The steps may look basic and it is really a high level approach, but there are many parties involved and it is crucial that you have a great team behind you, I’ve written an article here about building a number 1 support team when buying property. 

The most common questions I get from customers, which is mostly a question that your solicitors will get too are the following:

1. What happens when I go unconditional?
2. What happens if I don’t go unconditional?
3. What happens if I can’t settle once I go unconditional?
4. When does a property go unconditional?
5. Can you pull out of an unconditional offer?

When you’re going to open homes and you’ve finally found the property you like and want to place an offer on it. You’ll most likely have two options

1. Conditional offer (the most common one)
2. Unconditional offer 

What is an unconditional offer nz and the difference between unconditional and conditional in nz?

Simply put, it’s where you as the purchaser wants to have dibs on the property but need to do some further due diligence checks, most commonly these conditions would be

1. Getting finance approved
2. Builders report
3. LIM report

The conditions will also have a date allocated to it too, which gives you the timeframe to meet those conditions. For example, if the above all 3 conditions are subject to 5 working days. Then you’ve got 5 working days to complete those conditions, once met and you’re satisfied the conditions then you’ll let the solicitor know if you wish to proceed with going unconditional. 

It is important that you seek and discuss with a solicitor going through the contract as they’ll provide you with independent legal advice. I highly recommend you have this rather than going through the agent directly. 

These conditions are mainly for the benefit of the purchasers. Should the purchaser not meet the conditions within the timeframe then it allows the vendor (the seller) to cancel the agreement and look at accepting another offer or move onto the backup offer should there be one. 

An unconditional offer in NZ is where there are no conditions attached to the sales and purchase agreement. Here is a tip, if you’re buying through auction you need to be unconditional! Because on the fall of the hammer you’ll need to pay the deposit. 

So an unconditional signed offer automatically binds you to complete the purchase and the transaction must go through. Cancelling the agreement for any reason is not possible without consequences. Which I’ll cover below. 

Therefore, it is imperative that you have completed all your due diligence and that you are extremely satisfied and confident that you can go through with the property transaction before making any unconditional offers in NZ. 

How long can the conditional offer be valid for?

This really depends on the negotiation process, but typically it can last between 3-15 working days and in some cases 21 days. Most typically for first home buyers, it can vary between 10-15 working days as it could be dependent on them requiring withdrawing their KiwiSaver to form part of the deposit.

However, a great solicitor can assist with clauses that can assist with writing these conditions up. 

So it really depends on the purchaser and the vendor, some vendors may not like a long conditional offer such as 21 working days and accept a shorter conditional offer. 

Once the timeline is up, you’ll need to contact your solicitor and inform them if you wish to go unconditional or not. If you don’t go unconditional on the last day, then the contract becomes void and not binding. 

Remember that everything is negotiable on the Sales and Purchase agreement!!

What happens if I run out of time on my conditional offer?

If you’ve got a conditional offer for 5 working days, and you realise that isn’t enough time to get everything completed. Then you can request an extension for  1 or 3 days, most typically vendors will happily accommodate.

If the vendors or sellers aren’t going to grant you the extension, you can then either withdraw your offer or look at going unconditional basically taking risk should something go wrong, therefore, worst case is you can’t settle the property. I’d look at discussing with your team i.e. solicitors. 

How long can the unconditional offer be valid for?

If both parties are happy with the unconditional offer, once it’s signed the sales and purchase agreement is now a binding agreement/contract between the parties. 

If both parties don’t sign the unconditional, then it can be cancelled at any time. 

An unconditional offer will last until the settlement date set out on the contract. 

What happens when I go unconditional?

Once you’ve got a signed unconditional offer, then you’ll typically this is what it’d entail

Pay your deposit outlined in the sales and purchase agreement

This is where you’ll pay your deposit to the real estate agent’s trust account, they’ll give you their bank account details. Typically, this deposit amount is 10%, however, this is again negotiable.

In some cases, it can ben transferred to your solicitor’s account, which then they’ll transfer to the vendor’s (sellers) solicitors trust account. 

Therefore, it is important that you’ve spoken to your mortgage adviser or broker that you’ve got sufficient funds ready to pay this 10% deposit! Otherwise, you could look at getting penalised for not doing so. 

I’ve written a whole article about growing a fast deposit here and what happens if you only have a 10% deposit not 20% deposit here. 

Withdrawing your KiwiSaver

This is only for first home buyers who are using their Kiwisavers to pay for their property. Your solicitor will begin the process of doing this for you. How long does it take to withdraw your Kiwisaver? It can take between 10 to 20 working days to extract your Kiwisaver from your provider. 

Ideally, you should have already started this process at the same time as talking to your mortgage broker, so that there is enough time to get this completed. 

Getting your First Home Grant approved

Again similar to getting your Kiwisaver withdrawn, it is ideal you start this process early to by getting a pre approval on getting the grant and then getting your solicitor to finalise the grant. 

If you’re not sure what this is, the NZ government is helping first home owners with their deposit, anywhere up to $5,000 for an existing home or $10,000 for a brand new home.

Here is the government link to get more information, I’ve also written an article here about getting your First Home Grant. 

Finalising your loan structure and getting loan documents sent to your solicitor 

Once you’ve gone unconditional, you’re mortgage adviser/broker will be in contact to finalise the interest rates and negotiate a great cashback on your behalf. At this stage, you’ll need to decide how you want to structure your loan. Do you want to set up a revolving credit facility, fix the entire loan or do you want to split the loans up?

There are many options, so it’s best to talk to your mortgage adviser at this stage. When the loan structure is confirmed. The bank will then get the loan documents ready to be sent to your solicitor. They will then get in contact with you to go through the documents and you’ll need to sign the documents.