All Topics / General Property / signing contract “SUBJECT TO FINANCE”

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  • Profile photo of wannabe2wannabe2
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    @wannabe2
    Join Date: 2003
    Post Count: 65

    hi,can anyone give me some advice to this question please.

    we are due to sign a contract on a property on thursday for a house in sydney and have been told that our deposit could be at risk if we are unable to proceed due to lack of finance.i have been told that signing the contract “subject to finance being arranged” doesn’t work in NSW and we could lose the deposit if a problem arises.any help please??

    Profile photo of Mortgage HunterMortgage Hunter
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    @mortgage-hunter
    Join Date: 2003
    Post Count: 3,781

    Whoever told you that is an idiot. If it is an agent then he is pressuring you and you should complain about him.

    Ask your solicitor to amend the cotract with a suitable finance clause.

    You will be fine then to pull out, stating finance was an issue, and your deposit will be returned.

    He is probably telling you the deposit has to be 10% too?

    It can be whatever is acceptable to the vendor and yourself. $10 is fine. Although most solicitors will insist on 10% that way if you do a runner they can still recover theirs and the agents fees [blush2]

    Cheers,

    Simon Macks
    Residential and Commercial Finance Broker
    ***NODOC @ 7.15% to 70% LVR***
    [email protected]
    0425 228 985

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
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    And also don’t get pressured into being told that if finance is approved you have to proceed. It is finance on terms acceptable to you the purchaser.

    So if some cowboy tells you they can arrange it through M Mouse Home Loans at 16% you dont have to take it.

    Richard Taylor
    Residential & Commercial Finance Broker
    **Lodoc Commercial loans from 7.39%**
    Licensed Financial Planner
    Ph: 07 3720 1888
    [email protected]

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
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    Profile photo of wannabe2wannabe2
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    @wannabe2
    Join Date: 2003
    Post Count: 65

    thanks for your help,much appreciated

    Profile photo of Mortgage HunterMortgage Hunter
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    @mortgage-hunter
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    Post Count: 3,781
    Originally posted by Qlds007:

    And also don’t get pressured into being told that if finance is approved you have to proceed. It is finance on terms acceptable to you the purchaser.

    As usual Richard is spot on and ably filling in my gaps…

    Most solicitors will write the clause in such a way that it reads something like:

    “Conditional upon finance approval satisfactory to the purchaser.”

    This stops an unscrupulous vendor and agent forcing you to accept something like vendor finance at 20% rates etc.

    I have never heard of this actually happening to someone I know but for the sake of a few words it is better to be safe than sorry.

    Cheers,

    Simon Macks
    Residential and Commercial Finance Broker
    ***NODOC @ 7.15% to 70% LVR***
    [email protected]
    0425 228 985

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Profile photo of Peter TPeter T
    Member
    @peter-t
    Join Date: 2005
    Post Count: 4

    In your finance clause, specify the amount and the lender.

    “Subject to finance for $300,000 from Westpac”.

    Make sure you specify a due date for the fiance (at least 2 weeks, preferably 3 if they’ll accept it). If you don’t have finace by the due date, or you want to pull out, you much communicate this prior to the cut off.

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