PoppetUK

Just wondering if someone wanted to pull out of a house sale just before financial approval (post the lender having a valuation on the property) is it straight forward with them saying things have changed?

Rather frustrating but it looks like the process starts again.

Thanks in advance.

Safin

I understood until finance approved AND accepted by the borrower they can pull out of purchase and state the finance terms were unacceptable to them. But I am no expert - this is the way it was explained to us by real estate agent.

PoppetUK

That kind of makes sense. Wish it meant more than it does and the buyer hadn't wasted our time. Cheers poppet

northernbird

I thought there was no cooling off period in WA. I thought once the contract had been signed the only way they could get out of it is if one of the conditions of the contract, i.e. Finance, wasn't met.

http://www.realestate.com.au/cgi-bin...&cat=&t=as-fin

ABCDiamond

WA does not have a cooling off period, where you can just change your mind with x days.

However, conditions can still be put in the contract of sale to say such things as "conditional upon suitable finance being available"

I like to include the word "suitable", as I always wonder what would happen if I used that clause to get out of a purchase, and the seller said "I will lend you the money. at 15% pa".

gobbyjock

We had pre approval on a mortgage but we then had loads of hassle as the bank decided it didn`t like hubby being on 6 months probation with his work (he only had a month of it left and they knew about it when we applied). We had to get the bank to confirm to the sellers real estate agent that finance had not been approved so we could get our deposit back.

shorrock

Make sure that the contract is iron tight. If the buyer wants conditions such as suitable finance, strike it out and any other clauses you think may cause an issue. Put a clause in that if any of the clauses are used then you'd get some $$$ to put the house back on the market. Then nego with the buyer.

Buying and selling in Australia is way easier than some other countries, where a buyer can back out at the very last moment.

shorrock

I've found pre approval to be only useful for 1 things. Identifying how much a bank could lend you. The approval is on that value not on the fact they will lend you money. I once had a bank "pre-approve" me for a home loan that was more than my before tax take home pay. I was like WTF, how can anybody do that.

Safin

its such a standard clause you aren't likely to get many buyers agree to a contract without it - what if they really can't get the $$$.

Cripes its much better than the uk where buyers pull out right up to the last minute. Here the vendor is safe after its gone unconditional (normally 14 days) which happens much sooner than exchange does (weeks or months after offer accepted)

Most agents round here seem to keep the listing open until its gone unconditional just in case

Good luck poppetUK

Siren & Brian

No they cant with out some costs to you.

They could though get a letter from the bank saying finance wasnt approved.

In WA the O & A is a very good contract and unless there have been clauses written into it, then buyers can not simply walk away with out costs.

gobbyjock

There was a load of stuff ups both with the bank and mortgage advisor, totally hacked us off and wasted our time. We ended up waiting a couple of months and going through our own bank - totally different experience - should have done that to begin with but hey ho!