Conditional vs Unconditional Offers: Complete Guide
Insight
Property deals often hinge on whether an offer is conditional or unconditional. A conditional offer gives the buyer time to check the property, secure finance, confirm the title and complete due diligence. An unconditional offer commits the buyer immediately.
The difference may look simple, but the legal and financial consequences are not. This guide explains what each offer type means in practice, how conditions protect you, and when it is safe (or unsafe) to waive them.
What Is a Conditional Offer?
A conditional offer is a legally binding agreement that becomes fully effective only once certain requirements—known as conditions—are satisfied. These conditions give the buyer time to investigate the property and ensure it is suitable. Common conditions include finance approval, building inspections, meth testing, LIM and title review, sale of another property and solicitor’s approval.
A conditional agreement protects buyers by giving them the right to withdraw if those conditions are not met within the specified timeframe. The wording of each condition matters. Some require “reasonable efforts,” some require “sole satisfaction,” and some require the buyer to supply evidence. A lawyer ensures the conditions are drafted correctly so you are not forced to proceed when significant risks exist.
What Is an Unconditional Offer?
Warning: Going unconditional without completing due diligence exposes you to significant financial risk. If your lender declines finance, a building inspection reveals structural issues, or the title contains unexpected restrictions, you must still settle—or risk losing your deposit and facing damages claims.
An unconditional offer is a legally binding commitment to purchase the property with no remaining hurdles. Once the seller signs, the buyer must settle on the agreed date regardless of what is later discovered about the property, unless the seller breaches the contract.
Unconditional offers are attractive to sellers because they remove uncertainty. However, they shift almost all risk onto the buyer. If issues arise with the property, finance, insurance or title, the buyer remains responsible for completing the purchase.
Why Sellers Prefer Unconditional Offers
Sellers value certainty. An unconditional agreement eliminates the buyer’s escape routes and speeds up the transaction. In competitive markets, sellers often receive multiple offers and favour buyers who can commit quickly.
Even when the price is lower, a seller may choose an unconditional offer because it reduces the chance of delays, renegotiations or cancellations. For buyers, this creates pressure to compete by waiving conditions, but doing so without legal advice can lead to costly consequences.
When Should You Use a Conditional Offer?
Conditions are not a sign of weakness in negotiation. In many cases, they are the only practical way to protect yourself from future disputes, unexpected costs or legal obligations hidden in the property’s history.
Conditional offers are appropriate whenever there is uncertainty about the property or your ability to complete settlement. They are especially important when:
- You have not reviewed the title or LIM
- You have not obtained finance approval
- You have not conducted a building inspection
- The property is older, renovated, or has unconsented work
- The property is cross-lease, unit title, or part of a complex ownership structure
- You rely on selling your current home to fund the purchase
Common Conditions and What They Actually Cover
Warning: Building reports often uncover issues that look minor but cost tens of thousands to fix. Without a building inspection condition, you may be forced to accept those risks and costs after going unconditional.
Finance Condition
This gives you time to secure lending approval. Banks may require additional information such as building reports, updated valuations or verification of income. A finance condition protects you if the lender declines funding due to the property type, market changes or your personal circumstances.
Building Inspection Condition
A building inspection reveals structural issues, weather-tightness risks, moisture problems, foundation stability and unconsented alterations. These issues can significantly affect the value and insurability of the property.
LIM and Title Review Condition
A LIM reveals planning, drainage, consent and hazard information. A title review checks for covenants, easements, restrictions and compliance risks.
A lawyer identifies issues that may prevent future development, limit use of the land or expose you to disputes. These issues can materially affect your plans and resale value.
Sale of Other Property Condition
If you rely on selling your current home to fund the purchase, this condition prevents you from being stuck owning two properties at once.
How and When an Offer Becomes Unconditional
When a deadline approaches, buyers often feel pressure to waive conditions prematurely. This is the moment where lawyer input matters most, waiving without proper review can convert a manageable issue into a major financial liability.
