Property sale in Melbourne

hi there, looking for some advice regarding sale of a property in melbourne
If buyer had special condition 'subject to finance' and they say that they haven't received approval by the date specified in the contact as bank hasn't picked their file yet. Is vendor entitled to ask for proofs to actually know that they made an application in time?

Also, does 'subject to finance' clause also covers the lesser valuation of the property, as in if the valuation comes out lesser than the sale price, can buyer get out of the contract?

 

Chances are buyer will ask for extension, therefore was keen to know if vendor can request proof that application was made in time and that its still pending with bank. Ta

 

I can't comment on the legal specifics of asking for proof that an application has been made, but there have been cases where this has been a key factor.

In one case the contract had a finance clause specifying the ANZ. The broker informed the purchaser that they were not eligible for finance with the ANZ or any other lender so no application was actually lodged.

When the purchaser tried to exit the contract on the finance clause, they were asked to produce evidence of the decline notification from the ANZ. As no application had been made, this did not exist. The vendor took the matter to court and won the 10% deposit (and possible other penalties).

They take home note from this is obviously to apply for the finance even if you know you won't qualify. The problem is most lenders and brokers won't be much interested in going through the process if they know it won't be successful. Thus you should be taking to a lender or broker before purchasing. Don't simply assume you'll get the finance.

 

Yes and yes.