here].
State past recent transactions in your area as a benchmark.
Tip: You can search for past resale flat transactions on HDB portal!
PAST RECENT TRANSACTIONS
- Last 6 months: Blk xxx Floor 6 to 8 – $700,000
- November 2022: Blk xxx – $645,000
- Mar 2022: Blk xxx Floor 02 – $620,000
Include current listings in your area.
Tip: Include a note on EIP if it applies!
Based on our research, there is low supply and high demand in [insert neighbourhood here], which is by itself a very popular neighbourhood. To add on, many flats available have ethnic restrictions imposed and cannot be sold to Chinese buyers.
- Avg. 3-bedroom for sale in District xx costs $900,000
- Block xxx with ethnic quota restrictions: $670,000
- Block xxx: starting from $670,000
Share your unit’s condition.
Tip: HDB does not always send people down to evaluate your flat’s condition and sometimes gauges value based on past valuations.
- Rare 4A corner unit, single lift serving 2 units/floor
- Mid-level
- Existing renovation works done (changes in doors etc.) lower renovation cost
Emphasise amenities in the area.
Tip: You can usually find all these detailed in the listing on property websites!
- Located directly opposite xx Shopping Mall with many eateries, convenience shops, provision shops
- 5 min walk to xx MRT and future xx MRT
- <10 min walk to xx Park
- x supermarkets within 1km radius
- x clinics within 1km radius
- 10 bus stops within 1km radius
- Within 1km radius of xx Primary School
- Within 2km radius of xx Primary
- Top tertiary schools in the area: xx
- Others: Neighbourhood police post, CC, childcare centres
Sign-off
Based on these factors above, we strongly believe that the value of the flat should be higher than what was provided to us. We sincerely hope our appeal will be considered based on the reasons stated above.
Thank you for taking time to read this email, and we look forward to your favourable reply.
Major caveat: this does not guarantee that your flat’s valuation will be raised!
HDB seems to outsource their valuation to external parties, who are probably the ones reading your valuation letter as well. They can choose not to budge on their decision and HDB won’t do anything about it.
Despite that, it’s still worth trying if you’re very sure you want a certain unit and want to minimise the amount of cash paid upfront.
This has worked for some homeowners (unfortunately not us!) but it was still worth a shot to get the valuation company/HDB to reconsider.
PIN THIS!
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