First up, if you are unsure what we mean by the words conditional vs unconditional, check out this article for a bit of background.
Needless to say, making an unconditional offer on a property takes serious effort and investment.
The process of making an unconditional offer could (and should) involve:
- Speaking with your lawyer (asking them to review the title, LIM and offer document).
- Arranging unconditional pre-approval with your lender (a good mortgage broker helps with this).
- Obtaining a builders report from a reputable source.
- Carefully reading through and understanding the property disclosure statement.
- Analysing recent sales in the area and consulting valuation websites.
- Multiple discussions with other people involved in your buying process about whether this is, in fact, the right home for you. Ensuring sure you are making your decision based on emotion and logic.
Getting all of this done before you make an offer takes time and costs money.
And there is no guarantee you will get the house, even after putting in all of this effort.
So is it really necessary? Does it matter all that much? Is making your offer unconditional worth the effort?
To answer that question, we turned to Jenny Cheevers, one of Wellington’s top mortgage brokers…
Podcast: Unconditional offers – Are they worth the effort?
Buyers go to the extra effort to remove conditions from their offer because being unconditional can give you a massive advantage. Especially in multi-offer situations.
By making your offer unconditional you all solving all the owner’s problems. They don’t have an anxious wait once they accept your offer to see if you will go through with the purchase. On top of that, they can confidently go ahead and offer on other houses they might like to move to!
By being unconditional you are making it easy for the owners to accept your offer then and there.
But you shouldn’t do it without undertaking a decent amount of research first!
More about Jenny…
Note from Andrew: I have personally used a mortgage broker each time I have bought. Why? They help you get the best possible deal (and improve your chances of getting approved in the first place) as they are there to negotiate on your behalf and present your ‘case’ to the bank in the best possible light.
This can really help when negotiating interest rates and lump sum payments up front which many banks sometimes offering. Plus their service is free. A mortgage broker can also help with getting you in a position to make unconditional offers (if you want to) along with advice on how to structure your mortgage (eg. to fix or float) and how to pay it off as quickly as possible.
Jenny Cheevers is one of the best around. You can check her out on facebook here.