Making an offer without a financing contingency can make it more attractive to a seller. It also comes with risks.
What does it mean to make an offer without a financing contingency?
A financing contingency allows you to cancel the purchase agreement under certain conditions if you cannot obtain the mortgage you need.
Without this contingency, a rejected mortgage application does not automatically allow you to back out of the purchase.
If the statutory cooling-off period has ended and there are no other valid grounds for cancelling the agreement, the financial consequences can be significant.
Many purchase agreements include a contractual penalty of 10% of the purchase price if a party fails to meet its obligations for reasons it is responsible for, subject to the terms of the agreement.
Why is this attractive to sellers?
Sellers want confidence that the sale will go through. An offer without a financing contingency can give them greater certainty.
That’s why an offer with more favourable terms can sometimes be more attractive than a higher offer with more uncertainty.
How can you reduce the risks?
It’s worth having your finances assessed as early as possible.
The assessment should cover your income, financial commitments, available savings and other assets, and mortgage options.
A preliminary calculation or estimate is different from a formal mortgage offer.
What is OZQUR’s view?
We believe that making an offer without a financing contingency is a responsible choice only when your finances have been thoroughly assessed in advance and you understand the remaining risks.
By combining home-buying support with mortgage advice, OZQUR helps clients understand their financing options before they make an offer.
NextLevel may also offer ways to bid with greater confidence, depending on the applicable terms and whether your application is accepted.
An upfront financial assessment cannot eliminate every risk. The property’s appraised value, the lender’s requirements and any certificate conditions still matter.
Would you like to know whether making an offer without a financing contingency is right for you? Discuss your situation with OZQUR.
Recep Aslan – Independent mortgage adviser
I help expats, entrepreneurs and people in salaried employment find their dream home. My approach is simple. People first, numbers second. I listen, talk through your options with you, and give you clear, honest advice that fits your life.