A conditional offer becomes unconditional once all specified conditions are satisfied or waived. The buyer must notify the seller in writing. Once unconditional, the buyer is fully committed to the purchase.
If conditions are not met by the deadline, the agreement may be cancelled unless both parties agree on extensions or amendments. A lawyer ensures deadlines are realistic and protects you from losing the property due to administrative delays.
Risks of Going Unconditional Too Early
Warning: If you fail to settle after going unconditional, you risk losing your deposit and may be liable for the seller’s losses, including resale-related costs. This can amount to tens of thousands of dollars.
Going unconditional without completing due diligence is one of the most common causes of property disputes and financial stress for buyers.
Key risks include:
- Discovery of major defects after you are already committed
- Financing falling through due to the property type or valuation
- Title restrictions that limit your intended use of the land
- Insurance refusal due to construction type, cladding or hazard risks
- Unconsented work affecting compliance, resale and lending
- Legal disputes if you cannot complete settlement
When an Unconditional Offer Might Be Appropriate
A truly safe unconditional offer is one where the due diligence has already been completed—not one where the buyer “hopes” nothing goes wrong.
In some situations, an unconditional offer can be safe and strategically beneficial. For example:
- You have already completed due diligence before submitting the offer
- Your lender has confirmed unconditional approval
- The property is new, recently inspected or extremely low-risk
- You are competing in a multi-offer situation and want to strengthen your position
- A valuation or building report has already been supplied by the seller and verified by your own advisors
Even then, legal review of the agreement and title is essential.
How a Property Lawyer Helps
A property lawyer ensures your agreement is drafted correctly, your conditions are enforceable, and your deadlines are realistic. They interpret building reports, LIM information and title details, and advise whether it is safe to waive conditions.
They also negotiate amendments when issues arise, such as extending deadlines, reducing the price or requesting the seller fix problems. Their role is to protect you from unnecessary risk and ensure the agreement reflects what you expect to buy.
Not sure if you should go unconditional?
Before you commit, get a lawyer to review your agreement, conditions, title, LIM and building report.
A short review can prevent expensive issues later.
Frequently Asked Questions
What is a conditional offer?
A conditional offer includes clauses that must be satisfied before the agreement becomes binding. Common conditions include finance approval, LIM review, building inspection and due diligence. If conditions are not met, the buyer can usually cancel without penalty.
What is an unconditional offer?
An unconditional offer becomes binding immediately. Once accepted, the buyer must settle regardless of finance, inspections or issues later discovered. Auctions are always unconditional, and some private treaty sales encourage unconditional offers to compete with other buyers.
When should I avoid going unconditional?
You should avoid going unconditional if you do not have confirmed finance, if the LIM or building report is outstanding, or if there are unresolved issues such as unconsented works, hazard notices or title restrictions. Going unconditional leaves buyers exposed to significant financial and legal risk.
Can I renegotiate after going unconditional?
Generally no. Once unconditional, you cannot renegotiate due to issues discovered later. You are legally committed to settle on the agreed date, and failure to do so can result in loss of deposit or legal action from the vendor.
Do banks require conditions?
Banks typically require certain checks before approving finance, including a satisfactory valuation or review of the Sale & Purchase Agreement. Going unconditional without banking approval is one of the biggest risks buyers face.
You don’t need all the answers
Property issues can feel overwhelming — especially when you’re facing deadlines. Sharing a few details about your situation is enough for a lawyer to understand the context and guide you through the next steps.
Get Help Understanding Conditional vs Unconditional Offers
Whether you’re preparing to make an offer or deciding whether to confirm your conditions, sharing your draft agreement and timeline helps match you with property lawyers who can explain your legal position clearly.
By outlining any concerns about finance, LIM results, building reports or property issues, you can connect with professionals who understand the implications of making your offer conditional or unconditional.