What Does “Subject to Finance” Actually Mean?
If you’re buying a home in Perth and your offer is subject to finance, it means your purchase depends on your lender formally approving your loan before settlement.
It’s a standard clause in many contracts — but if you don’t understand how it works (or what can go wrong), it can cost you time, money, or even your dream home.
Let’s break down how it works in WA, the risks, and how to get it right.
How the Subject to Finance Clause Works in WA
When you submit an offer on a property, you can include a finance condition — typically 21 days — which gives you time to get formal loan approval from your bank or broker.
If your finance is approved within the timeframe, the deal becomes unconditional.
If your finance is declined, you can withdraw without penalty — as long as it’s within the terms of the contract.
Key Things You Need to Know
✅ Pre-approval isn’t full approval
Just because you’re pre-approved doesn’t mean your lender will say yes to the specific property — especially if there are concerns with the valuation.
✅ Timing is critical
If your finance clause expires and you haven’t secured approval, the seller can terminate the deal or push you to proceed without protection.
✅ Valuation can derail things
Even if the purchase price is fair, your lender may value the property lower — which can reduce your borrowing power or kill the deal.
✅ Seller confidence matters
In a hot market, sellers may favour unconditional offers or finance-approved buyers. If you’re going subject to finance, a clean, well-prepared offer helps.
How to Strengthen a Subject to Finance Offer
- Get written pre-approval from your lender before you start offering
- Keep your finance period short and realistic (e.g. 14–21 days)
- Make sure your broker or bank is ready to act fast
- Be honest with your agent about your position — it helps everyone work toward the outcome
Not Sure Where to Start?
📞 Call Rob Walker
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