NSW contract of sale.

[Wirra436]

Quick Question:

Offer was accepted.
I have given 5% deposit for which was accepted.

However Contract exchange is in Limbo as vendor wants un-conditional approval before exchange of contracts ?

However, there is a finance clause (14 Days) in the contract aswell as B&P.

so why have they asked for un-conditional before exchange of contracts?
This will take the bank a week or so and hold up settlement.

extra protection? Dont understand.

 

[Rixter]

so why have they asked for un-conditional before exchange of contracts?

Your solicitor needs to ask the vendors solicitor why. Any answers here on the forum are just speculative. Have you asked the vendor?

 

[Wirra436]

Hey Rixter,

Have asked the question to my solicitor, Im awaiting for an explanation from the Vendor side.

Never heard this happen before hence why I asked, time will tell.

 

[Peter_Tersteeg]

Are you purchasing in Victoria?

In NSW you 'exchange' contracts after the finance is approved, in most other states everyone signs when the offer is accepted and the contract is exchanged.

Outside of NSW you can't get unconditional finance approval until the vendor signs the contact.

 

[Wirra436]

Purchase NSW.

ok, so you get un-conditinal from the bank before exchange of contracts?

So why a finance clause in the contract?
Also always thought the bank would need to do a valuation before anything became un-conditional.

Funny how so different from state to state.

 

[Propertunity]

However, there is a finance clause (14 Days) in the contract aswell as B&P.

If there is, it certainly was not put there by the vendor's solicitor. It would have been added by yours

This is not really a good way of buying property in NSW, see this thread:
http://somersoft.com/forums/showpost.php?p=630726&postcount=30

 

[BMW]

Quick Question:

Offer was accepted.
I have given 5% deposit for which was accepted.

However Contract exchange is in Limbo as vendor wants un-conditional approval before exchange of contracts ?

However, there is a finance clause (14 Days) in the contract aswell as B&P.

so why have they asked for un-conditional before exchange of contracts?
This will take the bank a week or so and hold up settlement.

extra protection? Dont understand.

In my limited experience, not many vendors will accept a conditional contract. it's all verbal and hand shakes until you have everything in order. ie finance, building and pest. perhaps you can at lest get the acceptance in writing, leaves you open to being gazumpt though.
banks should only need the front page of the contracts

 

[Scott No Mates]

Sounds like the vendor wants to go unconditional upon exchange ie sign a S 66W and have you complete all your dd prior to exchange. So get your ducks lined up as the vendor is giving you the time to complete your work ie bank, b&p etc.

 

[Terry_w]

You can have contracts subject to finance in NSW. However it is not so common. What usually happens is exchange with a cooling off period - sometimes extended from 5 to 10 days.

Vendor probably doesn't want to exchange subject to anything as you could come back in 14 days and pull out. They will have then wasted 2 weeks which they could have been seeking more potential purchasers.

 

[Aaron_C]

In NSW you have two options. Option 1 is to sign a contract, get finance approval, then exchange when that's done (usually with a section 66W signed) meaning it is unconditional. Option 2 is to exchange, and get finance within the 5-10 day cooling off period. Option 1 is usually better as 10 days can sometimes not be enough depending on the lender/valuer etc.

 

[Wirra436]

Thanks for all the feedback people

Just different states, different contracts is all, something I will have to learn.

B&P was completed and I was happy with, Just wait on Finance and go from there.

Cheers