Going unconditional too early: A risk not worth taking

As a prospective purchaser in todays competitive property market, it's easy to feel pressure from real estate agents and Vendors to make an unconditional offer on a property or to go unconditional before it is safe to do so. We understand the motivation: going unconditional can make your offer more "attractive" and give you an edge over other buyers submitting conditional offers.

However, this is one of the most common (and costly) mistakes we see purchasers, especially first homebuyers, make.

What Does “Unconditional” Mean?

A contract becomes unconditional when all conditions of the Contract have been satisfied. At this point, the purchaser is legally bound to complete the purchase, regardless of what happens next.

Therefore an unconditional offer, is one that is made without any conditions.

This means that if something goes wrong (such as finance falling through) the purchaser generally cannot withdraw from the Contract without suffering significant financial consequences.

The Biggest Risk: Finance Approval

The most common issue arises when buyers make an unconditional offer when they are reliant on obtaining loan approval to complete their purchase or, when buyers go unconditional before receiving formal, unconditional loan approval from their lender.

It’s important for buyers to understand that:

• Pre-approval is NOT a guarantee of finance

• Conditional approval is NOT formal unconditional approval

• Banks can and do decline loans late in the process

Therefore it is pertinent that your offer is made subject to finance and that you do not go unconditional until you have formal unconditional loan approval.

If you go unconditional without unconditional loan approval and your loan is later declined, you will still be required to settle. And if you cannot settle due to a lack of funds, you will be up for some serious financial consequences.

What Happens If You Can’t Settle?

Failing to complete a contract after it becomes unconditional can have serious consequences, including:

• Loss of your deposit

• Liability for penalty interest

• Legal action from the vendor to claim compensation for additional losses they incur including (but not limited to):

  • Any shortfall on a resale

  • Agents commission

  • Legal costs

  • Penalties payable to a third party if they have a linked settlement

  • Interest on a mortgage

  • Accommodation & removalist costs

  
  

This is not just a minor setback—it can be financially devastating.

Other Conditions to Consider

Finance isn’t the only condition that matters. Purchasers should also consider whether their offer should be made subject to other conditions such as:

• Building and pest inspections (we always recommend this)

• Due diligence enquiries (e.g. zoning, planning restrictions)

• Review of the contract and vendor statement

• Any other special conditions affecting the property

  
  

Waiving these too early can expose you to risks that may only become apparent after it’s too late.

Why the Pressure?

We often hear that buyers feel pressured by agents or vendors to go unconditional quickly to “secure the deal.”

While this pressure is understandable in a competitive market, it’s important to remember:

• The contract is not just a formality - it is a legally binding document and should not be taken lightly

• The contract provides a lot of protection for Vendors, and not much for Purchasers

• Taking a few extra days to ensure everything is in order is almost always worth it

  
  

Our Recommendation

At Willerbys, our recommendations are simple:

1. If you are getting a loan - make sure the Contract is subject to finance. Do not make an unconditional offer on a property if you are reliant on getting unconditional loan approval to be able to complete the purchase.

2. Do not go unconditional on the Contract until you have received formal, unconditional loan approval and are satisfied with all other conditions of the Contract.

3. Auction Contracts are unconditional from the get-go so we recommend avoiding purchasing at auction if you are reliant on obtaining loan approval to complete the purchase.

4. We recommend making your offer subject to a building & pest condition so that if there are any major structural defects or major pest infestations, these are identified before the Contract becomes unconditional & gives you the opportunity to end the Contract to avoid these issues becoming your problem.

5. Always have the Contract reviewed by a lawyer BEFORE signing to ensure your interests are protected.

6. If you are unsure at all about how to proceed - seek legal advice.

Final Thoughts

Buying property is one of the most significant financial commitments you will make. We understand the market is very competitive right now and you may be tempted to make an unconditional offer to "sweeten the deal". But you must ask yourself - is it really worth the risk?

If you are unsure whether it is safe to make an unconditional offer or to proceed unconditionally, it’s always worth getting legal advice before making that decision.

The team at Willerbys Solicitors is here to guide you through the process and help you avoid unnecessary risk.