Offered & accepted $390K, clauses written by real estate agent before sourcing finance
- They weren't sure on which bank they were going through at that stage so r/e agent said it didn't matter and wrote WBC
Kath,
As Terryw noted well, this is a classic trap for the newbie in WA, where the sales rep whips out the 2 page contract pro-forma, clicks their pen and says "OK then folks, what do you want me to write on the Contract."
That's when you step in and say "Whoa back there pal, this is the Buyer's offer, so howza about the Buyer write it."
The notion of the Seller's rep writing an offer back to their Seller is just farcical. The reps, when confronted with it, just don't get it.
I would find it extremely strange, almost unheard of in fact, for a normal residential sale to have a finance clause that wasn't the standard clause # 1 on the REIWA Contract of Sale proforma.
I just happen to have a copy of one in front of me...
The WA Finance Clause has three data boxes ;
Lender : < Insert specific Lender's name >
Latest Time : 4pm on : < Insert Date >
Amount of Loan : < Insert Maximum Borrowings sought >
Now to the relevant wording ;
1.1 (a) The Buyer must ;
(1) immediately after the Contract date make an application for Finance Approval to the Lender.
(2) use all best endeavours in good faith to obtain Finance Approval
1.1 (b) If the Buyer does not comply with clause 1.1 (a) then the Contract will not come to an end and the Buyer may not terminate the Contract.
.
.
.
yada yada yada
.
.
.
1.6 Buyer must keep Seller informed - Evidence
(a) If requested in writing by the Seller or Seller's Agent the Buyer must advise the Seller or Seller's Agent of ;
(1) the progress of the Finance Application
(2) provide evidence in writing of the making of a Finance Application, in accordance with 1.1 (a) and of any loan offer made, or any rejection, and
(3) if applicable the reasons for the Buyer not accepting any loan offer
(b) If the Buyer does not comply with the request after 2 business days then the Buyer authorises the Seller or Sellers Agent to obtain from the Lender the information referred to in 1.6 (a)
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My interpretation Kath, is that if Westpac have been put in the lender's Box, then they have failed to comply with 1.1 (a) (1), and they have failed 1.6 (a) (2) and as such.....
....the over-riding clause 1.1 (b) kicks in, whereby they are not entitled to end the Contract.
The CBA rejection in writing would be sufficient to end the Contract if the CBA was written in the Lender Box....but your brother and SIL allowed the agent to write Westpac.....so they are up **** creek.
Lesson learnt - never let the Agent write your offer up. Do it yourself - when they aren't there so you've got plenty of time to think and talk it thru !!!