Most people who will buy a property in Australia this year will do so with the help of outside finance. They'll turn to their bank or another mortgage lender, who will advance them the money with the property itself as collateral. If you are buying a property for the first time and are in this position, you may wonder how you can make a realistic offer without having a confirmed amount of finance in place. As most people seem to be in your position, surely there is a way to do this while protecting all parties?

Making a Conditional Offer

You can certainly buy a property subject to getting a loan approval by filling in the appropriate details within your particulars of sale. This will allow you to commit to buying the property but only if you can get your bank or financier to agree.

Details to Reveal

To do this, you have to reveal the name of the company you are approaching for the loan. You also have to say how much you are looking for, just in case the bank is not able to offer you as much as you seek. In this situation, you would be able to withdraw from the contract if the bank offer came up short, by comparing their formal offer against the particulars of the sale.

Approval Date

Crucially, there has to be a time limit, so you need to enter an approval date. This is the last day you can end the contract (without paying the penalty) should the loan be declined.

Seller Uncertainty

Sellers may not like this type of conditional offer as it puts the entire matter in the hands of a third party. And crucially, they are not able to market the house to any other entity while this conditional contract is in place.

Times of the Essence

It is in your interests to move this forward as quickly as possible, and remember, once that approval date has passed, the contract is now unconditional. If you do not move forward, you will probably be on the hook for penalties. It's possible to seek an extension in certain situations, but the seller may not be too happy to grant it.

Not Valid at Auction

Remember, this type of agreement is only valid in a private sale. If you buy the property at auction, you cannot make the purchase conditional but are committed to going ahead, come what may.

Getting Help

If you need help in making a decision or seek any other advice related to your decision, make sure that you employ the services of a conveyancing lawyer.