Should you buy a HDB Build-To-Order (BTO) flat or resale flat? That’s a common question on every HDB flat buyer’s mind.

Although, there is a third option — balloting for a home through the Sale of Balance Flats (SBF) scheme.

What is SBF HDB?

Sale of Balance Flats, or SBF, may be brand new flats left over from previous BTO sale launches, surplus Selective En block Redevelopment Scheme (SERS) replacement flats, or units whose buyers backed out on the purchase. They may also be older flats that were repurchased by the HDB.

Whlie BTO exercises are held four times a year, SBF launches happen only in May and November, concurrently with the BTO launches on the HDB website.

If you are open to getting a HDB SBF unit, read on!

HDB Sale of Balance Flats (SBF) Advantages

HDB Sale of Balance (SBF) Guide: What are HDB Repurchased Flats? (Photo Pexels Khoa Vo)

HDB SBF shorter waiting time

BTO flats take three to six years to complete. HDB SBF flats may offer a shorter wait for your new crib.

Depending on what you choose, you may get your flat almost immediately for completed projects and HDB Repurchased Flats, or at least look forward to a shorter wait for the BTO flats.

HDB SBF has more locations for you to choose from

While each HDB BTO launch only features a handful of estates, SBF launches are massive and will have HDB flats all over Singapore. If it’s an existing HDB flat, you will also be able to see the exact HDB block, unit number, price, and the ethnicity quota. Some of these locations may be BTOs that have yet to build, or in the process of construction.

Either way, when you get a HDB SBF, you will be able to get the exact address so you can check it out before application.

HDB Sale of Balance Flats (SBF) Disadvantages

HDB Sale of Balance (SBF) Guide: What are HDB Repurchased Flats? (Photo Pexels Yew Hui Tan)

HDB SBF flats may cost more than BTO flats

Like BTO flats, SBF units are also greatly subsidised, compared to the transacted prices of similar resale flats in the neighbourhood, but they still cost more than if you’d joined the BTO queue.

This is because the flat’s price is adjusted to the current market rate.

One buyer who shared his experience on local forum said that he paid $30,000 more for his SBF flat, compared to neighbours who applied via the BTO route. Another paid $50,000 more than its BTO price; however, he only waited for one year compared to over three years.

HDB SBF flats are “leftover” units

Many BTO exercises, particularly in popular estates, are oversubscribed right from the get-go.

So, the popular units with unobstructed views or fantastic Feng Shui may already be snapped up.

Usually, the leftover BTO units that you find in HDB SBF exercises may be high floors that are too expensive, on low floors, in unfavourable locations such as facing the centralised rubbish dump, or may have inauspicious-sounding unit numbers such as #04-04, which Chinese buyers tend to avoid.

But some may be carefully selected BTO units whose buyers had changed their minds, perhaps because they eventually bought an SBF or resale unit instead.

However, don’t diss HDB SBF exercises just because they are “leftovers”. Many times, you will find spanking new units with fantastic views, at mature estates at hefty discounts. Why? Because HDB Repurchased Flats go into the SBF exercises too.

What are HDB Repurchased Flats?

Repurchased flats are older flats that were sold and returned to the HDB for various reasons, such as the previous owners may have been unable to keep up with the payment, or a couple getting a divorce before they completed their Minimum Occupation Period of five years.

If you are buying a HDB Repurchased Flat, you can move into these vacated flats as soon as the paperwork is completed.

Buying a HDB Repurchased Flat? Check for loan sharks

The most common woe HDB Repurchased flat buyers face is when loan sharks turn up to collect debts incurred by the previous owners.

We have heard of horror tales of new owners waking up to paint-splashed doors and ‘Owe $ Pay $’ messages scribbled on walls.

Fortunately for one buyer who shared his story on a local forum, he only faced a letterbox stuffed with debt claims from loan companies. That soon stopped after he informed the companies that the previous owner had already moved out.

“I got [my flat] at 25 per cent discount compared to the resale price at the time, so it was all worth it,” said the happy buyer whose flat is on a high floor with unobstructed views.

Visit the HDB Repurchased Flat, talk to neighbours

Do visit the HDB Repurchased flat to look out for tell-tale signs of trouble, such as walls painted over to cover messages from loan sharks or notices stuck on the door. Try to chat up the neighbours to find out about the previous owner’s history.

One potential buyer checked out a unit at Sengkang and changed his mind after seeing the “calligraphy” on the walls.

However, rumour has it that sometimes, these may be the work of desperate fellow balloters who hope to scare off competitors keen on the same unit. (How true is this? It really sounds desperate to us.)

HDB Repurchased Flat: Owner passed away in flat?

In extreme cases, the HDB Repurchased flat could have been sold back to HDB because a tragic incident, such as suicide or a murder, had occurred in the flat.

Depending on how superstitious you are, this may be an instant deal breaker — or an opportunity to buy a flat at a hefty discount, with no competition! Again, visit the unit and ask the neighbours.

HDB Sale of Balance Flats: Higher chance than BTO?

Competition is notoriously stiff for SBF homes. Like BTO flats, more SBF units are allocated to first-timers who need a home more urgently than upgraders.

Since November 2015, 40 per cent of the two-room Flexi flats are set aside for elderly applicants; any unused quota is then distributed amongst the other households.

Depending on whether the flat is in a mature or non-mature estate, the SBF distribution for non-elderly applicants will also differ.

For example, for two-room Flexi flats, half the stock are reserved for Families under the Parenthood Priority Scheme; 30 per cent for Multi-Generation Priority Scheme families; 10 per cent for other families; and the remaining 5 per cent for singles.

For two-room Flexi and bigger flats, the ratio for families under the Parenthood Priority and Multi-Generation Priority schemes remain the same.

However, other families enjoy 15 per cent of the allocation, since singles are not allowed to purchase BTO flats bigger than a two-room unit.