Will you buy a property if the bank's evaluation comes under the purchase price ??

[Perp]

As I understand it (and everyone's contract is different), you should be putting "Subject to finance satisfactory to buyer" or something like that, and then you don't have to be unable to get finance to get out, you just need to be genuinely dissatisfied with any finance you're able to get, which could be caused by a low valuation.

Well, yes, but you still have to be dissatisfied with the impact of the valuation on finance, not just the valuation. If the valuation causes a higher LVR and thus interest rate, then you could cancel because you're dissatisfied with the interest rate.

But in the scenario mentioned - not too different from xQuiz8's - if you only apply for 60%, get approved, and then find out the valuation was low, you'd have no grounds to cancel. You're not even entitled to know what the valuation is; the only thing relevant to the finance clause are the conditions relating to the offering of finance.

I know this form personal experience; when I was a victim of professional negligence during conveyancing, I wanted to sue, arguing that I could have withdrawn on the basis of my finance clause had my conveyancing been performed competently. It was explained to me that I couldn't, even though if my conveyancing had been done accurately I would NOT have obtained finance. The finance clause is interpreted very narrowly by the Courts.

 

[Dazz]

I've included few clauses in my contract :

* subject to lenders valuation being accepted by purchaser on or before date.
* subject to obtaining finance on or before date

My initial clause was "Subject to lenders valuation not coming in lower than purchase price". However, the agent reckon that this is absurd

.....all of this legal nonsense being generated by these ever so tricky worded "get out" clauses.


If ya don't know what the property is really worth, and ya aren't sure about what your top dollar offer is.....then sit down and relax until you do.


Any contract savvy Vendor in their right mind would have screwed up your offer and either thrown it at you or just simply tossed it straight into the bin.


As a Vendor, if my Agent ever presented me with an Offer like that with those Mickey Mouse clauses on them....they'd be run off.


These childish subject to clauses that are taught in property seminars to potential buyers to 'cover themselves' and offer multiple 'out' clauses sound absolutely fabbo when you're in the middle of a Ra-Ra back slapping convention, but in the real world when you are contractually up against real people who are solely looking after their own interests.....it doesn't really cut the mustard......or should I say it shouldn't.

 

[willair]

Hi Guys,

I'm in need of help urgently..

I have put in an offer to the vendor that has been accepted.
I'm just paranoid that if the bank's evaluation comes under my purchase price
by say..$100k.. would it be advisable for me to still buy if thats the case ?

I understand that this will affect my LVR. But i've also heard that the banks
are usually conservative when it comes to evaluation of a property prior to
processing the loan. I have a big downpayment and I am borrowing about 70%
of the property.

What do you guys advice ? Please kindly respond to my plea !

It may well be a bit late,if the vendor has singed your contract and depending how you set the contract up and if you have any walkabout clauses then a contract is a contract no in betweens,just one ? what is the sale price,and did you have the funds in place prior to putting your name on the contract which is binding on the vendor 100%..imho..
willair..
Even Sonny Bill has a problem understanding the way contracts works
in the real world..