Should I Make An Offer Subject to Finance?

An offer subject to finance means you’re making an offer to buy a property only if your loan gets approved.

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Getting finance pre-approval

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Pre-approval process

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Managing your mortgage

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Consider it a way to protect yourself; if your finance doesn’t go through, you can walk away from the contract without losing your deposit or getting into legal trouble.

In simple terms, you’re saying:

“I’d love to buy this place, but only if the bank agrees to give me the loan I need.”

Why making an offer subject to finance is a smart move:

You’re not locked in without a loan

If your bank doesn’t give you the green light, you’re not stuck trying to buy a home you can’t afford. This clause gives you a safe exit.

It protects your deposit

If your finance falls through and you didn’t include this clause, you could lose your deposit, or worse, face legal action.

You get time to finalise your loan

Usually, you get 7 to 21 days to sort everything with your lender, including property valuations and finalising any approval conditions. When you partner with us as your mortgage broker, there is no need to rush or panic, we will guide you every step of the way.

You’re being smart, not taking risks

It shows sellers you’re serious about buying. Furthermore, you’re also doing it the right way, with your finances in check.

How long does a finance clause last?

Most finance clauses run between 7 to 21 days from the date the contract is signed, but this can vary depending on the property, the seller’s flexibility, and how quickly your lender works.

Shorter clauses might be more attractive to sellers, but only if you’re already close to full approval. If you’ve just started your finance journey, ask for the full 14 days so you’re not under pressure.

Working with one of our brokers helps at this stage. We can speed up the process with your bank, track down paperwork, chase approvals, and get updates quickly, making it more likely that you’ll meet the deadline with time to spare.

Can sellers reject an offer with a finance clause?

They can, and sometimes they will. A seller is within their rights to reject or negotiate your terms if they prefer a faster or unconditional sale.

But that doesn’t mean you’re out of the game. In a slower market, many sellers are happy to accept a finance clause because it brings them a serious, motivated buyer. In competitive markets, you may need to show pre-approval and keep your finance clause short to stay in the running.

If you’re unsure which strategy suits your situation, talk to us. We can work with your real estate agent or buyer’s agent to help frame your offer in a way that balances protection for you with appeal for the seller.

For more context on how sales methods impact negotiation, check out our guide on private sale vs auctions.

What should you do first?

Before making an offer subject to finance, it’s a great idea to work with one of our mortgage brokers to get pre-approval. This gives you a clear understanding of your borrowing power and makes your offer stronger when you’re ready to bid.

It also helps you:

Understand your borrowing limit
Estimate upfront and ongoing costs
Get realistic about your price range
Speed up the process when you find a property you love

Pre-approval is not a full loan approval, but it shows the seller that you’re serious and financially prepared. If your offer is accepted, you’ll be in a strong position to finalise your finance within the clause timeframe.

Ready to take the next step?

Not sure where to start? No worries. Our experienced brokers are here to help guide you through the process, answer any questions, and ensure you get the best deal for your situation.

Whether you’re preparing to submit your first offer or you’re comparing different lenders, we’ll be right there with you, making the home-buying journey clearer, faster, and far less stressful.

Contact us today and we’ll help you put together a smart, secure offer backed by expert advice and strong finance support.

FAQ

What exactly does “subject to finance” mean?

It means your offer is conditional on loan approval. If your finance falls through, you can exit the contract without losing your deposit or facing penalties.

What happens if my loan isn’t approved in time?

You can cancel the contract and get your deposit back, as long as you’ve met the finance clause conditions and stayed within the timeframe.

Can a seller ask me to remove the finance clause?

Yes, especially in competitive markets. You don’t have to agree, but shortening the clause or showing pre-approval can help strengthen your offer.

Is pre-approval the same as final approval?

No. Pre-approval gives you an estimate of your borrowing power, while final approval happens after the lender fully assesses your finances and the property.

Can I negotiate the length of the finance clause?

Yes. Standard terms are 7 to 21 days, but you can request more or less time depending on your situation. Sellers often prefer shorter timeframes.

Will a finance clause weaken my offer?

It can in a hot market, since it adds a layer of uncertainty. To stay competitive, have pre-approval ready and keep your finance period tight if possible.