Buying property

Should I make an unconditional offer before finance approval?

An unconditional contract can put the deposit and completion obligation at risk if finance fails.

Short answer

Making an offer unconditional before formal finance approval is high risk. Pre-approval is not a guarantee because the lender still needs to accept the property, valuation, contract and current financial position. If finance is declined or delayed, you may remain legally required to complete the purchase and could lose the deposit or face further claims.

Understand what the finance condition protects

A properly drafted finance condition can give the buyer a defined period to obtain acceptable approval and a process to terminate if it cannot be obtained. Contract wording and rights vary by state and document. A conveyancer or solicitor should advise on the clause before signing.

Do not treat pre-approval as unconditional approval.
Confirm the lender accepts the property type.
Allow realistic time for valuation and assessment.
Obtain legal advice before changing contract conditions.

Auction purchases are commonly unconditional

An auction contract usually does not include a finance condition or cooling-off period. Have the legal documents reviewed, confirm available funds and discuss property acceptability before bidding. Even then, approval and valuation risk cannot be removed completely.

What can change after pre-approval

The selected property may value below the price or fall outside lender policy because of size, title, defects, location or use. Your circumstances may also change through new debt, employment, business income, expenses or credit conduct. A lender can update its rates or policy. Pre-approval helps define a range and identify issues, but final approval belongs to a specific application and property. Read every condition instead of relying on the approval label.

If the seller wants a cleaner offer

Discuss a shorter but workable finance period, stronger deposit evidence or a pre-approval update rather than removing protection without advice. The lender or broker can indicate likely assessment timing, but cannot control valuation access or guarantee approval. A legal adviser can explain alternative wording and the consequences of each option. Winning a property is not a good outcome if the contract creates a financial obligation you cannot safely complete.

Prepare before making offers

Complete a detailed pre-approval, keep the deposit accessible, avoid new credit and gather property documents early. Send the address, listing and contract details for a preliminary policy check. Arrange building, pest and strata review as relevant because finance approval does not confirm physical or legal quality. Before signing, confirm the finance amount, contribution, conditions and expiry date. The final decision on contract risk should be made with your solicitor or conveyancer.

Questions to ask before you proceed

Which approval conditions and property checks are still outstanding?
How much cash is required for the deposit, purchase costs and a sensible buffer?
Does the lender have restrictions on this property type, title, size or location?

Key takeaway

Keep a suitable finance condition unless qualified legal advice confirms you understand and can carry the unconditional risk.

Official guidance: Moneysmart: Buying a house

This is general information, not personal financial, tax or legal advice. Lending criteria, fees and eligibility vary.

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