Hi Forum [biggrin]
I’ve just put an offer down for a house. Although I work within the prop industry, I’m unfamiliar with the finance and conveyancing process.
I was just wondering if someone could shed some light on the following question:
The offer has been accepted by the owner, I have applied for the loan and submitted an unsigned contract which is drafted up subject to finance…
Once the finance is approved (fingers crossed) is the next step to get our building & pest inspections done and forward all documents to the settlement agent ? Do we have to attend settlement ? When do we actually sign the contract ?
I know this question might be daft but its my first time buying a house and the sequence of events is a bit confusing… and to add to the confusion I’m buying it from the UK.
Any advise would be most welcome !
Many thanks in advance !
FHB
Hello FBH
Is your sales contract subjest to finance and building and pest inspection or only finace. If it’s only subject to finance and you are unsure of the state of the property, you may want to have the inspection done asap so that you can maybe influence the loan application if you find the property is not up to standard. [whistle]
Not sure that’s legal though.I’m not sure what a settlement agent is but I have a solicitor in Melbourne and when I buy a property I just put my solicitor, the sellers real estate agent and my lenders contact (someone who is dealing with the loan at the bank) in touch with each other. They then get whatever they need from each other directly.
Once the loan is approved (and the building inspection is OK, if that’s also a condition) the solicitor will do all the checking etc. and when the time comes all 3 will get together and settle. You don’t need to be present.
I just keep everyone on track via emails. [biggrin]
As far as the sales contract goes I’m a bit surprised that the sellers agent hasn’t mailed it to you to sign yet.
Hope this helps
ElkaThanks for your email Elka,
Yes you are correct, the contract is subject to finance, building and pest inspections. The settlement agent takes care of the conveyancing from what I gather. The contract of sale will be forwarded to us on Tuesday to be submitted to the bank. I’m just unsure at what point we sign the contract …
I’m guessing we sign after the building and pest inspections come back fine and the finance is approved .. we sign and forward back to the settlement agent ..
Thanks for the insight Elka – I might be stressing a little bit to much !
its an exciting process nevertheless ..
You don’t need to attend settlement.
You do need however to get the building and pest inspection done asap as most contracts only allow 5 working days for this (I’m thinking Qld) although most Real Estate Agents should learn to allow 10 working days as this is more realistic. Generally speaking under the Finance Clause you “Must Make every reasonable attempt to get finance satisfactory to you the buyer.” Therefore influencing the lender on the property condition or building report is not allowed, but if they were to decide for whatever reason to decline your loan for the property (and they don’t need to give a reason here) that is allowed if you take my drift.
Work with a broker who will knock your deal on the head at your say so and also send your solicitor a declined finance letter upon being told you don’t wish to proceed. Then find another property and start again…
Stuart Milne
Non-Conforming Specialist
READY Mortgages
http://www.readymortgages.com.au
[email protected]
Mob: 0404 056 055[
Yes you are correct, the contract is subject to finance, building and pest inspections. The settlement agent takes care of the conveyancing from what I gather. The contract of sale will be forwarded to us on Tuesday to be submitted to the bank. I’m just unsure at what point we sign the contract …I’m guessing we sign after the building and pest inspections come back fine and the finance is approved .. we sign and forward back to the settlement agent ..
Normally the sales contract would have been signed by both parties at the time that your offer was accepted. The “subject to ” clauses are your protection.
I’m a little confused. Are you getting the loan from an instiution in th e UK?
I would also think that you would need to send the sales contract back to the sellers real estate agent and not your settlement agent.
Hope this is not confusing you more.
ElkaHi FHB
You don’t mention whether you are a Australian Citizen or a British Citizen so we will assume the former otherwise you will also need to apply for FIRB Approval which can take 6-8 weeks.
With regards to your Finance make sure your lender understands that you are in the UK as many lenders and Mortgage Insurers will only go to 80% LVR. We have many clients in the UK so use lenders that are familar with Overseas borrowers lending and go to 95% for our investor clients.
Whilst your loan can be approved within the Finance period usually 14 days you maybe wish to extend this to ensure that your Solicitor or the Bank have sent you Letter of Offer and Mortgage Documents as you will want to read these prior to going Unconditional.
In addition in the UK you maybe required to have the documents witnessed at the Australian High Commission which is in London and have a 100 point check completed with a Correspondant Bank in the UK. This may also take time.
I have clients who have returned all their Mortgage Documents from the UK after getting them witnessed only to find the Witness missed 1 Authority and i have had to send them back. Settlement maybe extended but the Vendor may look to charge penalty interest so make sure you deal with someone who is well versed in financing overseas residents.
There is a big difference between lenders.
Richard Taylor
Residential & Commercial Finance Broker
**Lodoc Commercial loans from 7.19%**
Licensed Financial Planner
http://www.yourstatefinance.com
[email protected]
Ph: 07-3720 1888Richard Taylor | Australia's leading private lender
Thanks for your replies everyone.
Richard – we are Australian Citizens in the UK, the lender we have used is St George and we went through a broker. Our broker has advised us that St George will go to 100% .. although we are not going for this amount. Our broker tells us that they have a designated team that handles o/s loans.
We have been told that we have 21 days to get our finance organised and we are currently sitting on our hands waiting for the yay or nay on the mortgage. Honestly, its nerve racking stuff
[blush2]Richard thanks so much for your heads up regarding the signing of the documents .. they are going to PDF the documents and send them over to us .. I’m going to over cautious when it comes to signing the documents now !
Richard if you don’t mind me asking, which other banks do you use and have you had any dealings with St George ?
Many thanks for your advice everyone, you’ve all been a great help !
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