How An Unconditional Offer Can Help You Beat The Competition
When negotiating in a competitive market, it can sometimes seem unfair when you hear that money just isn’t enough. One method that we employ to give our purchasers the edge is to make offers that are unconditional in nature.
What’s the difference between conditional and unconditional offers?
Firstly, it’s worth noting that laws and regulations are slightly different depending on the state or territory that you’re buying. For this article, we’re specifically focused on the New South Wales legislation.
In New South Wales, a conditional offer is an offer made which is subject to certain conditions being met. These conditions may include obtaining finance, obtaining a satisfactory building and pest inspection report, or obtaining approval for any necessary zoning or planning changes. While those listed are common conditions, a buyer is within their rights to instruct their conveyancer or solicitor to draft any condition they see fit. We’ve had clients add furniture to the transaction or specifically request that the subfloor of a house is cleaned of rubbish as a condition of purchase.
The reason you would make an offer subject to conditions is where you require additional information or assurances before committing to the purchase. This allows you to protect your interests and ensures that you only proceed with the purchase if certain conditions are met. Essentially, a conditional offer allows the purchaser an escape clause if the condition is not met.
What is an unconditional offer?
On the other hand, an unconditional offer is an offer made without any conditions attached. This means that the buyer is willing to purchase the property regardless of any potential issues that may arise during the sale process, OR they have already obtained all assurances required and are fully committed to the purchase.
Why aren’t all offers unconditional?
The catch is that once contracts exchange unconditionally, there’s no backing out. That’s why our clients obtain independent legal advice as to the ramifications of making an unconditional offer well before that offer is made.
If you’re considering making an unconditional offer on a property, its very important to carefully consider the legal and financial obligations you’ll be contracted to complete before proceeding.
Beating The Competition
Making an unconditional offer is exactly the strategy we employ on behalf of our clients where possible. But we don’t make those offers without measuring the risks. If we can obtain answers to all our questions and have complete certainty in moving forward with the purchase, then making an unconditional offer can strengthen our position substantially. In some circumstances, this allows us to negotiate 10’s of thousands of dollars off the purchase price, because it translates to absolute certainty for the vendor. Given the choice, most vendors would prefer to take a sure-thing (unconditional offer) for $10,000 less than an offer with multiple conditions attached.