Reaching end of subject to finance clause - no approval yet

Hi guys,

My partner and i have put an offer in on some land with a 45 day subject to finance clause.
We have used a broker to make our offer to the bank, but due to our builder taking forever to incorporate our feedback into their plans and as such provide us with build contracts to submit to the bank - our loan application went in at about day 35. We currently have 2 days left of our finance clause.

Our broker has advised us that in the banks system it mentions we should have a response by the 30th of September, which will be 3 days after the finance clause ends. As such, we've asked the agent for an extension - however he has acknowledged but not responded with a formal answer to our request.

I am starting to panic now and wonder if we should just get our finance application denied? What is the best way to do this? Should we contact the bank ourselves and tell them we can no longer afford the house or something? Our broker has told us we should easily get the loan - however im just worried that if the finance clause passes the house could be advertised again and we would lose our $5000 deposit.

Any advice would be much appreciated. We are first home buyers and are quite clueless about this all.

 

What is your lawyer/solicitor recommending?

Has anyone requested the agent to provide the approval to the extension in writing, by a date/deadline (obviously before the current finance date)?

 

Ask your broker for an honest assessment as to if there will be a problem or not. By this stage an experienced broker would effectively know what the outcome would be.

If they flippantly say it'll be fine, ask them if they'll guarantee 50% of your deposit if it isn't.

 

Hi, thanks for your response.

If i dont have a response by tomorrow from the vendor regarding extension (1 day before finance clause ends) is it possible for me to contact the bank directly and have the application denied?

Do i need to provide evidence to the vendor that the finance clause has been denied or can i just tell them that it has and wait for the bank response?

 

There's been several legal cases where the purchaser didn't get the deposit back because the bank hadn't actually issued a decline letter. If you've got to exit the contract on that basis, make sure you've got a decline letter.

Talk to your broker and your conveyancer about this. Doing it yourself may have unintended consequences.

 

first thing to do is to speak to the lawyer. get them to interpret the contract to see if evidence is needed about the finance. A finance clause will not be met if finance is not obtained. It likely doesn't say anything of finance being rejected.

It will come down to the construction of the clause

 

This.

 

I'm presuming this is in Perth and using the REIWA contract

If the finance clause passes then it isn't the end of the contract, it still keeps going but you no longer have the right to terminate it if the bank does decline after that date - pretty sure that is how it works here in Perth

Do you have a lawyer or a settlement agent? they can probably explain it better than me

 

If that is the contract clause, carefully read 1.2 (and 1.6) it doesn't say anything about needing to be rejected.