This is about how I helped a 55 year old client, Mr V, to upgrade from his HDB flat to a three bedroom condo unit and fulfilled his dreams of living in a private property.
How I met Mr V and what he wanted initially
Mr V and his wife came to one of my viewings of a HDB executive flat that I was selling. He was currently staying in a Sengkang 5 room flat that is 15 years. This was also during the period where there was concerns about the “decaying HDB flat lease” issue. But for Mr V, he wanted a bigger place for his family and thought that a HDB executive flat was the solution. Although he was a buyer (direct buyer in our industry term) and I was just selling my executive flat for my seller, I wanted to help him achieve his dream.
How I changed his mind
I sat down with Mr V and Mrs V and we discussed his options. The first key thing is that Mr V is almost 55 years old and about to withdraw his CPF monies. It is important for anyone approaching 55 years old to make the right property decision as monies can be locked up in retirement account and not be available for use anymore. The immediate thing we did was to “pledge his property” to ensure that he need NOT set aside the full retirement sum.
I then explained to Mr and Mrs V on how buying a HDB flat (an executive flat that he was keen on was already 15 years old) does not make sense for his financial circumstances. No doubt he wanted the space but an aging HDB flat does not help in the future of his family.
We did a very detailed financial calculations of his funds if we sell his five room HDB flat. We then combine that sale proceeds with his CPF withdrawal funds and how much he can loan from the bank. All these calculations are normal work of a competent agent as it is VERY IMPORTANT for a client to feel that he can really afford the place he is keen on.
Selling his five room flat
Following our discussion, he decided to engage me to be his exclusive agent for the sale of his HDB flat. I started my usual digital marketing process and uploaded his unit to all my property portals. Viewings started but it was a challenging period for selling an aging HDB flat (due to the furore over the lease of a HDB flat). Eventually we got a buyer (who is downgrading from an executive flat himself for retirement) and we worked out a good deal for both the buyer and Mr V (the seller).
Buying a Condo for Mr V
At the same time as selling the five room flat, I bring Mr V and Mrs V to view for a condo unit. We discussed his available budget and his financial planning (I insisted that Mr V not allowed to stretch his loan period to 75 years old, I insisted that he cannot pay more than $x amount in cash per month and I insisted that he must finished his loan payment by 65 years old etc). And we discussed his preferences (near to his wife’s work place) and other lifestyle needs (e.g. Mr V always wanted to live in a condo with a gym and a large swimming pool). I then pre-selected several condos that fit the budget and his preferences.
Finding his dream home
We found Mr V’s dream place after many weekends of viewing. We then started the negotiations with the seller of the condo and luckily for us, the seller (and his ERA agent) were a delight to work with. We quickly settled on the price for the condo. At the same time we managed to work out a deal with the buyer for Mr V’s HDB flat. Madness but fun 🙂
Coordinating exercise dates to avoid ABSD
A key factor in any “sell HDB, buy condo” deal is to structure the deal carefully. There are two main consideration. Time line (e.g. when we sell the HDB and when we can take possession of the condo) and ABSD (e.g. when we exercise the sale of HDB and when we exercise the purchase of condo). All these are worked out carefully with Mr V and also the seller of the condo and the buyer of the HDB flat. What a huge coordination feat !
We also managed to use HDB contra facility to help the buyer of his flat. Although this is not my job, it is critical that we help the buyer of his flat so that Mr V (the seller) can have a smooth HDB transaction.
Completing the deal
We managed to complete the deal smoothly, getting an extension from the buyer of Mr V’s HDB flat and an early move in for Mr V’s condo unit. This allows Mr V ample time to do some simple renovation and the more massive job of moving his years of possession from the HDB flat to the condo. Marie Kondo will be proud of Mr V and Mrs V.
After Mr V moved into his place, he invited me over for a visit. It was such a pleasure to see him, his wife and his children totally enjoying the new place. Yes it was not as big as what he initially wanted but the children now has their own rooms and the family has a nice big balcony. Most importantly Mr V’s financial future looks more assured with an asset that is less susceptible to leasehold issues that a HDB flat has.
And best of all, Mr V gets to swim almost every day in the swimming pool. Something that he wanted after years of hard work and a busy day in office.
I am delighted and moved to tears on how I helped my client achieved his dream. That is what keep me going day to day.