How do I place offers with no finance condition?

Placing offers with no finance condition (meaning its usually an unconditional offer) is a typical way to help improve your chances of an offer being accepted.

It’s generally even more popular when the property market is buoyant and if a property is being sold at auction. Tenders and deadline sales can also create that urgency to place an offer with no conditions. If you are a first home buyer then you can feel pressured to remove the finance condition meaning the process becomes even more stressful.

Your best chances of being able to place an offer with no finance condition (which usually means you will have done all your other due diligence to enable no conditions at all) is to have at least a 20% deposit and be pre-approved already.

The first thing you need to do is have your finance pre-approved with the help of your Craig Pope Financial mortgage broker. Usually, any mortgage approval will still be ‘conditional’ meaning the banks’ will have conditions pertaining to your approval, including an expiry date. You need to make sure your approval is as ‘clean’ as possible, meaning the only remaining condition is “subject to a satisfactory Sale & Purchase agreement / property”.

This means the banks’ have to be happy with the property you are buying, it’s condition and the amount you are paying. Just because you are pre-approved, doesn’t mean you can go and place unconditional offers willy nilly! (Unfortunately, this does happen)

Once you have got that ‘clean’ pre-approval, there is still a careful process to be followed to ensure you don’t make a calamitous mistake. Here are the key steps to follow with the help of your mortgage broker:

  1. Make sure you have done all necessary due diligence e.g. checking title search, building report, full insurance quote, LIM report and anything else specific to the property such as checking body corporate rules & fees.
  2. Provide your mortgage broker with the draft sale & purchase agreement and disclosures, stating how much your maximum offer will be – your broker will then get the bank to check and confirm in writing that they are happy with you to proceed with no finance condition. This can take 1-2 working days.
  3. If the bank is happy and confirms it in writing, you then coordinate with the agent to complete the sale & purchase agreement/auction document/tender. Make sure the final version does not differ from the draft that was approved by the bank (e.g. no last minute conditions or disclosures added), otherwise the bank could decline it.
  4. If your offer is accepted, the bank still has to sign off the full and final version, so you would get this to your mortgage broker immediately after its all signed up.

If your finance approval is for low deposit lending (i.e.) deposit less than 20%, you will likely have a condition pertaining to providing a registered valuation. This makes the process a little more difficult and would require a valuation to be done and signed off at the same time as the draft sale & purchase agreement is signed off. That can mean time/energy/money spent and no guarantee you will be successful!

But seek the help of your Craig Pope Financial adviser to ensure it’s a stress-free outcome!