As we all know know if we pay any amount money to Real Estate Agent or Builder is non-refundable ( unless they confirm )
We always encourage everyone ( clients) NOT to pay any excess money other than initial deposit money i.e 0.25% or booking fee before getting unconditional approval. After getting unconditional/ final approval, we will let your solicitor/conveyancer know & your solicitor will inform you to pay 5% or 10% deposit. Then only make a paymentExceptional case would be buying in Auction, if you win in Auction, you have to pay 10% of the property value straight away or Buying off the plan property. ( note: always discuss with your solicitor/ conveyancer before signing 66W form)
Scenario: 1You have pre approval and you are sure that you will get final approval and you paid 10% deposit to agent. But what if there is some issue on land or even in contract and Bank said, we don’t want to fund any money to this land or builder? We have to submit application to new bank and it is completely new process. In worst scenario, we may lose our money.
Scenario: 2 ( in case of construction )Doing Land Loan First & Construction as a separate new loan:=> In this situation, we have to declare our rental expense which will bring our borrowing capacity of loan down PLUS what if your situation changed suddenly in couple of months or Bank said, we don’t want to fund/lend to this builder because of XYZ condition in contract?
That is why, It is easy to follow process, LIKE: A) Get Pre Approval. B) Pay initial deposit. C) Order valuation. D) If valuation is all good, apply for unconditional/final approval. E) After getting Final Approval, talk to us and solicitor, then only pay other deposit ( 5% or 10%). F) After that we will sign docs and get ready for settlement.