What does conditional on finance mean?

This is a condition in the contract that allows the buyers to walk away from the contract keeping their deposit intact if their finance application is denied by their preferred bank. This condition will only apply if it is specifically included into the contract. Make sure that you speak with your conveyancing lawyer before you sign to make sure that it is properly included. If the condition is not properly included in the contract, it could mean that the contract is not actually conditional on finance, which means that you will be putting your deposit at risk.

It is important to understand that the subject to finance clause is not a “get out of jail free” card. You cannot walk away from the contract for any other reason than that your finance is not approved. It also generally requires you to have made a genuine attempt to apply for a loan, that is, you cannot sit on your hands and expect to be able to get out of the contract. This is generally the reason why sellers will often require evidence from you that your loan application has been denied before they will let you out of the contract.