Bank agreed to finance but

[PI141]

Broker sent letter to solicitor on his letter head - not the banks. Given that it was like pulling teeth from the bank to get the finance I am not comfortable going forward without a letter from the bank themselves - Non conditional was supposed to be last Monday but we are still waiting on this letter and the deal is about to fall over soon if I don't have finance!

Is it normal practice to rely on Broker letter head for finance approval??

 

[Qlds007]

Most Brokers worth their salt would accompany the fax header with a copy of the lenders approval fax.

 

[PI141]

Yeh thats it! There is no copy of the letter from the bank they just called him last night to say they approve - he still does not have the letter so in my mind they can still change theirs.

 

[Perp]

Yeh thats it! There is no copy of the letter from the bank they just called him last night to say they approve - he still does not have the letter so in my mind they can still change theirs.

No, they can't. The finance clause is solely for the purchaser's protection, not the seller's. The seller has no option to pull out for fear that you can't finance; it's exclusively an out for the purchaser. The default position is that if you don't do anything by the time set for expiry of the finance clause, that the contract becomes binding.

The default position is that the contract becomes unconditional; the time is a deadline for the purchaser (only) to notify their intention to pull out of the contract due to lack of finance. If you're confident that you'll obtain finance, then notify that you're happy to go unconditional. The vendor doesn't get a say in it!

It's actually if you're declined for finance, and wanting to exercise your right to cancel the contract, that verification of the lender's position is important. Nothing is needed if finance is approved.

 

[Peter_Tersteeg]

Most Brokers worth their salt would accompany the fax header with a copy of the lenders approval fax.

Also any lender worth their salt would be able to send the broker a copy of the unconditional with a simple phone call by the broker. There's a good chance the finance hasn't actually been approved yet, but the broker doesn't want to disappoint you.

 

[PI141]

Thanks we got the letter today by fax - it was apporved over the phone to the Broker who inturn sent a fax to my Solicitor without the follow up fax from the Bank. The bank was up against it with half the staff on holidays so nothing was getting done - note to self dont finance in Dec !