A subject-to-finance offer depends on obtaining finance under the contract’s terms. A subject-to-sale offer depends on selling another property and may include a 48-hour clause. A cash offer has no finance condition, even if the buyer ultimately uses borrowed money. Each option affects certainty, negotiating strength and default risk.
Key takeaways
- The written condition controls; labels such as “finance” or “cash” are not enough on their own.
- Pre-approval does not necessarily mean unconditional approval for the property.
- A subject-to-sale offer can protect the buyer but may allow the seller to keep marketing.
- A 48-hour clause is commonly calculated as two business days rather than 48 clock hours.
- A cash offer means no finance condition, not payment with physical banknotes.
How do the three offer types compare?
| Offer type | Main dependency | Potential benefit | Main risk |
|---|---|---|---|
| Subject to finance | Finance approval under the agreed wording and deadline | May protect the buyer if qualifying finance is not obtained | Applications, notices and deadlines must be followed precisely |
| Subject to sale | Sale of the buyer’s existing property | Reduces the risk of owning or funding two properties | The seller may accept a competing offer under a 48-hour clause |
| Cash or unconditional | No finance condition | Greater certainty for the seller | The buyer may still be bound if funding or valuation fails |
These are general descriptions. Special conditions vary, and the signed wording determines the legal effect.
What does “subject to finance” mean in WA?
A finance condition makes the transaction conditional on finance being obtained in accordance with the contract. The O&A may identify the lender, loan amount and latest approval date. The buyer must usually make a genuine application and comply with evidence and notice requirements.
Consumer Protection WA warns that some finance conditions can treat a loan offer from a financial institution or broker as finance approval even where the terms are unattractive. Buyers should understand the wording and, where appropriate, identify their preferred lender and required amount.
If the lender’s approval remains conditional on valuation, sale of another property or further documents, do not assume that finance is complete. Consumer Protection says finance should only be treated as approved once the lender’s conditions have been met.
What happens if finance is late or refused?
A missed finance date does not necessarily make the contract disappear automatically. Consumer Protection explains that the contract may remain enforceable until the appropriate notice is given. The precise outcome depends on the condition and communications between the parties.
If approval is delayed, tell the selling agent and your settlement agent immediately. The seller may consider an extension, but the buyer is not entitled to assume one will be granted. If finance is refused, obtain the lender’s written decision and follow the notice process required by the contract.
How does a subject-to-sale offer work?
A subject-to-sale condition links the purchase to the sale of the buyer’s existing property. The condition should identify what must occur, the deadline and the consequences if the sale does not proceed.
This can protect a buyer who needs sale proceeds or loan capacity from their existing home. For the seller, however, it creates uncertainty. The seller may therefore require the right to continue marketing the property and use a 48-hour clause if another acceptable offer is received.
What is a 48-hour clause?
A 48-hour clause commonly allows the seller to require a subject-to-sale buyer to make their offer unconditional after the seller receives another offer. Consumer Protection’s O&A guide notes that the commonly used period is not a strict 48 clock hours but the equivalent of two business days.
The buyer may need to waive the sale condition, demonstrate alternative finance or allow the first contract to end, depending on the wording. Do not waive the condition simply to keep the property unless your lender and advisers confirm that you can complete safely.
What is a cash offer?
In property negotiations, a cash offer usually means the offer is not conditional on finance. It does not mean the buyer brings physical cash to settlement. Funds still move through lawful banking, trust and electronic settlement channels.
A buyer may call an offer “cash” because they have savings, sale proceeds or another funding facility. The legal risk is that a funding problem does not usually activate a finance-condition exit because no such condition exists.
Consumer Protection warns buyers not to make a cash offer where finance is required without obtaining professional advice. A stronger offer is not worthwhile if the buyer cannot complete it.
Which offer is strongest?
Sellers often prefer fewer conditions because they provide greater certainty, but price is only one part of an offer. The settlement date, deposit, inspection conditions and the buyer’s apparent ability to complete can also matter.
The safest structure depends on the buyer’s actual circumstances. A conditional offer may be less attractive than an unconditional offer, but it can address a genuine risk. Never remove a necessary protection merely because another buyer may be competing.
How can a settlement agent help?
Appointing a settlement agent early helps identify whether the buyer name, settlement date, finance details and special conditions create practical settlement issues. Complex clause drafting, termination disputes and advice about waiving conditions may require a solicitor.
RG Settlements assists WA buyers through residential buying settlements and explains the steps and deadlines in plain English.
Frequently asked questions
Is bank pre-approval enough for a cash offer?
Not necessarily. Pre-approval may be subject to valuation, verification, the property being acceptable and the buyer’s circumstances remaining unchanged.
Can the seller refuse a subject-to-finance offer?
Yes. A seller can accept, reject or counter-offer, subject to their legal obligations and instructions to their selling agent.
Can I remove a finance condition after signing?
Only after understanding the consequences and following the contractual process. Once waived or satisfied, the protection may no longer be available.
Does a 48-hour clause always mean exactly 48 hours?
No. Common WA wording may use the equivalent of two business days. The exact signed clause must be checked.
Choose conditions that match your real position
Your offer should reflect how you will fund the purchase and which events genuinely need to occur. Clear conditions are better than optimistic assumptions.
Contact RG Settlements before signing if you want the settlement implications explained. Obtain tailored legal and lending advice where the offer structure or clause wording is uncertain.
This article is general information only and not legal or financial advice. For advice about your specific situation, please get in touch with our team.
Authoritative sources
- Consumer Protection WA – Buying property by private sale
- Consumer Protection WA – Sale by offer and acceptance guide
- REIWA – What is a 48-hour clause?
About RG Settlements
RG Settlements assists buyers and sellers with property settlement and conveyancing in Perth and Western Australia. Meet our team or request a settlement quote.