Unconditional Contract (Real Estate)
An Unconditional Contract in real estate means the contract of sale has no remaining conditions to be satisfied, and both the buyer and seller are legally bound to complete the transaction.
Once a contract becomes unconditional, the buyer cannot withdraw without serious financial consequences, and settlement must proceed according to the contract terms.
In NSW property transactions, contracts are governed under the Conveyancing Act 1919.
Simple Definition
Unconditional Contract = A legally binding sale where all conditions have been satisfied or waived.
At this stage:
- The buyer must proceed with settlement
- The seller must transfer the property
- The deposit is fully committed
When a Contract Becomes Unconditional
A property contract becomes unconditional when all special conditions have been completed or removed.
Common conditions include:
Finance Approval
The buyer’s loan must be formally approved by their lender.
Building and Pest Inspection
The buyer may include a clause allowing inspections before committing.
Cooling-Off Period Ends
In NSW, private treaty sales usually include a 5-business-day cooling-off period unless waived.
Once these conditions are satisfied or waived, the contract becomes unconditional.
Example Timeline
Property purchase: $1,200,000
Contract exchange:
1 March
Conditions:
- Finance approval (10 days)
- Building & pest inspection (7 days)
Timeline:
1 March — Contracts exchanged
5 March — Building inspection completed
10 March — Finance approved
10 March → Contract becomes unconditional
Settlement then proceeds (typically 42 days unless negotiated differently).