I am selling (sub sale) my first house and got a buyer to agree to my selling fee. Agent already collected 3% earnest fee as booking. After a little over a month later, agent tells me the buyer documentation not so good, bank cannot approve them yet. So the buyer now trying to use alternative ways like getting a guarantor or having a 2nd name on the loan. Its frustrating for me as don't the buyer check if they are financially fit to buy a house that they really want first?? But that is not for me to judge.

So lets put the worst case scenario, what if the buyer tried all tricks and still cannot get the loan approval and have to back out the buying process. Now what happens next? The 3% earnest fee that they paid burn? The 3% earnest fee will give back some to the buyer and remaining will cover the lost of time between the agent and the seller? Or all 3% will give back to buyer?

First house im trying to sell and this happens, so want to know what is to be expected if things don't go according to plan (which I HOPE it don't reach this point la....).

This post has been edited by barney: Nov 4 2020, 10:56 AM

read la the booking form - is there a condition to say its subject to loan approval?

if yes, then the 3% has to be returned or you can opt to extend the deadline to give buyer more time to get loan approved..

The 3% will share between agent and seller at 40:60 split.

The 3% is considered as "booking" fee...normally this is transferred to your agent's company. In the event if the buyer could not proceed due to financial / bank, then the 3% will be given back to the buyer....
Sometimes there are many things u cannot foresee..and bank's requirement and the way they scan an individual differs from 1 bank to the other....

Do you sign anything? The booking fee is kept by agent or you or lawyer? If I'm not mistaken, if the booking fee is held by agent and you basically get nothing if the process fail.

In your case if you did not sign any S&P with the buyer. You can find other buyer

Thanks for the replies. No SNP signed as loan not approved for buyer. Agent holds the 3% fee now. Base on the agreement from agent it says if purchase decides to not proceed for what so ever reason (which I believe also implies to loan not approved), 50% of the deposit is to be given to agent and remaining to vendor.

So from your feed backs looks like all agreement is different. If we buy from developer new unit, deposit paid if loan not approved i heard some will give you back everything, if not they take a small % out of it. For agent sub sale, that i think they consider forfeited...

yup. it also differs based from you purchased from as well.

Go get new buyer.

yeah i will do that once the extended dateline also cannot met.

To be honest at present situation, most people can't get a loan.

This type of question is alway a repeatition in this section.... and the answer can never be different. Read the last here...

https://forum.lowyat.net/topic/5041455

This post has been edited by mini orchard: Nov 4 2020, 11:55 AM

I am very sure you have a copy of the booking form with you. What is stated exactly there ?

Not according to agent or you or anyone else. What you implied may not be applicable.

I believe many agents booking form will include loan rejection clause.

Provide a photo if you need further explaination.

This post has been edited by mini orchard: Nov 4 2020, 12:30 PM

Look back at the documents signed. Normally it doesnt take that long to get to know the status of loan. And if the REN is the one who assist the buyer, he/she should know the answer in less than 2 weeks.
In most cases, if buyer unable to secure a loan, vendor will have to return the earnest deposit to the purchaser. But of course, you can also argue on this matter, such as to ask for bank rejection letter(s). If they are able to provide one then you will have to return it. Do bear in mind that you need to have it stated on the Offer Letter that in the event purchaser's loan is rejected, purchaser will need to provide a rejection letter to get his earnest deposit returned. Anything that not written in any legal documentations is subject to argument and eventually will be solved under Common Law principle.