How often have you had to ask for an extension to the finance date? (non-cash buyers)

[jerrybee]

I have literally never been able to get financing on time, and have had to ask for an extension for every property I've purchased. Is it just me or...is this normal for non-cash buyers? I can usually get my side of things in order in record time (statements, payslips, rental appraisals etc), but then the valuation generally chews up a few days to order, perform and lodge with the bank, then the broker takes a few more days to pull the application together, then there's always a surprise or two where the bank asks for more info that neither of us anticipated and it takes days to turn around. The 2-3 weeks evaporates really quickly even when things are going somewhat smoothly.

So is it just me or are finance date extensions a very common thing? Every time I buy, my anxiety levels shoot through the roof. This is not good for my health!

 

[neK]

I've never had to ask for an extension. Maybe its time to get a new broker?

 

[Shahin_Afarin]

No its not common unless of course there is an issue beyond anyone's control. Generally the broker or banker can foresee certain issues and request upfront an extended settlement.

Common example is customers who are overseas and the purchase is in QLD in which they require the mortgage docs witnessed by a consular or an Australian solicitor (both of which is rather difficult to locate whilst overseas).

Another example may be the lender itself but again it should be made clear upfront if the lender is taking ages to turn things around.

What are the sort of issues you experienced?

 

[knightm]

Of my last 5 client deals 2 had finance delays, and it feels like around 30-40% might be an average if I look back.

Both of the recent ones were AMP related and not the fault of the buyer (as far as I could see). Did I mention it is raining out and slow as a wet weekend here?

Managing your own anxiety, and also that of the agent, the seller, and all other parties is important to keep a deal running smoothly, both of the ones above could have fallen over if we hadn't stayed on top of everyone to keep it calm and moving forward.

It becomes a personal growth exercise too I reckon, if you want to play with borrowed money and big numbers eventually you have to get used to the stuff. I have just been reading a few updates on mining companies refinancing efforts and what they go through to stay afloat in a tough time puts me to shame.

 

[Perp]

Like jerrybee, I think nearly every transaction I've ever been involved in - as buyer or seller - has had a party ask for an extension on finance.

In nearly every instance, it's because the broker/bank - presumably in good faith - says "yeah, two weeks is enough", and it turns out that it's not.

There's nearly always some hiccup - lender experiencing "unusually high volume" (do they ever experience normal or low volume? ), mortgage insurer has extra requirements over lender, valuation comes in low and has to be adjusted or a new valuation ordered, etc.

 

[CHAOS]

We had a buyer request 3 extensions and they were finally approved ten days before settlement on a 60 day contract. On the third request we asked for proof.

 

[D.T.]

Never had a finance extension as I user a broker who has his **** together.

My last settlement delay was non finance related. The state govt was the vendor and they decided they wanted me to sign some document on the 89th day of a 90 day settlement and return the original interstate.

 

[westminster]

I think this is where people should stop putting 21 days on contracts and go for 28 days for finance.

I have had to extend on one project and I had to extend about 4 times on that one. It was terrible. Had to fire broker, get new broker, start finance all over again, run into difficulties and finally a yes.

 

[jerrybee]

I think this is where people should stop putting 21 days on contracts and go for 28 days for finance.

Yes but all other things being equal, sellers will almost always favor offers with shorter finance periods. It's quite ridiculous because I think even the agents know that all non-cash offers are always subject to the same unpredictability, but they will still advise you reign it in to have a shot at being accepted. So we know more is better / realistic, agents know this too, but sellers are generally delusional about it. So I just play the game now and tell them what they want to hear to secure the contract and then I'll keep extending when the I haven't heard from the bank in time.

 

[wobbycarly]

*snip*The 2-3 weeks evaporates really quickly even when things are going somewhat smoothly.
*snip*

Where are you buying? In Victoria, 45-60 day settlements are typical, which generally provides plenty of time.

 

[INVSTOR]

One of the banks I use say they need 3 weeks and always seem to come in that time but have found Perth agents prefer you to write 4 weeks so I usually go with that and word it as 'on or before' 4 weeks.

 

[CHAOS]

The settlement period is usually fine. It is when the buyer signs subject to a finance clause and keeps extending the finance date. Basically the purchaser has a get out of jail card for as long as they like because the contract is not unconditional.