Subject to Finance or Valuation

Hi there,

Just seeking the help of experts please.

I have a finance pre-approval already, if I wish to bid for any property then I should be including "Subject to finance" clause ?

The main reason from my perspective is :

If the bank undervalues the property, then I have to arrange for the gap in bidding amount.

But, an agent mentioned that I don't have to include "Subject to finance" clause (since I have pre-approval), for better clarity he has recommended me to include "Subject to Valuation" clause.

Just wondering whether it's correct advice please. Any opinions please ?

Regards,
Melbie

 

Thanks for reply, sorry I was not clear before. It's private sale, not auction.

 

Sure, definitely, This question was more from offer perspective, I am going to take the advice of a conveyancing solicitor before signing the contract please.

Thanks

 

Be very specific in your finance clause. Go for an amount of 90% of the purchase price so that even if the valuation comes in low they won't be able to approve at 90%.

seek specific legal advice on the wording

 

There's a few problems with a 'valuation' clause.

Firstly it's quite rare for there to be a valuation problem. I have had more cases where the lender decided not to honour the pre-approval.

Secondly what if the vendor tells you to get a valuation with a different lender? That valuation might be fine, but that's no guarantee that they'll approve the finance.

In essence a valuation clause doesn't protect you very much.

 

Thanks for your time and opinion

 

Thanks for your inputs and advice