Settlement extension

[Rebdot]

We are building a house through Metricon, when signing up we were advised that we had to purchase the block of land before we could move any further. We purchased our land, the contract had a clause that required that finance go unconditional on the 1st of June, however an extension was sought as we had not signed the contracts with Metricon.
I got stuck into Metricon and had the contracts ready, signed and sent off to Bankwest on the 7th.
Today we receive a phone call from the Realestate advising us that our extension runs out tomorrow and the vendor may not want to grant another extension. We were asked to contact our broker to see where were at, she tells us that our valuation has been ordered and will be done this week.

We contacted our solicitor and she said she would apply for another extension but they could cancel the entire contract if they dont grant it!

My question is- Does this actually happen? Do vendors cancel they contract often (rather than agreeing to an extension)?

I am really frightened that we will loose our land and have to start from scratch again, not to mention all of the money lost.

 

[alexlee]

We contacted our solicitor and she said she would apply for another extension but they could cancel the entire contract if they dont grant it!

My question is- Does this actually happen? Do vendors cancel they contract often (rather than agreeing to an extension)?

I am really frightened that we will loose our land and have to start from scratch again, not to mention all of the money lost.

And what will you lose if you can't get finance?

Ask for the extension. If the vendor refuses, you have to make a choice. Are you willing to take the chance that you can't get finance? If not, cancel the contract and start from scratch.

There shouldn't be any fear in any of this. It's a decision map. If this happens, you do this, if not, you do that.

 

[Terry_w]

Yes it happens, especially if they think they can sell it for more.

You have 2 options:
1. Ask them to extend, which they may refuse, or
2. take a punt

2 is very risky!

 

[Marty McDonald]

It could be risky or it may not be depending on your circumstances.

Don't forget the thousands of punters who bid at auction each weekend without formal finance approval.

If it's below 70% LVR, you have sound credit hsitory ($50 to check) and the income / debt ratio is also sound it may not be very risky at all. Of course every lawyer or banker / broker you talk to will have to cover their **** by saying it is risky and fair enough too but the reality is it may not be risky.

Here is my cover my ****...if you are in any doubt about getting finance and they won't extend you should pull out.

 

[Peter_Tersteeg]

You should always have a finance clause and work with it to cover your backside.

Having said that, I see it all the time that everything has fallen into place, but the bank hasn't completed the processing (and some banks are definitely taking their sweet time at the moment).

It may or may not be risky to proceed without a finance clause. If the only outstanding item to successful finance is the valuation, how confident are you of the purchase price?

 

[Bigtone]

It may or may not be risky to proceed without a finance clause. If the only outstanding item to successful finance is the valuation, how confident are you of the purchase price?

Block of land with a metricon home going on it?

Probably in a new estate, pretty big risk imo.

In reality it is probably the agent playing normal games, tell him to contact your convenyancer to discuss any issues regarding the contract going forward.