Adding conditions to a sale & purchase agreement (conditional offer) means that your offer isn’t finalised until all these conditions are met within the stated timeframe. The conditions generally provide the purchaser with a chance to complete their checks to make sure they are completely happy with the property before they commit to the purchase. Common conditions may include:
Common buyer conditions include?
A satisfactory building report: it’s highly recommended that you get a professional builders report completed on your property. They would look at the structure and condition of the property in more detail, and may also have tools available to check things you may not be able to, for example moisture levels and methamphetamine levels, if present. By including this condition in your offer, if the builder picks up anything that doesn’t meet your expectations, you can walk away.
Finance satisfactory to you: many first-time buyers make the mistake of thinking pre-approval on a home loan means that finance confirmed. This may not be the case (for example the bank may need to sign off the property you’d like to purchase) so it’s good to add this condition in that will allow you the time to go back to the bank to get confirmation.
An insurance condition: this condition tends to be used if you haven’t already established that you can get insurance on the property. Note that most finance approvals have an insurance condition built into it.
Sale of another home: if you’re needing to sell your current house before you have the funds to purchase this new house, you may want to include this condition. Another way to allow you time to do this is to include a long settlement date, giving you time to sell your home before you have to settle on this property.
Due diligence condition: this is a bit of a catch all to give you a chance to do more research about the property. In current times, it seems that 10 business days is the standard time to allow for this.
Once all the conditions are met within the specified time period, you go unconditional, which means that you’re now legally obliged to go through with the transaction.
If you’re making an unconditional offer on a property, you are offering to buy the property with absolutely no conditions attached.
With an unconditional offer, you need to be really confident in yours and your lawyers due diligence, and also have your financing sorted. If you discover any issues after the offer has been countersigned by the vendor, you may have a hard time getting out of the purchase.
You can back out of buying a house before settlement, however there can be significant consequences, depending on which stage you are i.e. is the contract conditional or unconditional? Examples of costs you may have to pay include the sellers legal fees, valuation and inspection fees.