How to handle your first conditional offer

The first offer on your home almost never arrives as a clean number. It arrives as a signed agreement wrapped in escape hatches: subject to finance, subject to a LIM, subject to a builder’s report. For a private seller, a conditional offer on a house in NZ raises an obvious question. Is this buyer committed, or just circling?

The answer is committed, with exits. Understanding those exits makes the next fortnight a great deal calmer.

A conditional offer is a signed sale and purchase agreement that binds both parties once the buyer’s conditions are met, and lets the buyer withdraw if they can’t be. Conditional isn’t sold, and it isn’t nothing: the buyer has to make a real effort to satisfy their conditions, and neither side can walk away on a whim while the clock runs.

What a conditional offer on a house in NZ actually means

Nearly every residential offer in New Zealand is written on the same document: the ADLS/REINZ Agreement for Sale and Purchase, currently in its Eleventh Edition (2022). The front page records the price, the deposit, the settlement date and the conditions, each with a deadline counted in working days. The Real Estate Authority’s consumer site walks through the agreement from the seller’s side, and it’s worth reading before any buyer gets serious.

Once you’ve both signed, a contract exists. The buyer works through their conditions by the agreed dates, and when every one is confirmed or waived, the agreement goes unconditional and the sale becomes definite. Until then the deposit sits in a lawyer’s trust account rather than your bank account, which is exactly how settled.govt.nz says a private sale should run.

Two things follow. You can’t sell to someone else while a conditional agreement stands. And the buyer can’t quietly drift off, because conditions have deadlines, and cancelling on some of them requires proof.

The conditions you’ll see on almost every offer

The finance condition is the most common. The buyer confirms their lending by a set date, and if they can’t get it, they may cancel. It’s also the condition the standard form has tightened over the years: a buyer cancelling on finance must, if asked, provide evidence that they applied for the loan and were declined (the NZ Law Society explains the change). Cold feet dressed up as “the bank said no” doesn’t survive that request. Your lawyer makes it; you don’t have to.

A LIM condition gives the buyer time to order a Land Information Memorandum from the council, the file recording consents, permits, drainage and known issues for your property. Auckland Council charges $375 and takes up to ten working days for a standard LIM, or $506 for a three-working-day urgent one; Christchurch City Council charges $320 on the same ten-day standard timeframe (fees as at September 2026). If the LIM turns up something that matters, the buyer’s lawyer raises it with yours.

A builder’s report condition lets the buyer commission a property inspection and withdraw if it reveals real problems. Under the standard form the report must be in writing from a suitably qualified inspector, and the buyer’s objection has to rest on what the report says rather than a change of heart (The First Home Buyers Club has a plain-English clause guide).

A due diligence condition is the widest of the lot: the buyer may investigate anything about the property and withdraw if not satisfied. It’s routine from buyers doing complex checks, and standard in many deadline-sale offers. Nothing wrong with accepting one; just see it clearly. An offer subject to due diligence is closer to a reservation than a commitment, so the timeframe attached to it deserves your attention.

What’s a realistic timeframe for conditions?

No rule fixes condition periods. They’re negotiated, the same as price, and counted in working days from the date of the agreement.

The practical anchors do most of the work. A LIM condition shorter than the council’s own ten-working-day processing time is a condition designed to fail, so allow that plus a few days for the lawyers to read the result. A builder’s report needs an inspector’s availability and then the written report. Finance runs at bank speed, and only the buyer’s bank knows what that is this month.

One extra timing note, for the settlement date rather than the conditions: if your buyer is using a KiwiSaver first-home withdrawal, their solicitor needs around ten working days to process it, with the funds paid to the solicitor’s trust account before settlement (Kāinga Ora explains the process). It works the same in a private sale; it just needs room in the dates.

A buyer asking for a reasonable period is normal. A buyer asking for far longer than the checks require can be asked, politely, what the extra time is for. You’re also free to counter with less.

Accept, counter, or wait

Three moves are open to you when a conditional offer lands, and signing on the spot is only one of them.

Accepting as presented is often right. If the price stacks up against recent sales in your area and the conditions are ordinary, a signed agreement with a motivated buyer beats an empty inbox.

Countering is the second path. settled.govt.nz’s guidance on counter-offers applies just as well without an agent: you can change the price, the settlement date, the chattels, the conditions or their timeframes, and send the agreement back. Be aware that a counter puts the buyer’s original offer off the table, so counter with terms you’d be content to see accepted. Every round goes through the lawyers, and nothing binds anyone until both of you have signed the same version. We’ve covered the wider negotiation game in a separate guide.

Waiting, briefly, is the third. If other buyers are active, you’re not obliged to answer the first offer within the hour. Real competing interest deserves a proper multi-offer process, which we’ve written up separately, rather than hints and delay.

How conditions get satisfied, waived, or fail

As each condition is met, the buyer’s lawyer confirms it in writing to yours. A buyer can also waive a condition that exists purely for their benefit, like proceeding without the builder’s report they’d planned on. When the last condition is confirmed or waived, your lawyer tells you the agreement is unconditional. That’s when the sold sticker becomes true, and your lawyer will tell you when the deposit can be released.

If a condition fails and the buyer cancels validly, the agreement ends, the deposit goes back to the buyer, and your house goes back on the market. It stings, and it isn’t wasted: a cancelled agreement usually tells you exactly what the next buyer will ask about, and sometimes what to fix before they do.

Your lawyer is the constant through all of it. They read the offer before you sign, they draft or check every counter, they hold the deposit in their trust account, they field the condition notices, and they ring you on unconditional day. That’s how every New Zealand property sale works, agented or not.

If you’re selling with Celby, this is the stretch of the process we’ve built the most support around. A conveyancing lawyer is included in our $8,000 flat fee: you complete a plain-English questionnaire, your lawyer drafts and finalises the agreement, and every offer, counter and condition notice runs through them. The decisions stay yours the whole way.

A conditional offer is a good day. Read it slowly, ring your lawyer, and remember that the clock only starts once you’ve both signed.

This article is general information, not legal advice — your lawyer advises on your situation.

Celby is not a licensed real estate agent. You’re selling your property privately, and all decisions about your sale are your own.

Sources

1. settled.govt.nz — Understanding the sale and purchase agreement when selling
2. settled.govt.nz — Receiving and making counter offers
3. settled.govt.nz — Selling privately
4. NZ Law Society — changes to the finance condition in the REINZ/ADLS agreement
5. The First Home Buyers Club — key clauses in the sale and purchase agreement
6. Auckland Council — order a LIM
7. Christchurch City Council — property information fees
8. Kāinga Ora — KiwiSaver first-home withdrawal