In the current context of high credit rates and extremely low usury rates, many loan applications are being rejected by the banks. Mortgage broker Meilleurtaux estimates that nearly 30% of files are no longer bankable. Better to protect yourself. A clause included in the sales agreement allows the buyer to not incur any costs to pay if they do not obtain their mortgage.
The condition precedent is included in the settlement
The sale agreement is an essential step in the real estate sale process, before the final deed is signed in front of a notary and the keys are handed over.
This contract, which obligates the seller and buyer to sell and price a property, contains suspensive clauses, some of which are stipulated by law. The most famous and common is the requirement to obtain a loan. Thus, when the purchase is financed with a loan, the sale takes place only if the buyer takes out his loan. This clause must be mentioned in the sales agreement if it is asking for a loan.
Between 45 and 60 days to apply for a loan
According to Article L313-41 of the Consumer Code, the term of validity of the previous condition for obtaining a loan cannot be less than one month. In general, the buyer has between 45 and 60 days to apply for a loan from banking institutions. This period is mentioned in the sales agreement. During the summer period, due to holidays, it is recommended to negotiate with the seller for a period of 75 days.
No penalty to pay
If a bank does not want to finance the buyer’s project, the sale cannot take place and therefore it is cancelled. The security deposit that he paid to the seller upon signing the settlement (in principle 10% of the property value) is returned to him. He has no fine to pay.
Is it only a matter of time? Then the buyer can ask his bank for a loan agreement certificate proving that it is an administrative delay beyond his control.
What if the purchase project was financed by several real estate loans?
To finance his real estate project, the buyer can request a conventional loan but also a zero rate loan (PTZ) for example. It is enough to refuse one loan to cancel the sale without penalty to the buyer.
What if no banks ask?
If the sales agreement states that the purchase will be financed by a mortgage, the buyer is obligated to ask the banks to try to obtain this loan. Otherwise, he will have to pay the seller the selling price agreed upon in the contract.
And if we did not mention the prerequisite for obtaining the loan?
According to mortgage broker Cafpi, “If the buyer does not need credit to purchase his property, he will have to write a clause manually. And if he finally resorts to a loan, he cannot invoke the interest of that clause in case the bank refuses and forgoes the fines.” So you need to think twice about The matter…