There is a way to rescue the sale of a property when the buyer’s home loan application has been rejected. It’s called a Kustingsbrief, a Dutch word that literally translates into ‘kissing letter’. Essentially, it is a type ofwhereby the purchaser registers the bond in the name of any third party – most often the seller – who lends money to the purchaser, but only if the purchaser can pay a 50% deposit of the purchase price.
The Kustingsbrief is helpful in that it avoids third-party loans and high interest rates, as well as the possibility of incurring additional costs such as a further bond. It provides high protection and assurance that the purchase price will be paid in full and that the property transaction is secure.The sale is rescued to everyone’s benefit, and buyers are assured they have secured finance.
Sellers only receive funds over a period of time as per the agreed instalments; in some cases, this may be up to 20 years.Sellers also need to be assured that the buyer is creditworthy, especially considering traditional bank financing has been rejected, and may request other forms of security or suretyships.
Failure to ensure the transfer of the property within the three months does not necessarily mean the entire deal is cancelled, although the purchaser does have the right to cancel the agreement at this point and can recover all payments and associated interest.