Contract of Sale, Subject to Finance clause

Hi,

I've done a bit of a search and couldn't find anything directly explaining this..

I'm in the process of buying a $770k apartment in inner Sydney. I've had some complications with financing as discussed here: http://www.somersoft.com/forums/showthread.php?t=55471

Also, we originally signed a contract of sale with a 10-day cooling off, but it was never countersigned, which we subsequently found out was because the vendor had receivers appointed.. That's another story, but I confirmed with the receivers today that everything is to proceed as normal.

So as I'm a first home buyer, I urgently need to exchange with a cooling off period before October 1 to avoid losing $3500 of FHOG benefits.

However, my finance still hasn't come through and if you read the details of my finance (GF has a default of a David Jones store card), I can't afford to risk exchanging unconditionally without some subject to satisfactory finance clause.

I was under the impression that subject to finance clauses, although somewhat undesirable to vendors, are common practice. My conveyancer begs to differ though and says he would be shocked if they accepted those terms, and that the consumer credit code specifies that you must enter into the contract with finance already confirmed.

Is this the case?
Should I just wear the $3500 loss of FHOG and not exchange until I have finance approved?
There is VERY little chance of being gazumped. Firstly because the property never hit the market. I am the current tenant and I made an offer to the REA before they did their marketing. Secondly because it's now in the hands of receivers and they're motivated to push the current sale through and not spend money and time on marketing and renovation. (the original marketing plan was to first enclose a second bedroom to match a similar sale in the building).
 
i am also looking to buy in sydeny. agents tell me to bugger off when i tell them i want a "subject to finance" clause...their argument is that the contract won't mean anything to the vendor as i can pull out fairly easily, putting the vendor at risk. I think your conveyancer is right...especially we are in a rising market and vendors have plenty of buyers to pick from. Why not give up the 3.5k FHOG and exchange only after you get the unconditional approval?
 
When I bought my PPoR late last year the Contract Note had a subject to finance clause already in it, and I had the REA also write in that the finance had to be of my choice.

You should definitely make sure that the contract you sign is subject to finance of your choice. Don't let the conveyancer bully you into signing a contract without that clause. At the end of they day they are all looking after their own pocket and you should do the same.
 
You should definitely make sure that the contract you sign is subject to finance of your choice. Don't let the conveyancer bully you into signing a contract without that clause. At the end of they day they are all looking after their own pocket and you should do the same.

I agree. I had a real estate agent last year try to 'bully' me out of the subject to finance clause, politely telling me the vendors won't accept it. It was a property which had just gone on the market and the market in the area was fairly hot. I was extremely confident of getting finance and put this to the agent but also said I wouldn't do an offer without the finance clause just in case anything unforseen happened to protect myself. He ended up agreeing to a five day finance clause, four days by the time it was accepted (which was fine, if finance wasn't approved by then, I was off the hook, or I could simply ask the vendor for an extension). I got onto my bank immediately and had my official finance appoval within 2 days (was dealing with an excellent home loan manager at the time, wish I could say the same for the second one I used) so all worked out. I was desperate for this property, being my PPOR, but I still would never have signed up without the finance clause. I know people do it all the time, but just seems risky to me, and if you have any doubts then cover yourself by including it.
 
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