A buyer's offer includes a condition for financing approval within 10 business days. On day 8, the buyer's mortgage application is denied, but they find a private lender willing to provide financing at a higher rate. What are the buyer's options?
Correct Answer
A) They can waive the financing condition and proceed with the private lender
The buyer has the discretion to either waive the financing condition if they're satisfied with the alternative financing arrangement, or they can choose not to waive it if the terms are unsatisfactory. Financing conditions typically allow buyers to secure financing on terms satisfactory to them, not just any available financing.
Why This Is the Correct Answer
Option A is correct because financing conditions give buyers discretionary power to determine if financing terms are satisfactory. The buyer can choose to waive the condition if they find the private lender's terms acceptable, or maintain the condition if the terms are unsatisfactory. This aligns with the protective purpose of financing conditions under provincial real estate legislation, which ensures buyers aren't forced into unfavorable financing arrangements simply because some form of financing exists.
Why the Other Options Are Wrong
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A buyer's offer includes a condition for financing approval. If the buyer's mortgage application is denied, what options does the buyer have?
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An Ontario buyer's offer has a standard financing condition: unless the buyer gives written notice that the condition is fulfilled within five business days, the offer is null and void. On day 4 the lender declines the mortgage. What is the buyer's safest course?