What Does It Mean To "GO UNCONDITIONAL" On a Property?

Understanding the process of going unconditional on a property is an important step in the journey of home ownership or property investment.

This milestone signifies your commitment to the purchase, but it also requires careful financial readiness.

As first home buyers, next home buyers, or investment property purchasers, having a solid grasp of what going unconditional entails and the financial aspects involved is key.

In this week's update, we will break down what “going unconditional” really means, helping you get through this important part of the property buying process.

What Does 'Going Unconditional' Mean?

When you make an offer on a property, it is often conditional on factors such as securing finance, receiving a satisfactory building inspection report, or selling your current home.

Once these conditions are met within the specified time frames, your offer goes from being "conditional" to "unconditional” and the deal is now binding.

This is the point where you, as the buyer, commit to moving forward with the purchase and the vendor commits to selling the property. Once the agreement goes unconditional, backing out typically involves significant financial repercussions so you need to make sure you are absolute in your decision.

How to Be Financially Prepared For Going Unconditional

Once you have ticked off all the conditions and officially “gone unconditional”, you are locked into completing the sale and it's time to pay the deposit.

You’ll need to make sure that you have the necessary funds readily available to avoid any delays.

If you're eligible to access your KiwiSaver for the deposit, you will need to reach out to your KiwiSaver provider early in the process as it can take up to 20 working days for those funds to come through (your Mortgage Adviser & Solicitor will be able to help you with this).

The deposit you pay upon going unconditional is the amount you agreed to on the sale & purchase agreement. Normally it’s 10% of the purchase price, but in some cases you can negotiate less. It’s important to note this needs to be negotiated before you sign the contract, you can't change it after the fact. Whatever the amount is, you will need to have it available to transfer to the real estate agent's trust account upon going unconditional.

The balance of the purchase price will be taken care of on settlement day by your Solicitor.

It’s also a good idea to have money set aside for all those extra costs that pop up, like solicitor’s fees, registered valuations and builders reports. These can mount up if you have made a few offers on properties and missed out. These costs still need to be paid regardless of whether you actually end up getting the property or not.

If you qualify for a cash contribution from your mortgage provider remember these funds won't be available until after settlement, so you will need to foot the bill in the meantime.

The Importance of Having Your Finance Pre-Approved Before Making an Offer

If you need to borrow money to buy a property then it's always best to get pre-approved BEFORE you start house shopping.

The main reasons are:

1). You know exactly how much you have to spend so you don't waste your time on out of reach properties and;

2). When it comes time to make an offer on a property you normally need to move fast, so by having the bulk of the approval process out of the way, all you need to do is finalise your remaining loan conditions with your Mortgage Adviser. We will also check that the bank is happy to lend against the property too.

This can make the process of going unconditional smooth and stress free as opposed to rushing to get it all done in a 10-15 day timeframe which can be hectic for all involved!

In the end, getting your head around the process, dealing with any bumps in the road, and making sure your money matters are in order for going unconditional is really important when you're looking to buy property.

Making your offer unconditional is a big deal because it means you're all in - you're legally committed to buying the place.

By being well-prepared, doing your homework, and getting advice from a Trusted Mortgage Adviser, you'll be able to handle this step with confidence. Feel free to reach out if you need a hand!

Cheers, Kyle ?? 021 638 464