Conditions can be just about anything you specify.  They are typically things like ‘subject to a satisfactory builder’s report on the home’ (see below for more typical conditions).

If the conditions are met in the specified time, your offer then goes ‘unconditional’ – which means you’re legally bound to buy the property.  However, if the conditions aren’t met, you may withdraw your offer.

You can have as many conditions as you like.  However, setting too many will make your offer less attractive to the seller, because there’s more chance the deal will fall through.  Both you and the seller may negotiate on conditions, as well as price.

Common conditions

• Satisfactory finance – this allows you time to arrange finance for the property.  Make sure that your finance clause stipulates that the finance must be satisfactory to you, because if you have a loan approved but it is not satisfactory to you (e.g. the interest rate is higher than you are prepared to accept) the seller could force you to accept it.
• Satisfactory valuation – this allows you time to arrange a valuation by a registered valuer. It should stipulate that the valuation must be satisfactory to you.  If the valuation doesn’t meet your expectations you can withdraw your offer.
• Satisfactory building inspection – this allows you to have a builder or engineer inspect the property to establish whether there are any potential issues you should be aware of.  It should stipulate that the inspection must be satisfactory to you.
• Title search – your solicitor will normally do this, which involves obtaining a copy of the property’s title from the Land Titles Office at Land Information New Zealand.  This will show the legal description of the property and the ownership history.  It also shows any covenants, restrictions, rights of way etc. that you need to be aware of.
• Land Information Memorandum (LIM) – A LIM is available from the local authority (e.g. local council) and should highlight any potential problems such as flooding, potential erosion, zoning issues, hazardous substances on the property, and other valuable information.

Other conditions and sellers’ conditions
You can also include conditions that require the seller to do something by a specific date – for example:

• Paint the house
• Repair windows
• Remove rubbish from the section. 

While these conditions don’t usually prevent the sale from taking place they do allow you to delay settlement until these conditions are met or claim damages if they aren’t met.

There is also a catch-all condition called ‘subject to due diligence’ which can mean almost anything – but it is usually applied when you want to make improvements or additions and aren’t sure if they will be allowable by the local authority.  This gives you time to check.

Sellers may also specify certain conditions to an offer.  Most often, this will be a ‘cash-out’ or ‘escape’ clause.  This condition means that if they have accepted a conditional offer from you, and they later receive another offer (perhaps at a higher price or with fewer conditions), they can give you a deadline (typically about three days) to satisfy your conditions.  Otherwise, they can accept the alternative offer.

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