Buyer’s guide · Western Australia

Finance conditions in WA: what every buyer needs to know

In WA, your offer becomes a binding contract as soon as it’s accepted, and there’s no cooling-off. Here’s how the finance clause protects you, what you must do and what happens at the approval date.

In Western Australia, most homes are bought by signing an Offer and Acceptance form. Once the seller accepts your offer, you have a binding contract. There’s no statutory cooling-off period, so the conditions you put in your offer are your main protection.

For most buyers, the most important of those is the finance condition. It makes the contract depend on your loan being approved by a set date. This guide explains how the standard WA finance clause works, what you need to do and what happens at the approval date.

How the finance clause works

Residential sales in WA usually use an Offer and Acceptance form, together with the Joint Form of General Conditions for the Sale of Land, published by REIWA and the Law Society of Western Australia. The finance clause is part of those standard terms, and you switch it on or off on the front of your offer.

Sign the right box

The Offer and Acceptance asks you to sign either “Finance Clause Is Applicable” or “Finance Clause Is Not Applicable”. If you need a loan, make sure you sign the right one. If you sign “not applicable”, you have to settle whether or not your lender approves the loan.

The finance details

You can name a preferred lender, the loan amount and the latest date for finance approval. Set the approval date by your lender’s real turnaround times, not the agent’s preference, and check what the form says applies if you leave any of these details blank.

What you must do

Once your offer is accepted, you must use your best efforts to get finance. In practice, you should:

• apply for the loan promptly, to at least one lender or through a mortgage broker
• give the seller written evidence of your application if they ask for it in writing
• tell the seller or agent in writing straight away if your loan is approved
• tell them straight away if it’s refused, with written evidence of the refusal.

If you don’t do these things, you may lose the right to rely on the finance clause. You could then be forced to settle, or put your deposit at risk.

Using a mortgage broker

Changes REIWA made to the finance clause in 2022 recognise mortgage brokers. You can apply through a broker rather than directly to a lender, and a broker’s written advice that the loan would be unsuitable for you, after a preliminary assessment, can be used to show finance hasn’t been approved. Before the change, a broker often had to lodge an application with a bank just to get a rejection letter. Ask your broker to put everything in writing.

What happens at the approval date

Under the standard finance clause, what happens depends on the notice given by the approval date:

That last row catches many buyers out. If your approval is running late and the seller has a backup buyer, you could lose the property even if your loan comes through the next day. Consumer Protection WA warns that even if finance hasn’t been obtained, the contract may still be enforceable until the right notice is given to end it.

Extensions

There’s no automatic extension. The approval date can only be extended if you and the seller agree and amend the contract in writing. Ask as soon as you know there may be a delay.

Waiving the condition

You can give up the protection of the finance clause by written notice, but only do it once you have formal, unconditional approval you’re happy with. After that, you must settle whatever happens.

No cooling-off in WA

WA has no statutory cooling-off period for buying property. A cooling-off period only applies if you and the seller agree to include one. In practice, that means:

• your offer becomes binding as soon as it’s accepted and you’re told of the acceptance
• you can’t change your mind for free after signing
• any protection you need, such as finance, a building inspection or the sale of your current home, must be in your offer before you sign.

Our step-by-step guide to buying in WA explains where the finance clause fits in the whole process, and our guide to building and pest conditions in WA covers inspections.

Frequently asked questions

This article is general information only and is not legal advice. It reflects Western Australian law at the date of publication. Please contact us for advice about your circumstances.

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