Buying without financing reservation
Buying a property without financing proviso means that, as a buyer, you waive the option of cancelling the sale if you cannot get a mortgage. This means you are obliged to buy the property regardless of whether you can get the financing.
Advantages of buying without financing reservation
- Stronger position as a buyer - Sellers are more likely to opt for an offer without financing reservation, as it offers certainty that the sale will go through
- Faster completion - As no financing period is required, the sale can be completed faster
- Potentially more favourable purchase price - Sometimes a lower offer with security can be more attractive than a higher offer with risk
Risks of buying without financing reservation
- No way out if financing fails - You are legally obliged to buy the property. If you cannot pay the purchase price, the seller can demand a penalty of 10% of the purchase price
- Need more equity - Often, this strategy is only used by buyers who can pay for the property entirely with their own money or already have a binding mortgage offer
- Unexpected financial setbacks - If the bank rejects the mortgage application due to, for example, a change in your financial situation, you are stuck with the purchase
When is it wise? - If you can pay for the property entirely with your own money
- If you already have a binding mortgage offer
- If you have a very strong financial position and a rejection by the bank is unlikely
Do you want to buy a house without a financing condition? Always consult a financial adviser or estate agent to properly assess the risks!
