In a private treaty sale, what does 'subject to finance' typically mean for the purchaser?
Correct Answer
A) The sale depends on the buyer obtaining approval of their loan by a set date.
A 'subject to finance' clause allows the purchaser to withdraw from the contract without penalty if they cannot obtain suitable loan approval within the specified timeframe. This protects buyers who may not secure financing.
Why This Is the Correct Answer
A 'subject to finance' clause makes the contract conditional on the buyer getting loan approval by a stated date. If approval is refused despite genuine efforts, the buyer can end the contract and recover the deposit.
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