Have you signed a purchase agreement for your main, secondary or rental residence and need a mortgage to finance it? The sales agreement must therefore mention a suspensive clause for obtaining a loan. For this, your notary or real estate agent asks you for information concerning the loan that you are going to apply for but you do not know what to answer them?
No worries, we explain very simply in the rest of the article what is really used the condition precedent of obtaining a loan, and how to fill it to favor your interests rather than those of the seller.
The condition precedent of obtaining a loan was created to ensure the security of the buyer. You just have to fill it out.
Released, delivered … The buyer is secure!
All real estate sales are carried out in two stages:
- The first step is the signing of a preliminary contract (compromise, reservation contract or promise to sell);
- The second step is the signing of the final deed of sale at the notary, which makes you become the owner.
At the preliminary contract stage, it is rare for the buyer to have the funds necessary to acquire the property of his dreams. The legislator, grand prince, decided to protect him from the seller when his purchase depends on obtaining his mortgage.
In this case only, the inclusion in the sales agreement of a suspensive clause for obtaining a loan is compulsory. It will thus allow the purchaser to be able to renounce the acquisition without penalty because the non-fulfillment of the suspensive condition renders the preliminary contract void.
The suspensive clause of obtaining a mortgage therefore protects the purchaser who, if he cannot obtain the mortgage necessary to finalize the sale, has no risk of losing the immobilization indemnity or the receiver , which must automatically be returned by the notary.
But under what conditions?
If the suspensive clause of obtaining a loan protects the purchaser, it is still necessary to respect certain conditions so that he can give up his purchase for free. It would be too easy otherwise ?
The suspensive clause of obtaining a loan mentions the main characteristics of the loan that the buyer will have to request , namely:
- the amount of the loan;
- the interest rate ;
- the term of the loan;
- a completion deadline.
This information must be considered very carefully for the purchaser who signs his compromise. Because it is if and only if the purchaser does not manage to obtain the conditions mentioned in the compromise within the time limit that he can retract for free.
Therefore, if the buyer does not manage to obtain his loan or obtains a loan on less advantageous terms than what is indicated in the compromise, he will have the capacity to abandon his acquisition without penalty. However, he must provide proof of having consulted several banking establishments (at least 2 in most cases).
Conversely, if he obtains better conditions than what is written in the suspensive clause of obtaining a loan, he will be bound to the seller and will have to regularize the final sale. He will not be able to retract.
You will understand, the seller’s interest is to mention the requested loan rate as high as possible to secure his sale as much as possible. And for the buyer, it is the opposite.
The law requires the purchaser to do everything to obtain his loan on the conditions indicated within a time limit, which must be at least one month. Rest assured, getting a mortgage in one month is clearly impossible given today’s banking deadlines ?
This is why the deadline entered in the condition precedent was extended by real estate practitioners to be brought today to 45 days or 60 days. Again, this period is important for the buyer who must build his file, deposit it in the bank, obtain a loan agreement and then his loan offers within the time limit!
Advice from a friend and a mortgage expert: from the creation of a loan file, it takes about 1 and a half months to obtain a loan offer when a loan request is managed by an expert mortgage. Mentioning 60 days to obtain credit in the suspensive clause of obtaining a loan is therefore not too much!
As you can see, the drafting of the suspensive clause for obtaining credit should not be neglected. It is a key element still too little known by buyers to date !!