Back when I started out broking, in the early 2000’s, it was always a standard 21 days to obtain finance approval. That was almost always sufficient.
Nowadays, the finance world is vastly different, and it’s fair to say things are generally taking longer than they used to!
I seem to remember it was within the last 10 years that I noticed the finance timeframe on purchase contracts stretching out, with 28 days becoming ‘standard’ for quite a while, until recently.
With the onset of Covid-19, combined with a multitude of policy changes, and banks generally asking more questions and requiring more paperwork, it seems to have stretched out even further in recent months. It’s not unusual nowadays to see 35 days or more, allowed for finance approval.
Ultimately - it’s a decision to be made and negotiated between yourself and the real estate agent, who will in turn discuss it with the vendor. Certainly if you want to err on the side of caution – then 35 days should give you ample time. Anything less - and you may have to look at applying through a second-tier lender, or a bank committed to turning around applications quickly. In other words - the time you allow for finance approval, can impact your choice of bank. I’m here obviously to advise you on that, and we are regularly updated by the banks, as well as all the second-tier lenders, regarding their assessment timeframes.
Your choice of timeframe also depends on whether or not your loan is preapproved, prior to you making the offer on the property. A preapproval in a lot of cases, takes care of a substantial amount of the lender’s preliminary assessment work, meaning the unconditional approval should arrive quicker, compared to if the loan hadn’t been preapproved. It’s not uncommon, if your loan is already preapproved, to be able to secure the unconditional approval within a couple of weeks, sometimes sooner.