argh, confused, overwhelmed and over it!

[2CheekyMonkeys]

well DH and i went to aussie home loans to see if we could borrow anything and we decided to go for preapproval with commonwealth. the lady told us it would take 3 days. this was about 2 weeks ago now. since she told us it wouldnt take that long to get preapproval we decided to start looking around at places and we found one. we put in an offer and it is in the processes of being accepted.

anyhoo, i have been calling aussie pretty much every day and they are saying that commonwealth and all banks are currently under massive backlog due to the high number of applications due to first home buyers grant etc. so it is taking AGES! anyway, they told us to fax them the copy of the completed contract once we have signed it, seller has signed it and it has been dated, then they will ammend the preapproval to simply being an approval of loan (which apparantly will not take as long cause it will have more priority then)

the thing is, we dont want to sign the final contract before we absolutely know that we can get the loan. plus, when do you get the solicitor involved? we kinda thought you get the solicitor to check the contract before you sign it. if this is the case, do we hire a solicitor before we have our loan approved? what if we end up not getting approvbed, then we have to pay for the solicitor and still not have a house.

is it pretty much guaranteed that we will be approved, cause the broker put all our info into the computer and came up with a list of banks that would lend to us and how much they would lend? so is there anything different that the bank actually does whereby they would decline our application?

so can anyone tell me what to do. what is the process of doing this? i just dont get it. every time we call aussie we cant get a straight answer. dont really know who to ask for more info.

(someone told me not to go through a broker, wish i had listened to em).

argh!

[Nelle]

It's not your broker's fault, our pre-approval took about a week and a half too - apparently they're busy not just because of the first home buyer's grant, but also everyone else who is refinancing their loan because of the good interest rates. So it's a busy time.

As for the solicitor, not sure, we're not up to that yet either! Why not call a solicitor and ask?

[Frantelle]

I do not know much about QLD and I think it is pretty different to NSW. But

I would check you cooling off rights as in once the contract is exchanged when what time period do you have to change your mind e.g 5 days, 2 weeks and what is the penalty.

Also I think you should see if you contract has a finance clause that is you have until say two weeks to get your finance in order after the date of contract and if for whatever reason you are denied can you get out of the contract.

Can you speak to a solicitor before you sign anything as I think most agents just want the sale and is it too late for you to go to a bank direct and cut out the mortgage broker (I personally hate them).

[Bengal]

When we bought we gave a deposit, on a house we loved, and made sure it was clearly written that it had in the clause section, "subject to loan approval", that way you are covered. If you dont get the loan, you dont have to buy the house. I am sure the conveyencor (sp) didn't see the contract until after we had the loan approved. Could you ring a local conveyencor/solicitor, and ask for advice ?

PS - You can cancel with your broker, we did !! And went to the bank direct. Ring your local Commonwealth bank and ask for the Lending Officer, he may be able to get the ball rolling quicker for you, and he will be able to help with your other questions as well...

[bon]

In many cases, there is clause in the contract that states you are signing it subject to finance being approved. So therefore, if the bank does not approve your finance, the contract becomes void and you do not have to follow through with buying the house. The thing is, many banks will not absolutely approve finance before there is a contract and an actual house to approve the finance for IYKWIM. Because the house is their security for the loan, so they will do checks on the house and what it is worth etc before doing the final approval on the loan.

With regards to a solicitor, usually all you need before signing a contract is the name, address and phone number of the company you wish to use. Whether it is a solicitor or a conveyancing firm. In our case, when we signed the contract for our house we didn't have those details on hand so they let us ring them the next day with the info. The real estate then contacts them on your behalf with the details of the contract, and things start happening. You could get them to check over the contract for you before hand, but most contracts are standardised anyway and not likely to contain any untoward clauses. Just make sure it is subject to finance approval and good building and pest insection reports. That way you have an out if you don't get approved or if there turns out to be a major building flaw or pest problem with the house. The conveyancing doesn't usually start before the finance is approved - so you will not have to pay for a solicitor if you do not get approval to buy the house.

I would do what the lady from wizard suggested - if you want the house, sign the contract and get the bank to fast track the approval.

[Muppity]

Don't sign anything! That is the first rule.

I don't know abotu Queensland in particular but I will assume that it is similar to ACT and NSW where I worked in conveyancing.

Agents love to get you to sign because then they have more chance of getting the sale because people are less willing to back out.

Tell the agent that you will take a copy of the contract with you and will run through it with your solicitor. Or if they are insistent tell them who your solicitor is and that they can send the contract through to them and you will contact the solicitor. Generally solicitors have a fixed price for a conveyance and so going through the contract with them is a really good idea.

Conveyancing contracts are generally standard but they are trained to see if there is anything unusual. While there is a cooling off period by law (I am pretty sure - but there may not be in Qld) it isn't always long enough to get the info that you need.

Solicitors also have ways of getting banks to fast track approvals because they have so many contacts with them, they know the right people to call etc.

Hope that this helps. It is a daunting process the first time but well worth it in the end. Good luck

[Arimeh]

Hollo - first up - Calm down mate.

Second - PM me - I'll give you my number and we can chat. I'm a conveyancer in Queensland.

