What happens when you have negative sales for your HDB?
Don't have to panic yet.... Take a deep breath and lets go thru the explanations first.
So a HDB negative sale happens when the selling price of the HDB flat, is less than the sum of CPF to be refunded and the outstanding loan.
How did it happened?
Let me show you an example:
Your are selling your Hougang flat at $500,000.
Your current HDB or Bank loan balance is $450,000.
Total CPF to be refunded, plus accrued interest for both of you is $90,000
So, $500k - $450k = $50k ( sales proceed )
Return to CPF $90k - $50k ( sales proceed ) = Shortage $40,000
This is what happens when your selling price is not able to cover the CPF to be returned plus the outstanding loan to be cleared.
( Note: When there is a negative sale, naturally your sales proceed will be returned to your CPF, after clearing your home loan. )
You will then be subjected to all the rules of CPF after the monies go back to the accounts.
Now the most IMPORTANT question, do you need to return the short fall of $40,000 from your own pocket??
Luckily the answer is 'NO'.
This will be applicable if you fall under scenario 1.
1. At or above the market value of the flat:
'You will have to refund the selling price which includes the option monies, less your housing loan and resale levy (if any) to your CPF accounts.
You do not have to top up the P+I shortfall to your CPF accounts.
However, any option monies (e.g. option fee and option exercise fee) received from your buyer in cash upon the sale of your flat are considered part of the selling price and need to be refunded to your CPF accounts before the transaction can be completed.'
Here you should also note that in the event of a negative sale, the option fee and exercise fees will have to be surrendered back to your CPF accounts.
Therefore, its really important to market your HDB at a fair market price, market the property correctly and have adequate viewings and offers to appeal for the wavier of topping up the short fall.
2. Below the market value of the flat
'We may require you to refund your P+I to your CPF accounts. The shortfall can be topped up in cash. We will assess your case before informing you of the amount to be refunded.'
If you do sell your property below the market value, you will have to bring it up to CPF your reasons for the appeal.
Of course, try your best not to go into scenario 2.
If you have any questions or is still unclear as to what you can do, and whether you have done it correctly.
Let us know your queries.