Offer subject to finance

Hi

I have a friend who has just put an offer on a property "subject to finance"

He now wants to get out of the contract (After approval by the sellers) and just got his broker to write him a letter stating changes in his financial affairs.

I am just curious about how this can be done?
Does that mean there is always a way out for the buyers?

Cheers

 

As a seller, I'd want to see a decline letter from a bank to show that they've tried and failed to get finance. I'm not certain the letter from the broker would be accepted, as it doesn't really show that they've tried and been declined. Depends what their finance clause looks like too.

 

A few years ago on the day I was expecting his loan to be approved, a client rang me to say he was worried he was about to be made redundant and expected he wouldn't be able to afford the house.

I called the bank, let them know the circumstances and they sent me a formal rejection letter a few minutes later. The contract was terminated on the finance clause.

Easy enough to get finance rejected, but you might have trouble going back to that lender when you purchase the next property.

It turns out he wasn't made redundant.

 

All that effort for no return . Did you write another loan for the same client?

I had a client pull out of a H&L package due to a short valuation (they over capitlised) and building company insisted on a bank letter as I provided a broker letter as an application had not been lodged yet. I emailed the building company and said that Im happy to lodge an application to get a decline letter from the bank but it will cost my business $1000 (not far of the truth all things considered) that they will have to reimburse me for.

They didnt email me back after that

 

He bought a house a few months later when I was on holiday and went to Jamie instead. I believe a few months after that he refinanced and Jamie got a claw-back. He was also banned from Somersoft for abusive behavior.

 

Hi Steve

Why do they want out of the contract? Do they just not want to purchase that property anymore or was there a sudden change in their financial situation? If the latter - I'd write them the letter. If that didn't suffice - I'd tell the bank they can no longer afford the loan so they need to decline it.

Cheers

Jamie

 

Hi Jamie

I think my friend just wanted out to be honest.

Thanks for your help.

 

Thanks a lot for your help guys.

Of course this will affect the credit rating.