# HL-Q037: Borrower journey We've found a bigger home we want to buy, but our current place hasn't sold. The bank has given us an idea of what we can borrow. What do we need confirmed before we make an unconditional offer? Borrower: Family buying before selling [Study](https://nzbrands.ai/research/banking/home-lending/) · Collected 11 October 2026 ## chatgpt Answer ID: d8b3cfe3-36c2-45fa-9b61-02bb5179166f In New Zealand, the biggest risk in your situation is committing to buy the new home before you know you can complete the purchase if your current home hasn't sold. A bank giving you an indication of how much you can borrow is not the same as having fully approved finance for this particular purchase. Before you make an unconditional offer, you want certainty about your funding, your ability to settle on time, and the legal and practical risks of the property you're buying. An unconditional offer is a serious commitment. If you sign an unconditional sale and purchase agreement and then cannot settle, you could face significant financial consequences, potentially including losing your deposit and being liable for the seller's losses. ## Your pre-offer checklist 1. Written, property-specific finance approval Ask your bank or mortgage adviser to confirm in writing that the lending is approved for the actual house you want to buy, not just that you fit within an indicative borrowing limit. Confirm: - The maximum loan amount and required deposit. - Whether approval depends on a valuation, LIM, building report, insurance or other conditions. - Whether the bank is relying on the sale proceeds from your current home. - Whether you need a formal approval letter before the offer can become unconditional. Pre-approval alone may not be enough. [Confirming your finances](https://www.settled.govt.nz/buying-a-home/making-an-offer/confirming-your-finances/)[Prepare to make an offer](https://www.consumerprotection.govt.nz/help-product-service/buying-or-renting-a-house/prepare-make-an-offer) 2. A clear plan if your existing home hasn't sold This is the critical issue in your situation. Ask the bank to assess the purchase on the basis that your current home remains unsold for longer than expected. Establish which arrangement you have: - Bridging finance: temporary lending to buy before selling. - Sufficient funds without the sale: you can fund the new purchase without relying on the proceeds. - Sale-dependent purchase: you need your current home to sell to complete the transaction. If you're using bridging finance, confirm the approved amount, duration, interest and repayment arrangements, and that you can afford both properties' costs for a realistic period. Also test what happens if your current home sells for less than expected. [How bridging finance works](https://www.bnz.co.nz/personal-banking/life-moments/how-bridging-finance-works)[Bridging finance - Buying & selling at the same time](https://www.asb.co.nz/home-loans-mortgages/buying-and-selling-house-guide.html)[Bridging Finance](https://www.anz.co.nz/personal/home-loans-mortgages/buying/bridging-finance/) 3. Your real deposit and total cash requirement Work out how much cash you'll actually have available after selling costs, repaying your existing mortgage and accounting for any other secured debt. Include: - The deposit payable under the new sale and purchase agreement. - Legal fees, valuation and inspection costs. - Moving expenses and any overlap in rates, insurance, utilities and mortgage payments. - A cash buffer if the existing property takes months to sell. Don't assume the deposit for the new house will be covered by your current home's equity until the bank and your lawyer confirm how and when those funds will be available. 4. Insurance and property checks Before committing unconditionally, arrange the checks relevant to the particular property: - Confirm suitable house insurance is available on acceptable terms, including any material exclusions. - Have a qualified professional assess the building's condition. - Review the LIM and relevant council property file, including consents for alterations. - Have your lawyer check the title, easements, covenants, ownership structure and sale agreement. Pay particular attention to flood or land risks, unconsented building work, and anything that could affect the bank's valuation or willingness to lend. [Prepare to make an offer](https://www.consumerprotection.govt.nz/help-product-service/buying-or-renting-a-house/prepare-make-an-offer)[Confirming your finances](https://www.settled.govt.nz/buying-a-home/making-an-offer/confirming-your-finances/) 5. Settlement dates and the legal agreement Ask your lawyer to check that the settlement date is workable given the purchase funding and likely sale timeline for your existing home. Confirm: - When the deposit must be paid. - Whether the settlement date can be met even if your existing property is still on the market. - What happens if either settlement is delayed. - Whether you should make a conditional offer with a finance, due-diligence or sale-of-existing-property condition instead. Your lawyer should explain the consequences of default. Once the seller accepts an unconditional offer, you generally cannot simply withdraw because your circumstances have changed. [Understanding the sale and purchase agreement when buying](https://www.settled.govt.nz/buying-a-home/making-an-offer/understanding-the-sale-and-purchase-agreement-when-buying/)[Buying property in New Zealand](https://www.settled.govt.nz/buying-a-home/thinking-of-buying/buying-property-in-new-zealand/) ## The questions I'd put to your bank before proceeding You can send your bank or mortgage adviser this message: Writing We're considering making an offer on another home, but our current property hasn't sold yet. Before we make an unconditional offer, could you please confirm in writing: 1. Whether we have full approval for the new property and the proposed purchase price, rather than indicative borrowing capacity or pre-approval. 