For most prospective property buyers, the purchase depends on obtaining a mortgage from a bank. This is why prospective buyers often include a condition precedent in their offer to protect themselves if their mortgage application is declined.

Although very common, this condition precedent can sometimes irritate sellers who wish to sell their property as quickly as possible and fear that the prospective buyer may use it as an excuse to withdraw.

To prevent this from happening, it is important to word this condition precedent correctly so that the sale is secured if the prospective buyer is indeed able to obtain a mortgage from a bank.

How?

1. Specify in the condition precedent the amount to be borrowed.
2. Specify the terms for obtaining the mortgage: it is important that the terms stated are realistic! In other words, the mortgage term and interest rate must be achievable and therefore in line with the market.
3. Specify the minimum number of banks the buyer must approach for their mortgage application. You can even require the buyer to apply to three specified banks. If a bank declines the application, the prospective buyer must be able to provide evidence of the refusal.
4. Set a deadline by which the prospective buyer must inform the seller whether or not their mortgage has been approved: three weeks appears to be the minimum timeframe; if this deadline cannot be met, it is up to the prospective buyer to prove why!

source : Property Tips & Advice