RealyConditional vs unconditional offers in NZ
Whether your offer is conditional or unconditional changes everything: how risky it is for you, how attractive it is to the seller, and what happens if you change your mind. Here's the practical difference and when to use each.
Conditional offer
A conditional offer is a binding contract subject to conditions you nominate — usually:
- Finance — typically 10–15 working days for the bank to value and approve
- LIM — 5–10 working days to obtain and review
- Builder's report — 5–10 working days
- Solicitor's approval of title — 5 working days
- Sale of own property — usually disliked by sellers
If a condition fails and isn't waived, you withdraw — no deposit lost.
Unconditional offer
Unconditional means there are no escape clauses. Once accepted, you're locked in. If you don't settle, the seller keeps the deposit and can sue for any shortfall on resale plus damages.
You make an unconditional offer when:
- You're at auction (auctions are always unconditional once the hammer falls)
- You're in a tender or deadline sale and want to be the strongest offer
- You've already done LIM, builder's report, and confirmed finance independently
Which is better for which situation
| Sale method | Typical offer type | Why |
|---|---|---|
| Auction | Unconditional | Required by auction terms |
| Tender / deadline sale | Either, but unconditional wins | Sellers compare on conditions, not just price |
| Negotiation / by negotiation | Conditional | You have time to do diligence |
| Price by negotiation | Conditional | Most flexible |
| Set sale date | Either | Depends on competition |
Cost comparison: pre-bid diligence
Doing diligence before bidding unconditionally costs $1,000–$2,000 you might lose if you miss out:
- Builder's report: $600–$1,200
- LIM (urgent): $400–$700
- Lawyer's pre-auction review: $200–$500
- Insurance pre-approval: free
- Pre-approval valuation (if bank requires): $400–$700
For high-competition properties, this is the cost of being able to bid at all.
Frequently asked questions
Can I add a condition once an offer is accepted?
Only by agreement with the seller, in writing, signed by both parties. Once you've waived a condition you can't add it back.
What happens if my finance falls through after going unconditional?
You're in default. The seller can keep your deposit, resell, and sue you for any difference plus interest and costs. Always wait until your bank has issued a written unconditional loan offer before confirming finance with the seller.
Is 'subject to valuation' enough as a finance condition?
No. Use a full finance clause that includes valuation, LVR, insurance, and lender approval. Your lawyer can draft tighter clauses than the standard tick-box.
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