Buying ‘Subject to Finance’ in WA: What It Really Means

You’ve found the place, made an offer “subject to finance,” and now you’re wondering what you’ve actually committed to. Can you still walk away if the loan doesn’t come through? Do you get your deposit back? It’s one of the most common worries we hear from Perth buyers, so let’s make it clear.

The short answer: buying “subject to finance” in WA means your purchase contract is conditional on you obtaining loan approval by a date set in the contract. If your finance is approved, the sale moves ahead. If it’s genuinely knocked back and you’ve met your obligations under the finance clause, you can usually end the contract and have your deposit returned.

Key takeaways

“Subject to finance” means the contract only proceeds if you obtain loan approval by the date (the “latest time”) set out in your offer and acceptance contract.
In WA, this sits in the finance clause of the standard contract published by REIWA and the Law Society of Western Australia.
You must apply for finance promptly — through a lender or a mortgage broker — and give notice of approval or non-approval by the deadline.
If finance is genuinely declined and you’ve met your obligations, you can usually terminate and recover your deposit; if you haven’t, you may put it at risk.
Consumer Protection (WA) warns buyers never to make a cash (unconditional) offer when they actually need finance, without professional advice.

What does “subject to finance” mean in WA?

“Subject to finance” is a condition in your purchase contract that makes the sale dependent on you obtaining loan approval. Until that condition is met (or waived), you’re not locked into completing the purchase — provided you follow the rules in the clause.

In Western Australia, most homes are bought using the standard “Contract for Sale of Land or Strata Title by Offer and Acceptance” (the O&A) together with the Joint Form of General Conditions for the Sale of Land. According to Consumer Protection (WA), these two documents together form the standard WA contract, and the finance terms sit in the section headed “Subject to Finance.” The O&A wording is owned by REIWA; the general conditions are owned jointly by REIWA and the Law Society of Western Australia.

When you make your offer, the contract records whether the finance clause applies and, if so, key details such as the loan amount and the latest date for finance approval.

What do you have to do as the buyer?

This is the part buyers most often miss: “subject to finance” isn’t a free pass to wait and see. You have active obligations. Broadly, you need to:

Apply for finance promptly after the contract is accepted — you can apply through a lender or, since the 2022 contract update, through a mortgage broker.
Genuinely pursue approval rather than sitting on your hands.
Give notice of whether finance was approved or not approved by the deadline in the contract.

If you don’t apply in time, or don’t follow the clause, you can lose the protection it gives you — which may leave you bound to the purchase even if finance later falls through. If you’re ever unsure what your contract requires, ask before the deadline, not after. =

What happens if your finance falls through?

If finance is approved

You (or your broker) give notice that finance is approved, the condition is satisfied, and the contract becomes unconditional. From there it heads towards settlement — the stage we handle for you as your settlement agent.

If finance is knocked back

If your finance is genuinely declined and you’ve met your obligations under the clause, you can usually end the contract and have your deposit refunded. The key is that the refusal is genuine and that you followed the clause’s requirements — applying properly and giving notice on time. Because the detail depends on your specific contract and circumstances, it’s worth getting guidance rather than assuming.

Should you ever make a “cash” offer if you need finance?

Short answer: not without advice. A “cash” or unconditional offer means there’s no finance clause protecting you — so if your loan doesn’t come through, you could still be bound to complete, and your deposit could be at risk.

Consumer Protection (WA) is blunt on this point: you should never make a cash offer to secure a property when you actually need finance, even if you’re confident of approval, without taking professional advice. In a competitive Perth market it can be tempting to drop the finance clause to make your offer stronger — just understand the risk before you do.

How can you protect yourself?

A few practical steps make “subject to finance” work for you:

Get your finance moving early. Talk to your lender or mortgage broker before, or as soon as, you make an offer.
Be specific in the clause. Consumer Protection (WA) warns that a vaguely worded finance condition could leave you bound to accept a loan on unreasonable terms. Recording details such as the loan amount helps protect you. [VERIFY: confirm current recommended fields against the live form.]
Set a realistic finance date. Allow enough time for approval; if you need longer, an extension generally requires the seller’s agreement.
Budget for the full cost. Beyond the loan, factor in transfer duty and other settlement costs — our stamp duty calculator gives you a quick estimate.
Keep everyone in the loop. Tell your settlement agent and broker promptly so deadlines aren’t missed.

Remember: your lender or mortgage broker arranges the finance, while your settlement agent handles the settlement once the contract is unconditional. They’re different roles, and lining both up early keeps things smooth. If a complex legal question comes up, that’s where a solicitor may be needed — and we’ll tell you if so.

Frequently asked questions

What does “subject to finance” mean when buying property in WA? It means your purchase contract is conditional on you obtaining loan approval by a date set in the contract. If finance is approved, the sale proceeds; if it’s genuinely declined and you’ve met your obligations, you can usually end the contract and recover your deposit.

Do I get my deposit back if my finance is declined in WA? Usually yes — provided the refusal is genuine and you’ve complied with the finance clause (applying properly and giving notice on time). If you didn’t meet those obligations, your deposit could be at risk, so get advice before the deadline passes.

Can I apply through a mortgage broker, not just a bank? Yes. Since the 2022 update to WA’s standard contract, you can make your finance application through a lender or a mortgage broker, and a broker can provide the relevant approval or non-approval notice.

Is “subject to finance” the same as pre-approval? No. Pre-approval is an early indication from a lender before you buy; “subject to finance” is a condition in your contract. You can hold pre-approval and still need formal approval for the specific property by the contract deadline.

We’ll help you through the next step

Once your offer is accepted and finance is sorted, the settlement process begins — and that’s where we come in. We’re a licensed settlement agency in Victoria Park, guiding Perth buyers through every step in plain English. If you’ve got a contract in front of you and want to understand your obligations, get in touch or learn more about how we handle a residential purchase.

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.