Purchasing property can be an exciting and daunting experience for many, especially first home buyers. One way you can ease the pressure of buying is ensuring you give yourself the opportunity to perform your due diligence. Using conditions when purchasing is a great way to put your mind at ease and the most used condition is subject to finance.

Most banks will always ask you to enter a contract with the subject to finance condition. It gives them time to formally look over your particulars, perform valuations on the purchase property as well as any others in your portfolio if needed and if for any reason your finance is not approved, it gives you an out of the contract. Even though a contract falling over is frustrating for all parties involved, the fight to get out of an unconditional contract is a lot worse.

So, for instance, if your finance falls through and you didn’t protect yourself with a subject to finance clause, you might find your self in a sticky situation. Firstly, whatever monies you have passed as a deposit, whether it is $1000 consideration or the full 10%, you may be liable to lose all of it. It is an expensive process, so unless you are 100% sure you will get the finance, do not enter a contract without the clause.

Buying a property is a huge transaction. Make sure you comfort yourself through the process and always ensure you utilise conditions to give you peace of mind. Another thing to remember is that an auction sale is an unconditional sale on the day, unless you have discussed prior with the agent and have acceptance for any conditions (which is highly unlikely), you will have entered a binding contract at the fall of the hammer. At the end of the day, nobody wants to go into battle after the fact, with the end result being loss of money and an unsold property.



The following advice is of a general nature and intended as an opinion and broad guide. For all legal, financial or real estate advice you should obtain independent professional advice to do with the specific nature of your circumstances before making any legal, financial or real estate decisions.

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