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Risk of making an unconditional purchase offer
24 May 2022

Are you looking at buying owner occupied or investment property in Victoria? It is essential you are aware of your rights and obligations when making an unconditional offer. Are you looking at potentially selling property? It is just as important to know how unconditional contracts can impact you as a vendor. The risk of making an unconditional purchase offer will be discussed in detail.

Each Contract of Sale is uniquely drafted to include specific conditions. It is advisable that you have the Contract of Sale and Section 32 Vendor Statement reviewed by your legal representative before proceeding to make an offer or execute documents.

The Contract of Sale may have been drafted taking into consideration that the property is being sold either at auction or through private treaty. When purchasing at auction, note that you will be making an unconditional purchase of property with no right to cool off. Similarly, if you are purchasing an off the plan property, you will be making an unconditionally offer.

If you are purchasing through private treaty, your offer may be subject to certain conditions.

Examples of conditions that may apply include:
  1. Subject to finance clause – the sale is subject to the purchaser unconditionally obtaining finance;
  2. Subject to a building inspection;
  3. Subject to a pest inspection;
  4. Subject to review of contract of sale by the purchasers legal representative;
  5. Any additional special condition the parties deem fit.

We reiterate that is important to get a Contract of Sale and Section 32 Vendor Statement reviewed before signing in order to avoid any issues arising and to mitigate any risks that may arise.

What is an unconditional contract of sale?

Going unconditional means that a purchaser is proceeding with the purchase of a property without any conditions. The purchaser is then obliged to settle on the property and cannot end the contract.  Such a contract will have specific conditions in place to reflect this.

A conditional contract means there are conditions to the purchase, this reduces the risks of a purchaser being unable to settle on time.

Private purchases of property are generally conditional contracts – however, this is not always the case. Unconditional offers can still be made on privately sold properties.

When you purchase a property at auction in Victoria, you are purchasing the property with no conditions. Therefore, the purchase is immediately considered to be a “unconditional contract”.

What are the risks associated with going unconditional?

The risks associated with making an unconditional offer privately or at auction, will depend on each persons circumstances.

Examples of risks you may face include:
  1. Finance not getting approved prior to the settlement date;
  2. Losing your deposit;
  3. Being unable to settle on time;
  4. Potentially facing additional costs – penalty interest rate and legal costs.

Can a seller cancel an unconditional contract?

The unconditional agreement can be confirmed by the vendor’s signature. If buyers have already made the unconditional offer but wish to back away from the contract, the only way to do so is if the Vendor has not signed yet and your offer to purchase is withdrawn.

How to mitigate the risks associated with going unconditional:

Know your obligations

Be aware of what going unconditional actually means. You have no cooling off period and are legally obliged to settle on the purchase.

Due diligence

It is best that any potential purchaser’s make a time to go and view the property in person before signing an unconditional Contract of Sale. Ensure that you are able to go through the entire property and conduct an in-depth inspection of the property prior to signing. Take images and video’s of the property for your reference. Some real estate agents try and rush these inspections, don’t feel pressured!

Pre-approval or having funds available

Obtaining pre-approval from your bank or lender prior to signing an unconditional Contract of Sale will provide potential purchaser’s with an indication of how much money they are able to borrow and what conditions may be applicable to their loan.

This will save time, as once you sign the unconditional contract, your lender or broker can begin the process of obtaining final approval.

It is important that purchaser’s get in contact with their lenders or brokers and discuss the bank or lender’s position on purchasing a property unconditionally and how much time they require to have the loan formally approved after the Contract of Sale is fully executed. This will increase the likelihood of ensuring all necessary unconditional finance approvals are completed.

If you are purchasing a property out-right, the risks of being unable to settle on time are reduced.

Ensure you are aware of the approximate amount of funds needed to settle so that you are able to make the necessary arrangements.

Building and pest inspection

Organising for a professional to conduct a pest and building inspection prior to signing an unconditional Contract of Sale will reduce the risk of purchasing a property that may have major defects or issues that may result in substantial costs to rectify, that may be prone to pest infestations, poor physical condition and other related issues.

Being made aware of this prior to signing will assist in ensuring that you are aware of the condition of the property and can avoid making the purchase if required.

If any issues do arise from the inspection, purchasers can then determine whether making the purchase is worth it or not, being aware that an existing home is likely to have some fair wear and tear.

Having the Contract of Sale and Section 32 Vendor Statement reviewed

Obtaining professional advice on a Contract of Sale and Section 32 Vendor Statement can ensure that purchasers are aware of any hidden issues prior to signing.

It is important that purchasers are made aware of the special conditions relating to their purchase, the potential costs associated with being unable to settle on time and the risks they may face as a result.

If exceptional circumstances arise and you have undertaken all of the above precautions and are unable to settle on time, consider other options available to you. For example – borrow money from a private lender, family member or friend. Also make sure that you obtain expert advice from a solicitor.

The Australian property market can be fiercely competitive and securing your dream home might be a daunting process. Ensure you are taking the right precautions, this will assist in making your property purchase a smooth one.

Do you need assistance with reviewing a Contract of Sale and Section 32 Vendor Statement? Contact our team on (03) 8590 8370 to obtain legal advice from our expert property lawyers and conveyancers. We can assist you with your property purchase or sale. We service all Melbourne suburbs and can also guide you through this complicated process.

