Property due diligence
The risks of an unconditional offer
Why removing finance and inspection conditions doesn't remove the underlying risk — it just moves who carries it, from the contract onto the buyer personally.
- Loan pre-approval is not final, unconditional loan approval, and doesn't commit a lender to fund a specific property.
- A lender valuation can still come in below the contract price after an unconditional offer is accepted, leaving the buyer to cover any shortfall.
- Undiscovered building defects and insurance difficulties remain the buyer's risk once conditions are removed.
- A deposit paid on an unconditional contract is generally harder to recover than one held under a live condition.
Removing a condition doesn't remove the risk
A private-sale buyer can negotiate conditions such as finance naming the lender, the sale of an existing property, or a satisfactory building or pest inspection (Consumer Affairs Victoria, verified 30 Jul 2026); an auction contract is generally unconditional from the buyer's side unless the seller specifically agrees otherwise beforehand (Consumer Affairs Victoria, verified 30 Jul 2026). Making an offer unconditional, or bidding at auction, doesn't make the underlying risks disappear — it just moves who carries them, from the contract's conditions onto the buyer personally.
Pre-approval is not the same as being ready to settle
Loan pre-approval is an indication a lender may be willing to lend up to a certain amount, based on the information provided at the time — it isn't final, unconditional approval, and it doesn't commit the lender to fund a specific property. A lender still needs to value the actual property, assess it against their policy, and issue final approval before settlement funds are available. Removing a finance condition on the strength of pre-approval alone shifts that entire risk onto the buyer.
What else stays a risk after removing conditions
A lender valuation can come in below the contract price, leaving a funding shortfall the buyer has to cover in cash. Insurance may be more expensive or harder to obtain than expected once a specific quote is requested. Undiscovered building defects remain the buyer's risk, subject to whatever legal rights may separately apply. And a deposit, once paid on an unconditional contract, is generally harder to recover — it's held in trust and released to the seller under specific rules (Consumer Affairs Victoria, verified 30 Jul 2026), not returned simply because the buyer changes their mind.
Worked example
A buyer has loan pre-approval for $700,000 and is under pressure to make an unconditional offer to compete with another bidder. They check with their broker first: the pre-approval was based on estimated figures and hasn't yet had the specific property valued. They keep the finance condition rather than remove it on pre-approval alone, and ask their broker how long final approval would realistically take for this specific contract.
Practical checklist
Before removing a condition or bidding unconditionally
- Confirm with your lender or broker that pre-approval, not just an estimate, applies to this specific property
- Get an actual insurance quote for the property, not a general estimate
- Complete the building and pest inspection and any specialist follow-up first
- Understand exactly what happens to your deposit if something goes wrong afterwards
- Ask your conveyancer what legal protection, if any, remains once the contract is unconditional
Questions for a professional
- Is my finance genuinely ready to fund this specific property, not just pre-approved in principle?
- What deposit protection, if any, remains once I remove this condition?
Official resources
Sources and methodology
- Buying property by private sale — Consumer Affairs Victoria (retrieved 30 Jul 2026)
- Buying property at auction — Consumer Affairs Victoria (retrieved 30 Jul 2026)
Figures on this page are drawn from Delora's local knowledge graph, refreshed from these primary sources and checked for changes on a regular schedule. If a figure here looks out of date, the official source above is always the authority — please let us know.