NSW contracts are not subject to finance unless a finance clause is added. Most buyers rely on the 5 business day cooling-off period, when they can withdraw by forfeiting 0.25% of the price. One can be added as a special condition if the seller agrees. At auction there is no cooling-off and usually no finance clause, so finance must be ready.

Finance protection in NSW at a glance
How you buy Protection if finance fails
Private sale, cooling-off Withdraw within 5 business days, forfeit 0.25%
Private sale with a finance clause End the contract under the clause’s terms
Cooling-off waived with a 66W certificate None, unless there is a finance clause
Auction None: the contract is unconditional
Off the plan 10 business days cooling-off

Why don’t NSW contracts have a finance clause?

The standard NSW contract is drafted on the basis that buyers check finance before exchanging or during cooling-off. Unlike some other states, a “subject to finance” offer is not built in. You can ask for a special condition, but sellers often prefer offers without one, so it can weaken your offer in a competitive market.

When is a finance clause worth asking for?

  • When your loan has unusual features, such as self-employed income, a guarantor or a property type lenders treat carefully.
  • When the valuation is uncertain, for example a unique home or a fast-rising market.
  • When you are waiving cooling-off to secure the property.
  • When the seller wants a longer exchange-to-settlement period anyway.

What should a finance clause say?

  1. The loan amount and, if relevant, the lender or type of loan.
  2. The date by which approval must be obtained.
  3. That you will apply promptly and do what is reasonable to get approval.
  4. How and when you must notify the seller if approval is not obtained.
  5. That your deposit is refunded if the contract ends under the clause.

Your solicitor or conveyancer drafts it; the wording matters, because a vague clause can be argued over.

What does a finance clause not protect against?

Missing the deadline, failing to apply properly, or changing your circumstances. If the approval date passes without notice, the contract usually becomes unconditional. It also does not cover a valuation shortfall unless the clause says so. The low bank valuation page explains what happens when a valuation comes in short.

How do you avoid needing one?

Get a fully assessed pre-approval before you make an offer, have the contract reviewed, and ask your broker to order the valuation early in the cooling-off period. The pre-approval page explains what a fully assessed pre-approval covers, and pre-approval before auction covers buying under the hammer. The cooling-off guide explains the 0.25% cost of withdrawing.

Questions people ask

Is subject to finance standard in NSW?

No. NSW contracts do not include one by default; it is a special condition you negotiate.

What happens if my finance falls through after exchange?

During cooling-off you can withdraw and forfeit 0.25%. After that, without a finance clause, you may lose the deposit and face a claim, so act quickly with your solicitor.

Can I buy at auction subject to finance?

No. Auction contracts are unconditional, so have finance and a valuation view settled before bidding.

Charles Touma gets your finance assessed before you exchange, so a finance clause becomes a backup rather than the plan. A free 30-minute call covers it. General information only, not legal or credit advice; a NSW solicitor or conveyancer should review your contract.

Sources: NSW Government, contracts, deposits and cooling-off; NSW Government, buying at auction, checked 18 October 2026.

General information only, not credit, legal or tax advice. Your situation is assessed properly before any recommendation. Government scheme details change; figures are current at the time of writing.