[Jaycee]

Just a small thing, when you're putting in a clause "subject to finance" make sure you have them write "subject to suitable finance" or something to that effect.
Reason being, you may get knocked back for the loan you're after but get accepted for one of those stupid high interest loans that should never even be on the mark IMO. So if you don't want to go down the high interest loan path (if that's all that you're able to get, which I'm sure won't be the case anyway) you may have to by law as you have finance, just not what you want.
I hope that made sense, I didn't get much sleep last night and seem to be rambling a bit

[2CheekyMonkeys]

i asked aussie about ditching them and going straight to the bank and she said it would be just as lengthy process with the bank cause its the bank and the bank staff/process which are being inunndated at the moment.

there is a 5 day cooling off period but if the bank is so busy i am presuming it will take longer than 5 days for them to accept or reject our application.

the contract asks for 21 days to get finance, i dont know if this will be enough given how long it has already taken just for pre approval.

i am pretty sure that there is a subject to finance clause but i am not 100% cause its a bit confusing the way it is written out. the agent assures us that there is one, cause we have asked him a few times to make sure it has.

so do you guys recommend we hire a solicitor/conveyancer before signing the final contract.. wont this cost us money even if the sale doesnt go through?

LOL Arimeh, i guess i do need to take a chill pill. will pm you. thanks.

sorry to be a pain. i just dont want to get into trouble for anything.

[Arimeh]

Just a small thing, when you're putting in a clause "subject to finance" make sure you have them write "subject to suitable finance" or something to that effect.

Just to clear this up - in Queensland contracts of sale, this is not necessary as in the Standard Conditions attached to the Contract already states this. Most people write in the Contract (in the finance option) how long they have for the condition, and then under the Lender part "A bank or other financial institution" just to cover themselves.

Hollo - you are more than welcome to ring me to have a chat, I dont' mind. I know how overwhelming it is !!!

Oh and I would think that 21 days for finance approval would be ok - most people go with the standard 14 days - and if it isn't long enough, then extensions of time are the way to go. I had a contract extend up to a MONTH longer for finance approval once, its just risky to ask that if the Seller has another buyer lined up. But in my experience, most sellers say yes because they want the sale to go through.

[HotI]

so do you guys recommend we hire a solicitor/conveyancer before signing the final contract.. wont this cost us money even if the sale doesnt go through?

The conveyancer doesn't really cost that much. And if the sale doesn't go through due to finance, they won't have had to do too much anway. It is later on (close to hand over) when they get copies of titles, water info etc that they come in really handy. They know exactly where to obtain everything so can do it much more efficiently than doing it yourself.

[Shalou]

Hi, it is so frustrating when this happens. We got caught in the backlog back in November when the rates first started to really fall and it took almost 5 weeks for our loan to be approved. In this time we'd put an offer in on a house which was accepted and paid the deposit because it had only ever taken a week for approval in the past. The contract gave us 14 days to get finance & a pest and building inspection, but we wouldn't get the inspections done until we knew the loan was going to go through as they are not cheap to have done and we didn't want to waste money. The real estate agent said because we hadn't met the conditions of the contract the owner could pull out of the deal or they could choose to give us an extention. Luckily for us the owners hadn't had any other offers on the house so they decided to stick with us and allow the extension. We were able to settle the loan as soon as the finance came through instead of waiting the extra 4 weeks as the owners had already started to move out. Settlement was still an extra 3 weeks over what we had initally negotiated in the original contract. I found the whole process really frustrating

We didn't use a solicitor but did use an independant conveyancer to do the land titles, rates etc because we wanted to save money on the solicitor fees. Once we had a copy of the contract we'd signed we faxed it to the conveyancer so they could start working out all the paperwork side of things like contacting the council and notifying them that the property had been sold etc. It really depends on how confident you are with reading contracts and understanding them as to whether you need a solicitor, they do charge extra than conveyancers and you need to find one that specialises in property.

[Arimeh]

Shalou

That actually doesn't apply in Queensland - in Queensland all conveyancers are supervised by a solicitor - so you still basically pay as much as a solicitor - cos you can't be a registered conveyancer up here like you can down south.

I studied down in Victoria - so I could be a registered conveyancer down there - but since I'm in Queensland - I do conveyancing - but I work under a solicitor. Cos ya have to. Its da law

[2CheekyMonkeys]

yeah shalou that situation sounds very familiar! luckily for us though the vendor situation is very complicated and they STILL havent accepted or rejected our offer yet. and even more luckily we finally got our pre-approval this week (2 1/2 weeks) i hurried them along i think cause i said we were gonna have a contract signed soon.. hehe

the property we want to buy is a deceased estate and there are three executors of the will who each get a different percentage of the cut. plus, two of them live overseas in different time zones which is hard then for them to communicate. plus, one is dead set on getting the asking price and the other two are negotiable so they are arguing and fighting amongst themselves. it has taken 2 almost 3 weeks and still they havent decided on our offer. so it has kind of worked out well in the end just very frustrating!

if aussie and banks know there is backlog then why tell us in the first place it would only take 3-5 days? if we had known we wouldnt even have started looking yet! grrr.

oh, and the real estae agent is over it too so he is negotiating for his commission to go down and he said something about he is gonna pay the contract deposit himself just to sweeten the deal? that sounds a bit dodgy to me, i dont know exactly what he said or meant cause he spoke to my partner and he didnt really understand him either.

anyway, it is a bit of a drama but feel soooooooooooo much better now that we have pre-approval!