Going Unconditional: What this actually means
More than likely you’ve heard the term “going unconditional’ on a property. But what exactly does this mean and at what point of the transaction do you actually own the home?
Generally, when you make an offer on a property it will be subject (or conditional) on a number of factors. The most common ones are usually around securing finance, receiving a builders report or LIM report, or selling your current home.
There are usually specific timeframes for these conditions to be met, and once they are all ticked off, your offer goes from being a conditional offer to an unconditional offer and the contract is now binding. You are committing to buying the property and the vendor is committed to the sale.
This also means if you were to change your mind, you would be bound to the legal details signed in the Sale & Purchase Agreement and the specifications around what happens when the contract is broken (most likely this is losing your deposit, and can be a serious financial loss!)
Once you’ve ticked all the boxes and officially gone unconditional, it’s time to pay the deposit. This usually happens pretty promptly after going unconditional, so it’s important to ensure you have the funds on hand to prevent any delays. The deposit amount is always outlined in your Sale & Purchase Agreement, and is generally 10% of the deposit price, however in some cases it can be less. You need to be certain you have the funds available for your deposit, as once the Sale & Purchase Agreement is signed, you can’t change the amount.
Often some of the deposit is paid by using KiwiSaver, so you will need to be in touch with your KiwiSaver provider in advance to complete all of the paperwork. Sometimes it can take up to 20 working days for the funds to come through and be accessible, so being prepared is key. Don’t worry, we can help with this!
After the deposit is paid, it’s just then a waiting game until the settlement date. This is the date that was agreed upon when the property will legally change hands. This could be anywhere from a week or two after going unconditional, right through until a couple of months later. Again, this is agreed upon before signing the agreement.
On the day of settlement, both the funds and keys will change hands and you are now the proud new owner of the property. Generally on this day the lawyers and real estate agents take care of everything, so all you need to do is be able to pick up the keys.
While you are waiting for settlement it’s a good idea to ensure that you have your home and contents insured from the day of settlement. You’ll also need to arrange things like power and internet to click in from the day you take over the house too.
The time between having your offer accepted to going unconditional can happen pretty quickly, and usually in 10-14 days. It’s for this reason that we encourage anyone looking to buy a home to get pre-approved before they begin to look for a home. This allows most of the paperwork to be completed before putting in an offer and it also allows you to know exactly how much you can spend (and know how much the bank is willing to lend you). It also makes the whole process much smoother and stress free, rather than rushing to get it all done in a short amount of time and potentially missing out.
If you would like to buy a home in 2025, get in touch with us to start to complete the pre-approval process and get that step closer to going unconditional on your dream property.