Before we launch into a discourse on the why's and how's of a smooth HDB transaction, I'm going to start his article with a story.

Once upon not too long ago, there was a hardworking and resourceful real estate agent, who successfully negotiated a buy and sell of a HDB property. He skilfully helped both parties negotiate the deal so that both parties met their individual objectives.

Then, he brought the buyer to see the lawyers and the bankers to finalise the transactions. Unfortunately - he only approached them one week before the completion of the sale and prior to that the lawyers were not even aware of the transaction.

While the agent has been diligently doing his primary sales and negotiations duties, he has failed to do the necessary follow-up with the parties involved, i.e. the buyers, the bank and the lawyers. To ensure a smooth transaction he has to ensure that the bank loan proceeds smoothly and the buyers sign the necessary transfer, mortgage documents and CPF withdrawal forms at the lawyers' office. He didn't realise that the CPF Board needs three weeks to process the application. He also didn't realise that the seller can charge interest for late completion.

What ensued was a mad scramble to sort out the paperwork and engagement in rounds of re-negotiations with the seller, the seller's agent and the HDB, so that the transactions can be swiftly completed without the buyer having to burden himself further financially with the interest for late completion.

We managed to resolve the issues eventually through our relationship with the agents and the agencies, and negotiated a waiver of the interest for late completion, but this is not a process that we would wish for anyone to go through again. Follow-up is crucial.

Tricks of the Trade

Today, many agents are painfully aware that a HDB transaction relies on the input and the cooperation of many different parties, from the lawyers, to the bankers, to CPF Board and HDB itself. Therefore, the earlier he notifies the various third parties about his case, the better prepared they can be to cater to last minute emergencies.

So, the first tip of the trade is - lawyers are here to help!

You will recognise that lawyers are in place to help ensure that your client is going to get a glitch-free process. We can take a lot of the headaches away from you. So talk to us early and as often as you want, and let us deal with all the stuff that you sure wouldn't want to.

The second trick is - an agent can play an important part in ensuring a smooth transaction by doing tight follow-up.

Follow the advice below and you can very quickly take the pain away from the whole buying/selling/valuation/loan process.

For example, if your client wants to take a housing loan from a bank - you have to ensure that the bank gets all the necessary documents, like income statement, pay-slip, income tax assessment and CPF statements.

But, not all banks deal with loans the same way, so you have to do a little homework on what individual bank requirements are. Some banks for example, don't accept statutory declarations from self-employed; so your customers have to get better proof of income.

Besides the banks, the CPF Board also has its own way of dealing with things. For example, the Board takes a minimum of three weeks to process the application for CPF withdrawal.

In addition, just because the lawyers submit a CPF application, doesn't mean CPF will revert back to the lawyers if it needs any further information, or has any queries. These queries are sent by computer generated letters to the client direct. You have to impress on your client that any letter from the CPF Board has to be notified to the lawyers, so that we can monitor and action on their behalf.

The third trick is - ensure that the information is accurate!

We cannot stress this enough.

We have had a case where a wrong flat type was submitted to the banks, and the valuers discovered it only two days before completion. The case is a 5-room flat that was keyed in as an Executive Apartment, so there was a scramble to get another valuer to match the price, which was slightly higher than that of the normal 5-room.

While we resolved it without causing any delay, the shave was just too close for comfort.

Fourth trick - keep a lookout for buyers who are aged close to 55 years.

Agents should be aware of the Retirement Account scheme and the rules for the use of monies from such Account, for the purchase of property for people 55 years and above.

We've had a case where an agent brought a buyer to view a HDB flat. At that time, the buyer was less than 55 years old. When the agent did the financial plan calculation, there was a balance in the CPF Ordinary account of about $9,000.

So the financial plan made full use of the $9,000 for the purchase. However, when this buyer finally found the flat he wanted and signed the exercised the option, it was one week after his 55th birthday. Needless to say, the agent and the buyer quickly discovered that the money in the Ordinary Account was transferred to the Retirement Account.

Under normal circumstances, there must be a minimum of $80,000 in the Retirement Account, out of which, $40,000 can be in cash, and the balance $40,000 be pledged by way of property. But in actual fact, we cannot assume that $40,000 can be used in its entirety for the purchase of the property, as the CPF Board has a special calculation on how much a person can use for the purchase, which is not made known to the public.

So, any buyer who wants to use monies from his Retirement Account to buy a property has to get a statement from the CPF Board to determine the exact amount he can use.

When the buyer found that he cannot use the $9,000 from his Retirement Account he appealed and complained, but a rule is a rule, and the sale had to be aborted eventually.

The danger here is - not only did all parties involved lost precious time, effort and money in the process, the buyer could potentially get into a lot of trouble, as the seller can sue the buyer for not completing the purchase.

When In Trouble

Different people have different needs, and different situations require different solutions. The above tips are just some general guidelines to ease into a smooth HDB transaction.

However, when bigger or more complex problem arise, you have to get the advice and help from professionals. Therefore, it is always advisable to utilise this final tip: Know thy lawyer so that he can help you get out of tight spots!

You have to work with people that you are comfortable with and whom you can trust will keep your best interest when executing their jobs. There are no laws that say you have to use a specific lawyer to help your client execute the transaction, so take the time to scout for a law firm that you are comfortable working with.

A HDB transaction is not only about applications, approvals and paper work. It is also about negotiations, problem solving, experience and the human touch. You work better with people you feel comfortable about, so use this as a guiding principle when picking your work partner of choice.

Choy Weng Hon has been in the conveyancing line since 1970. Starting with Lee & Lee law firm, he has had a good 30 years of experience in this field of legal experience, most of which were spent in senior para-legal positions.

As the Senior Conveyancing Manager at LAWHUB LLC, Choy is responsible for planning and managing workflow, and is instrumental in resolving conveyancing problem issues. He also engages in training for agents.

Choy is one of the rare individuals who has experience in both the realty and legal industries. Besides being a seasoned para-legal practitioner, Choy is CEHA qualified and was a housing agent for three years.

As such, he is able to look at conveyancing situations from different angles, both from the agent's perspective and from a solicitor's perspective.