2. Whether we can complete the purchase if our current home remains unsold, and whether bridging finance or additional lending is required. 3. The maximum amount we can borrow, the deposit required, and any remaining approval conditions. 4. How long we could comfortably carry both properties, including repayments and other costs. 5. What happens if our current home sells for less than expected or takes longer to sell. 6. What property documents, valuation and insurance evidence you need before final approval. We'd like to understand exactly what must be satisfied before we can safely commit to an unconditional purchase. ## The safest next step My recommendation is to speak to both your mortgage adviser and your property lawyer before signing anything unconditional. In particular, ask your lawyer whether a condition requiring the sale of your existing home is appropriate, or whether you can safely proceed with confirmed bridging finance instead. For further guidance, the official New Zealand resources are: - [Settled.govt.nz — Confirming your finances](https://www.settled.govt.nz/buying-a-home/making-an-offer/confirming-your-finances/) - [Consumer Protection — Prepare to make an offer](https://www.consumerprotection.govt.nz/help-product-service/buying-or-renting-a-house/prepare-make-an-offer) - [Settled.govt.nz — Understanding the sale and purchase agreement](https://www.settled.govt.nz/buying-a-home/making-an-offer/understanding-the-sale-and-purchase-agreement-when-buying/) One important question for your situation: has the bank specifically discussed bridging finance with you, or have they only given you an indication of how much you can borrow? That distinction makes a big difference to how safely you can proceed. --- ## gemini Answer ID: a37c9fe4-7d62-410d-8b03-8d5839c3e515 Before you make an unconditional offer—or more accurately, before you make an offer *unconditional*—finding a home you love while your current property is unsold requires careful coordination. Because your bank has only given you an *idea* of what you can borrow, you are not yet in a position to go completely unconditional without taking on significant financial risk. To protect your deposit and prevent you from being forced to buy a home you can't pay for, you need several critical pieces confirmed. --- ### 1. Formal Loan Approval (for the Specific Property) An "idea" or pre-approval from a bank is not a guarantee. Before removing your finance condition, your lender must formally approve the specific property. * **What to confirm:** Submit the address, Sale and Purchase agreement, and property details to your bank or mortgage broker. They need to formally approve the security (the new house) and verify that your combined lending structure (managing your current mortgage plus the new debt, or your bridging strategy) is officially signed off. ### 2. A "Sale of Existing Property" Clause (If making a conditional offer) Since your home hasn't sold yet, your primary safety net in the New Zealand Sale and Purchase Agreement is inserting a specific condition. * **What to confirm:** Work with your lawyer to draft a clause stating your purchase is **conditional on you selling your current home** and that sale going unconditional by a set date (typically 4 to 8 weeks). * **Watch out for a "Cash-Out Clause":** Vendors who accept a "sale of home" condition will often insist on a cash-out clause. This means if they get a better, unconditional offer from someone else, they can give you a short window (usually 3 to 5 working days) to drop your condition and go unconditional yourself. Discuss with your lawyer whether you could realistically pull that off if triggered. ### 3. Your True Market Value and Real Estate Strategy Relying on a rough estimate of what your current home is worth can leave you short if it sells for less than expected, forcing you to take on unexpected debt. * **What to confirm:** Have recent comparative market analyses (CMAs) done by local real estate agents, or pay for a registered valuation. Know what a conservative, realistic sale price is for your current home so you can accurately calculate your net equity. ### 4. Bridging Finance Viability (Plan B) If you find yourself in a position where you want to buy before your house sells, or if a cash-out clause is triggered, you may look at bridging finance. * **What to confirm:** Ask your bank explicitly if they will approve an "open" or "closed" bridging loan for your specific scenario. Be aware that bridging finance is expensive (often charged at a higher floating interest rate) and banks require strict proof that you have enough equity and income to service a "double mortgage" temporarily if your house takes longer to sell. --- ### Recommended Next Steps 1. **Engage a Property Lawyer:** Have them review any Sale and Purchase Agreement *before* you sign or present it, ensuring a proper "sale of buyer's property" clause is airtight. 