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Writer's pictureWillis Teo

Cash Over Valuation

Updated: Dec 1, 2021


Picture credits: Mortgagemaster

If you’ve purchased property or have any real estate friends, you’ve probably seen this on their IG stories and posts. “Managed to close this property for my buyers at 0 COV, happy buyer happy me ... ” and more. With the number of abbreviations floating around in our current generation, you probably just let it fly by. One day, when you’re looking to purchase your first property, BOOM; COV appears.


COV is basically short-formed for Cash Over Valuation. It means exactly what it says it means: paying cash over valuation. Everytime you want to purchase a resale HDB flat, HDB has to come in and do a valuation on that flat. COV then happens when you’re buying a resale flat above HDB’s valuation.


“Siao, like that of course I won’t pay above valuation. I just get the valuation then pay what is valued for the flat, intelligent points +100 for me”. Unfortunately, this is not how it works because… there are no answers for some questions in this world.


After coming to a consensus with the seller of the resale flat and agreeing on the sale price, this price is locked down once you guys exercise your Option to Purchase. Only then does the valuer for HDB come in and give you their Valuation. Say a resale flat is valued at $500,000 by HDB but you and the seller have already agreed on a purchase price of $520,000, then the COV is $20,000.


Nobody can know for sure what the valuation of a place is; you can only pray and guess. Of course, it’s your agent’s job to negotiate and come to a consensus with the seller on a price based on market trends, the seller’s asking price and naturally, your budget.


Do note that COV is exclusive only for HDB resale flats.


Now that we’re done with what COV is all about, here are the few burning questions that everyone who wants to avoid COV are going to have:

  1. Can I use my loan/CPF monies to pay for Cash over Valuation

    • Answer: Nope.

  2. How can I avoid Cash over Valuation?

    • As Agent Smith says to Neo in The Matrix: It’s inevitable. As mentioned, you can’t since buyers and sellers have to agree on the purchase price first.

  3. Is there no way to minimise Cash over Valuation then? How do some agents get 0 COV?

    • While there isn’t any way to 100% guess and avoid COV, having a strong grasp of market trends and transactions in your area works strongly towards coming up with a good offer to minimize the amount of COV you as a buyer need to pay for your dream home. Then again, that’s the job of your agent :)

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