Should I Sell My Current Property First Before Buying?

This is the question I am asked most often, and it does not have a universal answer. What it has is a decision rule.

Start with the question underneath the question

When someone asks whether to sell first, what they usually mean is: how do I do this without ending up exposed?

So the useful framing is not which sequence is better in the abstract. It is which sequence leaves you solvent and unhurried if things go slightly wrong — because in a transaction with this many moving parts, something usually does.

What selling first actually gives you

You know your number. The property is sold, the loan is repaid, the CPF refund has gone back, and you are looking at an actual bank balance rather than an estimate. Every property you view is assessed against a real budget.

You are also, in most cases, buying as a household that does not own another residential property at the point of purchase — which keeps ABSD out of the picture and keeps your new loan treated as a first housing loan.

Your sale's completion and your new home's completion rarely align neatly, so you may need somewhere to live in between. That means either an interim rental, a stay with family, or negotiating to lease back your old place from the buyer for a short period — which is sometimes possible and sometimes not.

What buying first actually gives you

One move. You secure the property you want, at a price you have seen, without a clock running.

That is worth something real, particularly for households with school-going children or anyone who genuinely cannot face moving twice.

The costs are concentrated at the start. You will potentially be holding two residential properties at the moment of purchase, dependent on the timeline of your purchase and ABSD payable upfront on the new purchase. For married couples with at least one Singapore Citizen spouse, a remission may be claimable if their first matrimonial property is sold within the prescribed window — but the money leaves your account first and comes back later, and the conditions have to be met exactly.

Your loan-to-value limit on the new purchase is also lower while the existing housing loan is outstanding, which means more cash and CPF upfront, unless you clear off your existing outstanding loan.

An illustrative example

A 40 year old couple of a combined income of $30,000 owns a flat they believe will sell for $900,000. They still owe $180,000 on the loan. Between them they have used $220,000 of CPF, and accrued interest has built up to roughly $60,000 on top of that. Selling costs come to about $18,000.

Doing the math: $900,000 less the $180,000 loan leaves $720,000. Refunding $280,000 to CPF leaves $440,000. After selling costs, they have about $422,000 of cash, plus $280,000 sitting in CPF available for the next purchase.

That is a strong position of a combined $702,000 in equity from their current property, without ever reaching into their current savings, if they sell first and purchase later.

On the flip side, had they purchased first, not only do they not have the estimated $702,000 of equity on hand, they would have to fork out 25% in cash for their downpayment for their purchase due to current outstanding loan, ABSD of 20% on their second property.

Putting it in numbers, assuming they are purchasing a $2,500,000 property:

• 25% downpayment in cash = $625,000
• 20% ABSD in cash = $500,000
• Buyer's Stamp Duty in cash = $94,600

Initial outlay for purchasing first is already $1,219,600.

With the numbers laid out, this usually gives upgraders a clearer idea the sequence of their journey.

The decision, as a path