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Celal has been a great supporting presence during our first home purchase. My partner and I had used Haitch Legal for... contract reviews and conveyancing needs during settlement of our home purchase. Despite having a million questions Celal was always happy to answer them and guided us through the process. Everything was made simple for us to understand which gave us the right confidence to successfully purchase and settle our first home!read more
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Halil is a long time colleague of mine and I can testify to his professionalism and quality service. He is a smooth... operator who takes the guesswork out of your purchase or sale of property.read more
Becky Bolu
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03:24 10 May 20
I have engaged Haitch Conveyancing based on their 5 star reviews and their quick response and transparent... pricing.Celal and Halil reviewed couple of contracts for me and always pointed out important matters and provided change feedback in timely and consistent manner. When I found the one, Celal has reviewed the contract very promptly and kept me updated with all the progress during settlement period. Everything was calculated correctly and he ensured all involved parties and agencies are also informed. I cant thank enough to Celal and Halil for their service and making this home buying process as easy as.I strongly recommend Haitch Conveyancing to anyone in Victoria, Australia for all property matters.read more
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23:41 01 May 20
I utilised Haitch Conveyancing for my first property purchase and they were nothing short of brilliant. They were... thorough, prompt, always had time for me, and explained things in ways I easily understood. The whole team were amazing. I'd recommend them to anyone looking for conveyancing services in Melbourne, I wouldn't go with anyone else.read more
Henry Rosel
Henry Rosel
20:10 10 Mar 20
Halil and team were nothing short of amazing! Answering queries within hours and having everything settled on time and... without hiccup.Will be using Haitch for all future settlements. Thanks again.read more
Aloka Moghe
Aloka Moghe
00:56 07 Mar 20
We knew very little about conveyancing process but Halil explained the process in detail to us and made the process... painless. Katarina was excellent with communication keeping us up to date as it progressed.Would highly recommend Haitch Conveyancing.read more
Ali Han Yenisehirlioglu
Ali Han Yenisehirlioglu
03:10 03 Mar 20
Haitch Conveyancing has provided legal services for us for a property settlement in Melbourne. Their service was very... personalized, on - time and flawless. I was able to reach them whenever i had questions and each time they took their time to explain all the relevant details to me. I would never work with any other law office for conveyancing ever again. I recommend Haitch to every Victorian.read more
Bob Airlie
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The team was fantastic, easy to deal with, everything was done electronically and via email. Can call at any time and... receive an answer to your questions.read more
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08:14 26 Feb 20
The Team at Haitch Conveyancing took care of conveyancing in a friendly and efficient manner.
Maajed Durrani
Maajed Durrani
02:39 04 Feb 20
Halil & Katarina have assisted me with my property purchase. They are efficient & easily approachable. Replies to... email are very prompt. Highly recommended for their services.read more
Le Bui
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Friendly, helpful and experienced team who is very approachable and supportive. Thank you for helping through with my... first home purchase!read more
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The service was friendly and professionally. Highly recommended.
Aisar Khoder
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23:50 05 Dec 19
Halil assisted me with my property sale. He is very approachable and efficient with his work. Very highly recommended... and fairly priced.read more
Grant Taylor
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Efficient team. They made our conveyancing process very easy
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Halil helped us with the conveyancing for the recent purchase of our first home. A potentially stressful process was... made very simple, always picks up the phone and quickly responds to emails and a very reasonable fee. Highly recommended and would work with again.read more
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Haitch Conveyancing act on my behalf as vendor. There were 2 townhouses both has settled on time perfectly. even though... there were some issues with the purchaser's bank etc. But Halil made it happened and both settled smoothly. Great service and highly recommended.read more
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Stephanie Braham
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09:40 19 Jul 19
Haitch Legal did an excellent job taking care of our property purchase settlement. They made the whole process seem... seamless. Halil and Katarina were always patient and accessible and willing to answer any question I had. Very reasonably priced too. Will use again.read more
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08:39 21 May 19
5 stars for Halil Gokler and his professional team of lawyers/conveyances.
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clean connection
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Halil & Katarina are approachable with queries. We use them for all our business dealings. Would highly recommend to... all !!!read more
Joie Goman
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02:51 25 Apr 19
Highly recommended! Halil assisted us through our conveyancing and always replied to our emails and questions... promptly. His fees are also very reasonable and explained the conveyancing process to us. Halil and his team are very friendly and professional. We would use his service again.read more
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Halil and Katerina were brilliant. Very responsive and patient with all our questions. Highly recommend.
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Excellent service with very cordial staff . Thank you for your support and assistance.
Sam Watkins
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05:59 20 Dec 18
Halil and Katrina of Haitch Conveyancing assisted us in buying our family home. They were friendly and helpful, and did... great work. We are very happy to recommend them.read more
Varun R
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04:56 10 Dec 18
Getting Halil Gokler to assist with our property purchase was the best decision we made. Halil's service and... professionalism went above and beyond his fixed quote for services. It paid off having a qualified lawyer provide this service as, when the conveyancers on the other side were incompetent and didn't settle on time, Halil was on hand with pragmatic advice to help us achieve a good outcome.read more
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We use Halil and refer our clients to him. We get good feedback. Great service with prompt response times at a... reasonable price. Highly recommend Halil and his team at Haitch legal. Thank You Halil from Demir & Co Accountants.read more
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We can't recommend Halil enough. He was fantastic in helping us with our first home settlement. We were late acquiring... his services in the process but Halil's service went above and beyond to sort everything within a tight time frame and patiently explained everything to us when we had many many questions! Made what was a tricky situation completely effortless. Highly recommend him.read more
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