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As a layperson, you have likely read the third clause of the standard REIQ contract used for carriage and feel that your financing pre-approval meets its terms. Indeed, this could not be less true. In order to avoid delays or stumbling blocks during the moving process, make sure that your finances are in the right order.
Third item and financial approvals –
The third clause of the standard REIQ contract used for the transfer relates to financial approvals. In order to meet the terms of the contract – and for the transaction to proceed – the buyer must be approved for financing. Unfortunately, many potential homebuyers believe that conditional financial approvals are sufficient; They are not. Under the provisions of the third clause, you must obtain clear and unconditional approval for financing.
When shopping for a new home, many potential homebuyers get pre-approval from banks and lending institutions. While this can give you a good idea of how much you can afford, and is generally a smart way to proceed, it’s not the same as getting an actual approval for financing. It is simply an initial way of knowing what you qualify for in terms of a home loan.
The problem that often occurs is that potential homebuyers get pre-approved by the bank or lending institution and start shopping for a new home. When they find one, they start the transfer process. When confronted with the third clause, they inform the seller of what they are satisfied with because of their pre-approval status. In fact, the third clause is not met. At this point, the seller’s real estate agent or other party informs the buyer that they have not met the terms of the third clause, leaving the buyer feeling completely lost and confused. Of course, buyers who have retained the services of a first-rate conveyancing attorney don’t have to worry about inadvertently misunderstanding this important clause.
Don’t be left in the dark –
In order to meet the conditions of Clause 3, your financing must be approved for the purchase of the home in question. This distinction may seem simple, but it is also very important. Failure to understand the terms of this paragraph can cause the transfer process to get bogged down and take much longer than it should. In the meantime, the house you want can easily slip through your fingers. For best results, always hire a reputable and experienced conveyancing lawyer to help you navigate the complex and complex waters of the moving process in Australia.
