Subject to finance

Discussion in 'The Buying & Selling Process' started by Mauve, 3rd Jun, 2020.

Join Australia's most dynamic and respected property investment community
  1. Mauve

    Mauve Well-Known Member

    Joined:
    18th Sep, 2017
    Posts:
    77
    Location:
    Little River
    I have an offer on my property which is subject to finance. The buyers have included the subject to finance condition to be for 30 days. That seems like a long time. Is that length of time typical?
     
  2. twobobsworth

    twobobsworth Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    772
    Location:
    Sydney, New South Wales
    What state is it in, have you agreed and what does your solicitor recommend.
     
    Mauve likes this.
  3. Mauve

    Mauve Well-Known Member

    Joined:
    18th Sep, 2017
    Posts:
    77
    Location:
    Little River
    Thanks for the reply. I have not agreed. I haven't called the solicitor yet but will call in the morning. The property is in Victoria.
     
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,667
    Location:
    Australia wide
    That is rather long for any state!
     
    Mauve likes this.
  5. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,130
    Location:
    03 9877 3000
    Normally the finance clause would be 1-2 weeks. Occasionally there would be another week extension beyond that.

    Right now, 3 of the Big 4 banks have exceptionally long processing times, up to 30 days. Likely the purchaser is speaking with one of these.

    I would push back, tell the vendors to go to a different lender through a broker. There's lenders out there with 48 hour turnaround times right now.
     
    Mauve likes this.
  6. Mauve

    Mauve Well-Known Member

    Joined:
    18th Sep, 2017
    Posts:
    77
    Location:
    Little River
    Thanks so much. Apparently they have pre appoval-according to the agent, so not sure if that makes it quicker. I believe they are using a broker. Pushing back sounds like a great idea.
     
  7. Mauve

    Mauve Well-Known Member

    Joined:
    18th Sep, 2017
    Posts:
    77
    Location:
    Little River
    Thanks Terry, I thought so too.
     
  8. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,598
    Location:
    Gold Coast (Australia Wide)
    What is their choice of lender pls ?

    ta
    rolf
     
    Mauve likes this.
  9. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,130
    Location:
    03 9877 3000
    It should only take the broker a few days to organise the valuation. If they have a legitimate pre-approval, then their risk is negligible once the valuation is complete. The broker should be able to make a reasonable assessment as to if they can go unconditional beyond that.

    If they're not willing to make that assessment, tell them they need to use a different lender and you'll only accept a 10 business day finance clause.
     
    Mauve likes this.
  10. Mauve

    Mauve Well-Known Member

    Joined:
    18th Sep, 2017
    Posts:
    77
    Location:
    Little River
    Thank you so much!
     
  11. Mauve

    Mauve Well-Known Member

    Joined:
    18th Sep, 2017
    Posts:
    77
    Location:
    Little River
    I am not sure. The agent has said he will email the contract to me in the morning.
     
  12. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

    Joined:
    18th Jun, 2015
    Posts:
    6,673
    Location:
    Perth WA + Buderim Qld
    If they have a pre-approval, they certainly don’t need that long.

    Some lenders are super slow right now, but we avoid them, and won’t touch them for purchases.

    If your buyer is going through them, and their pre-approval hasn’t actually been assessed, it might take that long to go through AND there’s a real risk it could go longer.

    ANZ, for eg, are taking a month to pick up files, and then there will undoubtably be back and forth...and troubleshooting is virtually impossible because the whole system is overloaded.

    So long story short...say no. :)
     
    Mauve likes this.
  13. Mauve

    Mauve Well-Known Member

    Joined:
    18th Sep, 2017
    Posts:
    77
    Location:
    Little River
    Thanks so much for the reply and information. I will say no.
     
  14. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,667
    Location:
    Australia wide
    would you consider say 14 days?
     
    Mauve likes this.
  15. KingBendtner

    KingBendtner Well-Known Member

    Joined:
    9th Oct, 2015
    Posts:
    83
    Location:
    Melbourne
    I'm with @Terry_w
    Push back and meet in the middle, 14 days seems quite reasonable with pre-approval already in place
     
    Mauve and Terry_w like this.
  16. Mauve

    Mauve Well-Known Member

    Joined:
    18th Sep, 2017
    Posts:
    77
    Location:
    Little River
    Yes, that sounds more reasonable. Thanks
     
    Terry_w likes this.
  17. Mauve

    Mauve Well-Known Member

    Joined:
    18th Sep, 2017
    Posts:
    77
    Location:
    Little River
    Hi again, I have tried to push back however the buyer has refused. The buyers are applying for a loan with parents as guarantor. My solicitor said this type of loan may take longer. She has really just said the decision is up to me. 30 days seems so l long....
     
  18. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,667
    Location:
    Australia wide
    Imagine 30 days come and they pull out.

    you could tell the agent to keep marketing it on the basis that the sale may not happen, but they might be reluctant to do this in case it does - they would prefer to divert clients to other properties.
     
    Mauve likes this.
  19. Mauve

    Mauve Well-Known Member

    Joined:
    18th Sep, 2017
    Posts:
    77
    Location:
    Little River
     
  20. Mauve

    Mauve Well-Known Member

    Joined:
    18th Sep, 2017
    Posts:
    77
    Location:
    Little River
    ANZ and buyers parents are guarantors.