Mortgage approval clause in contract when selling house

[dublinaam]

Hi,
I am selling our house and the purchasers have sent in the contracts and deposit. There is a clause (below) that states the purchaser could rescind the contract without penalty if they don't have mortgage approval. I was given the impression they already have this and it makes me concerned that they have a get out clause should they not wish to proceed. My solicitor says its standard but I think it sounds odd. I always thought at this stage they were unable to back out.


This contract shall be subject to the purchaser obtaining approval for a loan
of €x from Bank X on the security of the premises, provided always that
if this loan has not been approved in writing within two months from the date
hereof, either party shall be entitled to rescind this contract and in such event
the purchaser shall be refunded his deposit without interest costs or
compensation thereon.

If the loan approval is conditional on a survey satisfactory to the lending
institution or a mortgage protection or a life insurance policy being taken out
or the lending institution being satisfied at any time prior to drawdown of the
loan that its valuation of the property has not changed since the date of loan
approval or some other condition, compliance with which is not within the
control of the purchaser, the loan shall not be deemed to be approved until
the purchaser is in a position to accept and draw down the loan on terms
which are within his reasonable power or procurement.

 

[RedOnion]

Unfortunately it's a standard clause, and effectively gives them a get out.
They might have mortgage approval, but that doesn't mean there won't be a hiccup.

 

[mf1]

"My solicitor says its standard"

Listen to your solicitor- it's standard.

I had a situation recently where my 27 year old client ( a purchaser) was struggling with life cover due to an ongoing relatively minor health issue..........

the loan shall not be deemed to be approved until
the purchaser is in a position to accept and draw down the loan on terms
which are within his reasonable power or procurement.

If you're not happy with the clause, find yourself a cash purchaser.

And there are few enough of them around.

mf