If you are buying a home in Perth and your offer is subject to finance, it means your purchase depends on your lender formally approving your loan before settlement. It is a standard clause in many contracts, but if you do not understand how it works, or what can go wrong, it can cost you time, money, or even the home you have set your heart on. Let me break down how it works in WA, the risks, and how to get it right.

How the Subject to Finance Clause Works in WA

When you submit an offer on a property, you can include a finance condition, typically around 21 days, which gives you time to secure formal loan approval from your bank or broker. If your finance is approved within that timeframe, the deal becomes unconditional. If your finance is declined, you can withdraw without penalty, provided you do so within the terms of the contract. It is a sensible protection, and most buyers should not be in a hurry to give it up.

Key Things You Need to Know

A few points trip buyers up more than any others, so it is worth being clear on each before you sign anything:

  • Pre-approval is not full approval. Being pre-approved does not mean your lender will say yes to the specific property, particularly if there are concerns with the valuation.
  • Timing is critical. If your finance clause expires and you have not secured approval, the seller can terminate the deal or push you to proceed without protection.
  • Valuation can derail things. Even if the purchase price is fair, your lender may value the property lower, which can reduce your borrowing power or end the deal.
  • Seller confidence matters. In a hot market, sellers often favour unconditional or finance-approved buyers, so a clean, well-prepared offer carries weight.

The biggest risk is not the clause itself, it is the calendar. Treat your finance approval as a deadline to be managed, not a formality to be assumed.

How to Strengthen a Subject to Finance Offer

You do not have to choose between protecting yourself and presenting a strong offer. With a little preparation, you can do both:

  • Get written pre-approval from your lender before you start making offers
  • Keep your finance period short and realistic, often around 14 to 21 days
  • Make sure your broker or bank is briefed and ready to act quickly
  • Be honest with your agent about your position, because it helps everyone work towards the same outcome

Buying With Confidence

A subject to finance clause is there to protect you, and used well it does exactly that. The buyers who run into trouble are usually the ones who treat it casually, leave their finance to the last minute, or assume pre-approval is the finish line rather than the starting point.

If you are weighing up an offer and want to make sure your finance condition is structured the right way, call me directly on 0410 144 211 or reach out through our contact page. Happy to talk it through.

Riley Walker

Riley Walker

Sales Executive, Perth Property Partners

Riley holds a Bachelor of Commerce in Property and Marketing from Curtin University, bringing an analytical lens to pricing strategy and buyer behaviour, paired with a creative, modern approach to marketing every home.