Resolutive mortgage conditions
Are you about to make an offer on a house? It’s a big step. We recommend including resolutive conditions in the preliminary purchase agreement. This way, you can terminate the contract without costs if you cannot meet the conditions.
In some countries, receiving pre-approval for a mortgage before purchasing a home is common. This is not common in the Netherlands. Here you can cancel the purchase under certain conditions if financing is not feasible.
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What are resolutive conditions?
A preliminary purchase agreement might sound like a contract you can easily get out of. That’s not the case. Therefore, you can include resolutive conditions, allowing you to cancel the contract. Mention the resolutive conditions when making your offer. If you cancel the contract without including resolutive conditions, you must pay the selling party 10% of the purchase price.
Three days of statutory cooling-off period
You are always entitled to a 3-day statutory cooling-off period after signing the purchase agreement. During this reflection time, you can terminate the purchase agreement without costs and without giving any reason. To make it easy, here’s an overview:
| Signed on | Cooling-off period ends at 11:59 PM on: |
|---|---|
| Monday | Thursday |
| Tuesday | Friday |
| Wednesday | Monday |
| Thursday | Monday |
| Friday | Tuesday |
| Saturday | Tuesday |
| Sunday | Wednesday |
If the cooling-off period ends on a public holiday, that day does not count, and you have an extra day of reflection time.
The two most critical resolutive conditions
Resolutive conditions are included in the purchase contract as a precaution. It remains a negotiation between the seller, real estate agent, and you. You can choose which conditions to include. But the fewer conditions, the more attractive your offer is for the seller. We won’t beat around the bush. We recommend discussing this with your mortgage advisor, so you make a smart offer.
1. Financing condition
Subject to financing, you have 4 to 6 weeks to arrange financing, i.e., to secure a mortgage. Unfortunately, if you don’t manage to do so, you can cancel the purchase without costs. Schedule a meeting with one of our mortgage advisors before making an offer so you know exactly how much you can borrow.
It’s good to know that subject to financing is a standard condition in purchase contracts of the Dutch Association of Realtors (NVM). The condition may be crossed out but must be included.
2. Technical inspection condition
It’s a wonderful idea to renovate that old farmhouse while preserving its character to your liking. If you make your offer subject to a technical inspection, you’ll know the house’s technical condition. This prevents you from paying for hidden defects or deferred maintenance you weren’t aware of.
Often, a specific amount is determined. For example, €6,000. Are the immediately necessary costs higher than this amount? Then, if the resolutive condition for the building inspection is included in your preliminary purchase agreement, you can withdraw from the sale. Or you can make new arrangements with the seller.
Like a financing condition, the technical inspection condition is standard in NVM purchase contracts. About 70% of realtors are affiliated with them. Here, too, the condition may be crossed out, but it must be included.
Tip: Offer with certainty
Want to make your bid more attractive by removing the financing condition? But would you prefer not to risk paying a deposit if the financing doesn’t come through? With an ‘Offer with certainty’, you can make an offer without financing conditions, without taking financial risks yourself.
With a certificate, we can guarantee you can get a mortgage up to a certain amount. Up to that purchase price, you can make an offer on a house without a financing condition.
Using the resolutive conditions
You and the seller agree on a period for each resolutive condition. If you terminate the agreement before this period expires, you can withdraw from the purchase without costs. This is then communicated in writing to the selling party.
Extending resolutive conditions
In some cases, you can extend the resolutive conditions until the day they expire. Discuss this with your Viisi advisor and send a proposal to the seller. Ultimately, the seller decides, so make sure your proposal is well-founded. It’s not guaranteed, and the seller is not obliged to agree.
Terminating the purchase agreement without resolutive conditions
Didn’t you include resolutive conditions in your preliminary purchase agreement but do you want to withdraw? Then, the seller is entitled to a deposit of 10% of the purchase price. A calculation: you pay €40,000 for a house with a purchase price of €400,000.
If something unexpected happens, for example, if the selling realtor doesn’t act fairly, use our legal helpline.
Advice on resolutive conditions
Discuss thoroughly with one of our mortgage advisors what’s wise in your situation. Naturally, you want to avoid paying the deposit. Otherwise, your dream house will be gone, and your savings will take a substantial hit. Schedule a non-binding appointment, and we’ll help you with your choices.