Subject To Finance Days Running Out

[bronwynt]

Hi there,

I am in a bit of a dilemma. My offer on a new IP was accepted and I put down subject to finance 14 days on the contract as I did not have the approval from my bank at that stage.

My 14 days will be up on Friday and tomorrow I still need to organise for a valuer to get access to my investment property and then get the info to the bank via my mortgage broker. I am worried that the bank approval may drag on past the 14 days.

What happens if I do not have the bank approval by the set time? Can I get an extension or is the property straight back on the market?

Bronwyn.

 

[Rolf Latham]

Hiya

Get your conveyancer to approach the other side before the 11th hour , and ask for a reasonable weeks extension to the finance period.

An extra week is not unusual these days, while new loan applications are down, the lenders have also cut processing staff.

ta
rolf

 

[bronwynt]

Hi Rolf,

Thanks for the reply, my mortgage broker did mention to me that he could write a letter to the RE, I just wasn't sure what would come from it.

So I guess if he is able to write me the letter, then I would not need to get my conveyancer involved?

Bronwyn.

 

[Rolf Latham]

Hiya Bron

The correct line would be for your conveyancer to approach the vendors solicitor

Both your broker and the REA are AGENTS in this game, and your legal and most direct representation MOST times is via the solicitors.

The note your MB writes can be used bu your conveyancer to strengthen your case


ta
rolf

 

[lizzie]

i'd also ensure that the settlement date was not delayed, even tho you are asking for extra time for finance.

try not to push the settlement date out by the extra week as well - people have often already allocated their proceeds from a sale (as i do), and an extra week could mean all sorts of hassles for them - which does not make for friendly approval.

 

[Rolf Latham]

Hiya Lizzie

In QLd you should always ask to extend the settlement period with the finance clause if settlement is within 3 weeks or less away from finance approval.

In Qld we have "time is of the essence" contracts.

This means if you dont settle on the agreed day, the contract can be trashed, the deposit forfeited, and the property resold, and the buyer can be chased for losses............

So in that regard, while its nice to be compliant with the seller, it can get messy.

ta
rolf

 

[bronwynt]

Thanks for the advice, my conveyancer is now going to ask for an extension of 7 days.

I will not be changing the 90 day settlement date as the vendors are moving into their new house then and it works out best for them.

I found out by the valuer this morning that a letter sent to the tenants a week ago was ignored and so were many phone calls. Now the valuer is going to issue them with a 24 hour notice to gain access, regardless of them being there or not.

I don't know why she had to wait this long before taking these steps.

Bronwyn.