COV stands for overvaluation of cash. It refers to the difference that may occur between the real price agreed by the buyer and the seller and the current appraisal price of the apartment. The difference is expected to occur in the HDB resale market and the private housing market. The government’s objective is to correct the negotiation of prices based on the overvaluation of cash and to help monitor or regulate the price based on the prices given by the private housing market. This will greatly reshape the practices and way Singaporeans buy and sell their HDB flats. This means a better monitored and stabilized resale market in Singapore.

HDB will publish resale transaction prices daily so that buyers and sellers can negotiate based on the most recent price published by HDB. The HDB can meet the buyers’ request for valuation. However, the request must come from the buyer himself or his appointed seller. The request would be accepted only after HDB has given the seller an OTP or purchase option. The new process flow or procedure would be as follows

1. Sellers and buyers should look at the current or most recent HDB transaction price

2. Sellers and buyers can start trading based on the last published resale price

3. The vendor asks the HDB for an OTP

4. The HDB will give the seller an OTP

5. The buyer or his seller to request a valuation from HDB

6. The HDB to perform the assessment

7. Buyers can obtain and secure a valid HDB loan and bank offer letter

8. Buyers can exercise the OTP and close the deal

Buyers have 14 days to exercise the OTP, but can be extended up to 21 days to allow more time for valuation. Real estate experts gave a thumbs up to stop the release of the VOC data. With the current downward trend, the complete abolition of the publication of VOC data would have little effect on the outcome of the trade. The move to permanently abolish VOC from the public housing sales process should have been made by the government long ago. With cash overvaluation, since it must be paid in cash above the HDB valuation, it can significantly affect the price and affordability of the resale condo. Before seeking an official valuation, the buyer and seller must first agree on a price. The price must align correctly with the price set by the government. With the new rule, buyers can get a home loan without having to face cash premiums above the price set by the sellers. With the present process, the buyer and seller cannot even collude to overprice the price in order to obtain a higher loan from the bank. This prevents the seller and the buyer from overdeclaring the agreed price.