- Our contract is yet to become unconditional while we await a bank valuation on the property. On what grounds can the bank valuation give us an out clause from the contract?
Generally speaking because I don't know the specifics of your situation. If the offer is subject to finance, and the valuation isn't acceptable to the bank, it will result in finance being knocked back – there's your out.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Thanks Jamie. So in theory, if our contract states we are to borrow $600,000, and based on a bank valuation, the bank is only prepared to lend us $590,000, this would be an 'out', regardless of whether we can raise the additional $10,000 or not.
Yep
You have to be careful with contracts, wording is everything
If it is subject to fiance that only means can you get out if the bank won't give you a loan, has nothing to do with the valuation. If the fiance clause says it is subject to a satisfactory valuation then you are covered. I have always preferred to give a figure on the valuation clause so there is no doubt e.g bank valuation must match purchase price or bank valuation needs to be within 5K. I have been advised in the past that if the purchaser wanted they could still enforce the purchase on a generic finance clause in this case as the bank is willing to lend you the money and you have the ability to met the shortfall with the valuation.
Most vendors won't figth it but they do have that ability if they want.
wuzziemoo wrote:You have to be careful with contracts, wording is everythingNever a truer word has been spoken.
If you are writing conditions make sure there is no ambiguity whatsoever. Ambiguity leaves comments open to interpretation and then the muck can hit the fan.
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