3 Reasons Why It’s Better To Sell Your Existing Property Before Buying A New One

1. Selling first gives you certainty

The process of finding a good buyer for your property might take some time, unless you intend to sell it for a very low price. If you were to buy first, you might be under time pressure to quickly dispose of your first home, which can be very stressful especially if you wish to get a good price.

And if the buyer for your first home doesn’t exercise the OTP in time before the exercise date of the purchase OTP, you will be subjected to Additional Buyer’s Stamp Duty (ABSD) and also lower LTV (if your first home has an outstanding loan), hence you may not have enough funds to proceed with the purchase, hence losing your deposit.

Hence selling first gives you certainty of finances and also control of your timeline.

It will also take a while for you and your agent to fix up your current home, take decent good photos to market your property.

2. You have six months to sell your existing property after buying a resale private property

For you to get a refund of the Additional Buyer Stamp Duty (ABSD) paid, you must sell your existing property (whether HDB or private) within six months after buying the second private property.

Do keep in mind that this is through the ABSD remission. In other words, you must pay the ABSD first before getting a refund (one of the spouses must be a citizen) if you sell your first residential property within 6 months after the date of purchase of the second residential resale private property. This means that you’re under a time constraint if you buy your new property before selling your existing one.

HDB flat buyers must sell their existing HDB flats within 6 months of purchasing the new one since two HDB flats cannot be owned simultaneously.

3. A substantial amount of money must be put down before selling your existing home

Even if you are confident of selling your existing house within 6 months at a decent price and getting the ABSD refund, you need to carefully estimate your ability to acquire a new house without having to sell your current home.