Can I accept another offer while the first one is conditional?

Not unless the agreement lets you. Once you sign a conditional agreement you're bound to that buyer while they work through their conditions. A cash-out clause (sometimes called an escape clause) is the tool that keeps a back-up option open — ask for one whenever a buyer's condition depends on selling their own home.

What is a cash-out clause?

A clause that lets you keep marketing the property and, if you receive another acceptable offer, give the first buyer a short notice period — commonly two to five working days — to confirm their agreement unconditionally or step aside. It's standard when a buyer's offer is conditional on selling their own property.

What does 'due diligence' as a condition mean?

A catch-all condition that lets the buyer investigate anything they like and pull out for any reason during the period. It's the weakest condition from a seller's point of view because it's effectively an option, not a commitment. It's reasonable on complex or development properties; on an ordinary home, push for specific conditions instead.

Who holds the deposit?

Usually the agency, in its trust account, until the agreement is unconditional. It is then normally released — less commission — to your lawyer. If the buyer cancels under a genuine condition, the deposit goes back to them.

Conditional offers explained: what NZ sellers need to know

Finance, builder's report, LIM, sale of the buyer's home — what each condition means for you, how long it takes, and how to protect your position.

Most offers on New Zealand homes arrive with conditions attached. Understanding what each one means — and how to hold your position while a buyer works through them — is the difference between a sale that settles and one that quietly falls over three weeks later.

The document you’re signing

Offers are made on the standard Agreement for Sale and Purchase (the ADLS/REINZ form). Conditions are written into it, each with a time limit. When you countersign, you have a binding agreement that only becomes unconditional once every condition is satisfied or waived. Until then, the buyer can usually cancel if a condition isn’t met; you generally can’t.

Your agent must give you the Real Estate Authority’s approved sale and purchase agreement guide before you sign, and you should have your lawyer check any offer before you accept it. That’s not caution for its own sake — the wording of a condition decides how easily a buyer can walk away.

The common conditions, from a seller’s point of view

Finance

The buyer needs their lender’s approval. Typically 5 to 15 working days. Low risk if the buyer already has pre-approval; higher risk if they’re a first-home buyer, self-employed, or the lender will want a registered valuation. Ask the agent what the buyer’s lending position is before you accept — a good agent will already know.

Builder’s report (building inspection)

The buyer commissions a pre-purchase inspection. Usually 5 to 10 working days. The wording matters: “satisfactory to the purchaser” gives the buyer a wide exit, and some buyers use a minor finding to renegotiate. A sensible middle ground limits the buyer to cancelling only for defects that are material. If you know the property has issues, disclose them up front and price accordingly — a surprise in a builder’s report costs more than a known one.

LIM (Land Information Memorandum)

The buyer orders a report from the council on consents, zoning, hazards and anything on the council’s file. Councils take up to 10 working days, so this condition often sets the pace. If you obtain a LIM before listing and have it available to buyers, you shorten every conditional period and remove a reason for buyers to hesitate. It costs a few hundred dollars and is one of the best-value things a seller can do.

Sale of the buyer’s own home

The buyer must sell their existing property first. The riskiest condition because you’re now waiting on a sale you don’t control, and the timeframe is often four to eight weeks or more. Never accept this condition without a cash-out clause (see below) and a realistic view of how saleable the buyer’s property is.

Solicitor’s approval

The buyer’s lawyer reviews the title and agreement. Short, usually 3 to 5 working days, and normally limited to conveyancing matters — check the clause doesn’t let the lawyer reject the deal for any reason.

Valuation

The buyer’s lender wants a registered valuation to support the loan. Increasingly common. 5 to 10 working days. If the valuation comes in below the price, the buyer may try to renegotiate; whether you agree depends on what your other options are.

Other conditions you’ll see

Toxicology (meth) testing, engineer’s reports on hillside or older properties, insurance confirmation (particularly on properties with known weathertightness or land risk), and OIO consent for overseas buyers. Each is reasonable in the right situation; each needs a tight timeframe.

How to protect your position

Keep conditional periods short. Ten working days is enough for most buyers to complete finance, a builder’s report and a LIM in parallel. Agree to longer only for a good reason.

Ask for a cash-out clause whenever the buyer needs to sell their own home. It lets you keep marketing and gives the first buyer a short window to go unconditional if a better offer arrives.

Get the deposit terms right. The standard is 10%, paid on signing or when the agreement goes unconditional. A deposit paid on signing shows commitment; a deposit only on going unconditional costs the buyer nothing if they walk away.

Prefer specific conditions to a general due diligence clause. A buyer who wants three weeks to “do their due diligence” on an ordinary suburban home is asking for an option, not making an offer.

Compare offers on certainty as well as price. A slightly lower cash or lightly conditioned offer often beats a higher offer with a sale-of-home condition. Your agent should model both for you: probability of settling, likely timeframe, and what happens to your plans if the higher offer falls over in week four.

Multiple offers

If more than one buyer is interested, your agent should run a multi-offer process: every buyer is told there are other offers, each submits their best offer in writing by a set time, and you choose. You are not obliged to take the highest price, and this is where conditions matter most — a clean offer at $940,000 can be a better decision than a heavily conditioned offer at $960,000. A good agent will lay the offers side by side and walk you through the trade-offs rather than just pointing at the biggest number.

What happens next

Once every condition is satisfied, the buyer’s lawyer confirms in writing and the agreement is unconditional. From that point the buyer is committed and the deposit is generally non-refundable. Your agent’s commission becomes payable, settlement is fixed at the date in the agreement, and your lawyer handles the transfer of title and funds on the day.

Summary

Conditions are normal. Short timeframes, specific wording and a real deposit are what protect you.
Order a LIM before you list — it speeds up every buyer.
Never accept a sale-of-home condition without a cash-out clause.
Judge offers on the probability of settling, not just the headline price.
Have your lawyer read every offer before you sign.

Handling conditional offers well is a skill, and it’s one of the clearest differences between an experienced agent and a new one. If you’d like to know which agents in your area have the track record to negotiate this well, start here. It’s free and there’s no obligation.

This guide is general information for New Zealand home sellers and not legal advice. Check anything that matters to your sale with your lawyer.

This guide is general information for New Zealand home sellers, not legal, tax or financial advice. Check anything that matters to your situation with your lawyer or accountant.