Conditional Offer
An offer to buy a property that includes one or more conditions that must be met before the buyer is legally committed to the purchase.
What is a Conditional Offer?
A conditional offer is the standard way to buy property in New Zealand. The buyer includes conditions in the sale and purchase agreement that must be satisfied within specified timeframes before the deal becomes binding. If a condition is not met, the buyer can withdraw without penalty.
Common conditions include finance approval (typically 10-15 working days), a satisfactory building inspection (5-10 working days), a satisfactory LIM report (10-15 working days), and a general due diligence clause. Buyers can also add conditions for toxicology reports, engineer's reports, valuation, or sale of their existing property.
Each condition has a deadline (the condition date). If the buyer doesn't confirm or waive the condition by the deadline, the agreement typically lapses and neither party has any further obligation.
Why It Matters for Due Diligence
Conditions are your safety net. They give you time to investigate the property and confirm your finances before you're locked in. Without conditions, you have no contractual right to withdraw if problems emerge.
Choose your conditions carefully. Too many conditions or overly long timeframes can make your offer less attractive to the seller. Too few conditions leave you exposed. Your lawyer and real estate agent can help you find the right balance for the specific property and market conditions.
How to Check
Conditions are written into the sale and purchase agreement. Standard conditions are pre-printed in the ADLS/REINZ agreement form, and additional conditions can be added as further terms. Your lawyer should review all conditions and their timeframes before you sign.
Frequently Asked Questions
What conditions should I include in my offer?
At minimum, most buyers include finance and building inspection conditions. A LIM condition or due diligence clause is also strongly recommended. Your lawyer can advise on additional conditions for specific situations.
Can the seller accept another offer while mine is conditional?
The seller can receive backup offers, and some agreements include a cash-out clause that allows the seller to give you a set period (usually 3-5 working days) to go unconditional if they receive a better offer. Otherwise, the seller is bound by your agreement while it's live.
Related Terms
Unconditional
GlossaryThe status of a sale and purchase agreement once all conditions have been satisfied or waived, making both parties legally committed to the transaction.
Sale and Purchase Agreement
GlossaryThe legally binding contract between buyer and seller that sets out all the terms and conditions for a property transaction in New Zealand.
Due Diligence Clause
GlossaryA condition in the sale and purchase agreement that gives the buyer a set period to investigate the property and withdraw for any reason.
Settlement
GlossaryThe day ownership of a property officially transfers from the seller to the buyer and the purchase price is paid in full.
LIM Report
GlossaryA Land Information Memorandum — an official council report summarising everything the council knows about a property.
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