Time Pressure

Hmm, that doesn't sound right. Say e.g auction is under 66w. If you are the winning bidder then you get the building and pest and are not happy with it. Loose 10% when pull out. Unless there was some material fact the vendors didn't disclose. I could be wrong

 

From a legal website but always check first hand with your legal team when buying:

When buying or selling a property, you will hear about Section 66W Certificates.

In New South Wales, the practice of entering in to a contract to buy a property is called “exchange”. As a general rule, when the vendor and purchaser have agreed on the price and various conditions, they exchange contracts. The agreement then becomes binding upon the parties.

The purchaser, caught up in the exuberance of the transaction might be keen to exchange contracts and exclude other interested buyers, without being fully informed as to the condition of the property. The law recognises this, and allows the purchaser a standard cooling off period from the date of exchange to 5:00pm on the fifth business day after exchange.

In lieu of the above, some Vendors may ask the Purchaser to provide a 66W certificate. A 66W certificate waives the standard cooling off period and makes the contract binding upon the parties (rather than 5 days after exchange). A 66W is generally asked for by Real Estate agents to ensure a rapid sale, and to ensure that the purchaser cannot back out of the purchase if they discover something that would make them rescind on the contract, for example the house is full of termites. In a rising real estate market (like the current market in Sydney and some regional centres), Vendors can ask for these conditions because they are in a “Sellers Market”, and they are generally accepted by potential purchasers.

If the Purchaser does rescind the contract after exchange and a 66W has been provided, then the cooling off period does not take effect and the penalty as per the contract will apply (generally 10% of the purchase price). Alternatively, if the purchaser rescinds the contract during the cooling off period, they will forfeit 0.25% of the total purchase price, a considerable difference

 

Auctions are a different matter, no cooling off period obviously You can negotiate specific clauses into the contract before the auction, but subject to finance is probably not one of them. Again, keen to learn and would appreciate an expert's clarification on this. (not that I'm buying any time soon anyway)

Yep lose the deposit as indicated on the contract (usually 10%), whereas pulling out during the cooling off period (i.e. no 66W) only loses you 0.25%.

 

This implies that a 66W cannot be used with a "subject to b&p" clause, but possibly can still be used with "subject to finance"?

 

I'm in the process of exchanging in NSW, offer is subject to finance and P & B. Did not sign s66W. 5 business days cooling off period.

http://www.meryllynpageconveyancing.com/selling/cooling-off-period-sale/ (i just googled it)

 

Q. Should I get unconditional finance before I exchange contracts?
A. Yes. Once contracts exchange you will be bound to complete whether or not you can obtain finance. A conditional approval, often referred to as pre approval, will be subject to assessment of your personal financial situation. The mortgage provider may also require that a registered valuer provide a satisfactory valuation of the property. An unconditional loan approval will be provided once the mortgage provider is satisfied that you meet their criteria for a home loan and the valuation of the property is satisfactory. Your mortgage broker will be able to assist you in obtaining unconditional loan approval.

Again always check with legal advice personally and not anything you read on line.

 

Conditionally unconditional.

Defeats the purpose. S66w or nothing.

 

@Scott No Mates Ever hear of cases where they went 66w and could not get finance? Would be a disaster...

 

Intuition suggests 66W or nothing, but it seems there is also an in-between.

Quoting @DaveM from ye olde somersoft: "Unless you are 100% sure of the property and your finance, you would want to offset a 66W waiver with a subject to finance/building and pest clause."

Hence contracts can be exchanged with a 66W, and a subject to finance clause, and should the purchaser fail to obtain finance, the purchaser forfeits their deposit but is not bound to complete.

 

Just like going to auction unprepared. Buyers caught with their pants down.

 

66W + normal contract + finance falls through... disaster indeed, haven't heard of this happen personally (surely there are some threads on here/SS about them though)

 

Its a variation, but wont be as powerful as no conditions obviously.

 

Something else worth noting, even if finance comes through it might not be the amount you needed leaving you to come up with more deposit...or else goneskies.

 

Definitely... 66W > 66W subject to > normal > subject to
(or maybe the middle 2 are the other way around... probably depends on the particular case)

Yep my recent PPOR purchase val came back ~$100k short... downside of buying a unique architect-designed house in a small suburb with no comparable sales. Had to front up a larger deposit, thankfully no dramas...

 

ouch!!

 

Yeah very rare it won't go through. Who wants to loose their hard earned 10%. This is when family, friends and maybe credit cards become best friends for the time being