"Subject to finance" period expired (WA)

[cletus]

Ok, question for you:

I put in an offer to purchase a property that was accepted. This is in WA.

The period for finance approval has expired. Now I've notified the vendor (through the agent) that finance has not been approved but I'm still interested if alternative finance can be approved.

Now this wasn't in writing (notifying the vendor that is). What exactly is my position here? Because I've read something to say that the buyer has to notify the vendor in writing or the contract automatically goes unconditional.

 

[Beef_Hooked]

Rule No: 1.
Put it in writing.

Rule No: 2.
Keep a copy yourself.

Rule No: 3.
Er... there is no rule No: 3

Rule No: 4
Put it in writing.

Cheers,
Beef.

 

[cletus]

Just found this:

http://www.reba.wa.gov.au/DataStore...ying a home through an agent October 2007.pdf

All it says is that if finance isn't approved the contract may be terminated.

Now, the O&A specified a lender (CBA) and a LVR of 80% (which is no longer possible due to a low valuation on my first property). I advised the agent (over the phone) a day before the deadline that CBA had declined my finance request although I've received no written notice of this. I've merely been advised by one of their personal lenders (via email).

 

[Perp]

I suspect you now have an unconditional, binding contract, and you'd best get finance. Do you have a solicitor? Or at least conveyancer?

 

[cletus]

I have a settlement agent.

 

[Alex_1]

I could be wrong, but my understanding is that, if you haven't notified the sellers in writing that you are terminating the contract based on your inability to obtain finance, then the contract would become unconditional (or at least no longer subject to finance) when the subject-to-finance period ends.

If the subject-to-finance period is about to end and you haven't been able to get finance organised, then you could ask the sellers to formally (in writing) agree to an extension of the subject-to-finance period to give you a bit more time.

If the subject-to-finance period has already ended, then you need to get some urgent advice from your solicitor/conveyancer/settlement agent to clarify if your contract is now unconditional or not.

 

[Peter_Tersteeg]

I agree with Alex. The normal procedure in most states is to have your solicitor notify the vendor in writing and apply for an extension.

If you just tell them it's not approved, nothing has really changed, you have to tell them what you want in order to get something. Your solicitor or conveyancer should have handled this.

 

[Rixter]

Cletus, what does your settlement agent tell you?

 

[Alex_1]

Another thing I forgot to mention in my earlier reply...

If the subject-to-finance period ends and you haven't asked for (and received) from the seller a formal extension, then it's possible the seller could have the right to terminate the contract on the basis that you haven't notified them that you have obtained your finance within the required period.

Best thing to do is ask the seller for a formal extension of the subject-to-finance period before it ends, if you need more time. If this is refused, then you could always terminate the contract, then make another identical offer later when you've got your finance sorted out.

This might save you the nasty experience of having the contract go unconditional when you haven't got finance yet.

 

[boomtown]

What does your contract say?