Construction contract - subject to finance?

Hi

Finally we have a contract for our build.

It is a standard Master Builders Association contract with no special conditions.

I note the contract is not 'subject to finance'. Should I be inserting this special condition?

I don't anticipate an issue but the costs to date in case of failure to execute by us are listed as 10k.

We have started the process with the broker and don't expect an issue, will be checking with solicitor but wondering how it normally works?

Can the bank approve pending we provide the signed contract opposed to the unsigned one used to assess? (Looking at Bank West).

Thanks

Well. Answer to our own question we now have conditional approval. Need to sign contract and provide a little more information.

Now having a problem with progrss payments. Builder has specified a scope of works for
Progrss payments as 16 separate sections and a specified dollar amount for each, paid monthly.

It's very detailed not really top
Ended but the bank wants a standard schedule
Or will not approve loan. Anyone heard of such a detailed payment schedule? Builder says this is the "new" way, I am concerned If they have cash flow issue etc?

Not sure about any "new" way? 16 progress payments seems way over the top.

In Victoria the progress payments are governed by the Domestics Building Act and it is normal for payments to be in 5 stages (6 counting the deposit), which is the standard lenders look for.

I don't know what other states regulations are, but ultimately the lender is the one who is lending the money, so the builder has to comply with what they require otherwise they won't get paid.

Cheers

Tom

It may depend on how complex the project is, but you should have looked at that first off.
banks are pretty strict at the moment, and they are getting tougher, here in WA. If you pull out you may loose part of your deposit as well, on work already done in the prep.Goodluck

Thanks. We got around it in the end, no problem with finance and got that approved conditional on signing contract. We went with BankWest.