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What is a conditional offer?

If your offer contains conditions that allow you to arrange finance, sell another property or engage a property valuer, then you have made a conditional offer.

There are many things to check when buying a house and these checks can be done after you have reached an agreement to buy the property - but this must be recorded in your contract.  This generally means that you will have agreed on the price for the property - subject to you being happy with the findings of your further checks (which are recorded in your contract).

It is most common to record any conditions in the agreement for sale and purchase (the contract).  Often the vendor's real estate agent will do this for you.  However, it is sensible to have your lawyer review the wording and the appropriateness of the conditions of the contract.

 

There are several good reasons for making conditional offer

  • It gives you time to check that everything is okay with the property before you are committed to buy it.  If you find something is not right, you don’t have to go ahead with the purchase, or you may be able to renegotiate your offer.

  • It allows time to arrange suitable finance to complete the purchase.

  • Even pre-approved finance may be subject to certain conditions and it may be important to allow time to satisfy those conditions by making them part of your offer when buying the property.

  • You may want to have pre-purchase building inspection done on the property or you may want to tie the purchase of one property to the sale of another property.  These things can be catered for in a conditional offer to buy the property.

  • It is common to allow at least 5 business days to satisfy all the conditions recorded in a conditional offer. Depending upon the nature of the conditions, it may be preferable to allow 10 business days or if the sale of another property is part of your offer you may need 90-120 days.