The order of sale proceeds
The order of payment from sale proceeds is rigid and well-established:
- Sale price received — paid by buyer at completion via the buyer's lawyer.
- Deduct seller costs — Seller's Stamp Duty (if within SSD window), agent commission, legal fees, outstanding property tax / utilities prorated.
- Pay outstanding mortgage — to the bank (for bank loans) or HDB (for HDB Concessionary loans). Balance is the principal + any accrued interest on the loan.
- CPF refund — principal CPF used + accrued interest is paid into the seller's CPF Ordinary Account.
- Cash to seller — the residual after all of the above is paid out as cash to the seller.
Worked example — positive sale
Sale price: $1,800,000. SSD: $0 (held > 3 years). Agent commission: 2% = $36,000. Legal fees: $2,500. Outstanding mortgage: $500,000. CPF principal used: $300,000. AI: $84,000.
| Item | Amount | Running balance |
|---|---|---|
| Sale price | $1,800,000 | $1,800,000 |
| Less SSD | $0 | $1,800,000 |
| Less agent commission (2%) | −$36,000 | $1,764,000 |
| Less legal fees | −$2,500 | $1,761,500 |
| Less outstanding mortgage | −$500,000 | $1,261,500 |
| Less CPF refund (P + AI) | −$384,000 | $877,500 → CASH TO SELLER |
Seller receives $877,500 cash + $384,000 in OA (CPF refund). Total benefit: $1,261,500.
Worked example — negative sale
Sale price: $900,000 (property depreciated). No SSD. Same expenses. Outstanding mortgage: $400,000. CPF principal used: $300,000. AI: $84,000.
| Item | Amount | Running balance |
|---|---|---|
| Sale price | $900,000 | $900,000 |
| Less agent + legal | −$20,500 | $879,500 |
| Less outstanding mortgage | −$400,000 | $479,500 |
| CPF refund needed | $384,000 | $95,500 → CASH TO SELLER |
Seller receives $95,500 cash + $384,000 in OA. If the CPF refund needed exceeded the residual after mortgage ($479,500), the shortfall would be waived if the seller is buying a replacement home — the available CPF would be applied directly.
Why your cash from sale feels smaller than expected
Many sellers are surprised at how little cash they receive at completion. The reason is usually invisible: the CPF refund. A seller who bought a home 15 years ago using $300K of CPF will see ~$384K of the sale proceeds vanish into the CPF refund before any cash is paid out. The money isn't lost — it's back in your CPF OA earning 2.5% — but it isn't cash you can spend.
This is why financial planning for sale should always start with: (1) outstanding mortgage; (2) CPF principal + AI; (3) only then estimate cash.