If you fail to settle, the vendor can terminate, keep the deposit, and sue for damages and any resale loss (if resold for less within 12 months). You must have funds ready by the settlement date. If the contract is unconditional (e.g. auction, or no cooling-off period), you need sufficient finance or final approval to settle. If there's a cooling-off period, you must either secure finance or rescind by its expiry — rescinding forfeits 0.25% of the purchase price to the vendor. Plan for delays in receiving funds from other sources; being unprepared risks breach of contract, deposit loss, or legal action.
NSW finance strategy and risk at a glance
| How you buy | Your finance safety net | Deposit at risk if finance fails? |
|---|---|---|
| Private treaty with cooling-off | The cooling-off window to obtain unconditional approval | Yes — you forfeit 0.25% of the price if you rescind |
| Private treaty with a Section 66W certificate | None — unconditional on exchange | Yes — the full deposit is at risk if you can't fund settlement |
| At auction | None — unconditional on the fall of the hammer | Yes — the full deposit is at risk |
| With a negotiated "subject to finance" special condition | The special condition itself | No — if the vendor agrees to it and it's satisfied; you give notice as the condition requires |
General information only — not legal advice. Conveyancing law varies by state and changes over time; confirm your situation with a licensed conveyancer or solicitor.