My house buyer’s pulled out via the subject to finance clause, can I get proof?

M

mustang01

Registered User
Messages
126
Just when I thought my house sale was good to go with contracts exchanged I get an email from my solicitor today saying buyers have pulled out of the sale by triggering the law society loan clause. I’m raging and not convinced that they’ve suddenly been refused a mortgage when it was all systems go last week.
Do they need to provide proof of refusal or do I have to just suck it up? Can’t believe it’s gone south at last minute!
 
Property transactions are non binding until closure.
Even if they can't or won't prove that they couldn't get finance (I doubt that they are obliged to but you should ask your solicitor) what difference is it going to make?
You can't force them to close the contract.
Especially if they actually don't have finance.
Ask your solicitor also if you can keep any/all of the deposit as a result of them pulling it but it would be unusual if the contract provided for that.
 
ClubMan said:
Property transactions are non binding until closure.
Even if they can't or won't prove that they couldn't get finance (I doubt that they are obliged to but you should ask your solicitor) what difference is it going to make?
You can't force them to close the contract.
Especially if they actually don't have finance.
Ask your solicitor also if you can keep any/all of the deposit as a result of them pulling it but it would be unusual if the contract provided for that.
Click to expand...
I know what you mean and it’s surely dead in the water anyway but id have thought that if people use this clause they should at least be obligated to prove it, otherwise what’s the point in contracts at all.
 
Interest rates are going up constantly at the moment. This could have affected your prospective buyers ability to complete the drawdown of their mortgage.
 
mustang01 said:
Do they need to provide proof of refusal or do I have to just suck it up? Can’t believe it’s gone south at last minute!
Click to expand...
If it's a genuine finance issue then they might still want the house but the bank won't lend them as much.

In your shoes I would try to negotiate. What's worse: a five per cent discount off the sale agreed price today or restarting the sales process?
 
RichInSpirit said:
Interest rates are going up constantly at the moment. This could have affected your prospective buyers ability to complete the drawdown of their mortgage.
Click to expand...
Why would iit though if Interest rate is locked in at time of Loan Offer and banks give a months notice of any rises, I’m in the same boat myself. There was no talk of problems up to now, I think it’s just a handy excuse and won’t be so obliging with a clause next time as I assumed a contract was a contract.
 
mustang01 said:
won’t be so obliging with a clause next time as I assumed a contract was a contract.
Click to expand...
My understanding is that few solicitors would advise purchasing clients to sign a contract that doesn't include the "subject to finance" clause. You may have to look for self financing/cash buyers if you want to avoid it. But you should talk to your own solicitor to get proper advice.


The committee recommends that solicitors acting for purchasers where a loan is required in order to complete the purchase transaction insert a special condition (or amend their usual form of special condition regarding loan approval) to provide that the contract and the completion thereof is subject to the purchaser’s loan approval being in place at the date of completion in a sum sufficient to allow the purchaser complete the contract.

A sample special condition is set out below...
Click to expand...
 
Last edited:
You must log in or register to reply here.
Back
Top