2. **Talk to Your Lender/Broker:** Turn your "idea of what you can borrow" into a formal scenario test: *“If we buy at $X price with a conditional clause, exactly how will the numbers look if our house sells low or takes two months?”* Are you planning to submit an offer that is conditional on selling your current home, or are you looking into bridging finance to buy first? --- ## ai-mode Answer ID: 3f78365a-4560-4cdd-8bda-0c0b3bd1e5ae Making an **unconditional offer** means entering a legally binding contract with zero wiggle room. If you make an unconditional offer and your current house fails to sell, or your finance falls through, you are still legally required to settle—risking your deposit and facing serious financial penalties. An "idea of what you can borrow" from a bank is not formal approval. Before removing conditions, you need the following absolute confirmations in place: * * **Formal Written Finance Approval** : An informal or verbal indication from a bank advisor is not enough. You need formal, written unconditional approval from your lender specifically for this new property, factoring in your exact purchase price and timeline. * **Bridging Finance Arrangement** : If you need to buy before you sell, you will likely need **open bridging finance**. You must have explicit bank sign-off on how this short-term overlap will be funded, what the interest-only repayment terms are, and how long the bank will give you (often up to 6 months) to sell your current home. * **Worst-Case Exit Strategy** : Confirm what happens if your current house takes longer than expected to sell. You need a clear, realistic calculation of whether you can service both mortgages simultaneously if your bridging period expires. * **Independent Legal Advice** : Have your lawyer or conveyancer review the property's Title, LIM report, and the Sale and Purchase Agreement _before_ going unconditional. Once it's unconditional, you lose the right to back out over title defects or council file issues. * **Builder’s and Due Diligence Reports** : Ensure any physical property inspections (builders, meth testing, or toxicological assessments) are fully completed and satisfactory. You cannot use these as an excuse to pull out after going unconditional. [Tremains] * Guidance on consumer rights and processes during this phase is available on the official Settled.govt.nz portal run by the New Zealand Government. If you'd like, let me know: * **How long** your current home has been on the market * **What percentage** of your current mortgage is left to pay off I can help you break down the financial risks of an open bridging period. --- ## ai-overviews Answer ID: 3a9dc124-2522-4066-a89e-b2daa08ec2e0 Before making an unconditional offer in New Zealand while owning an unsold home, you must secure a formal **unconditional finance approval** from your lender, which specifically includes written confirmation of **bridging finance clearance** or a **satisfactory valuation** of both properties. An "idea of what you can borrow" is typically just a pre-approval, which is always subject to the bank approving the specific property you are buying and the financial structure of holding two homes simultaneously. Going unconditional means you are legally bound to complete the purchase; if your current home does not sell in time and your finance falls through, you risk losing your deposit and being sued for damages. * * * 🚨 Critical Verifications Required Before Going Unconditional 1\. Written Bridging Finance Approval If you do not plan to sell your house before settling on the new one, you need a formal bridging loan. The bank must explicitly confirm: * **Open vs. Closed Bridging:** If your current home isn't under an unconditional contract to sell, you need **open bridging finance**. Many NZ banks are highly conservative with open bridging and may limit it to 6–12 months. * **Servicability Test:** The bank must verify you can service the "peak debt" (the combined mortgages of both homes) or demonstrate that capitalised interest fits their risk parameters. 2\. Specific Property Approval & Registered Valuers Banks approve the borrower _and_ the property. Before removing your finance condition, ensure: * **The Bank Approves the New Property:** The lender will run the target property through their internal desktop valuation system. If it is a lifestyle block, unique build, or has compliance issues, they may require a full **Registered Valuation**. * **Current Property Valuation:** The bank may also require an updated registered valuation of your unsold home to accurately calculate your available equity. 3\. Property Due Diligence An unconditional offer waives your right to back out over physical or legal defects. You must confirm: * **LIM (Land Information Memorandum):** Reviewed by your solicitor to check for unconsented works, flooding risks, or zoning issues. * **Building Report:** Clear of structural issues, weather-tightness problems, or methamphetamine contamination. * **Insurability:** Written confirmation from an insurer that they will provide standard residential cover for the new property from the settlement date (crucial in high-risk flood or seismic zones). * * * ⚖️ Open Bridging vs. Subject to Sale Offer Strategy| Advantages| Financial Risks ---|---|--- **Unconditional with Open Bridging**| Highly attractive to sellers; competitive in multi-offer situations.| High "peak debt" interest costs; risk of forced fire-sale of your old home if it doesn't sell within the bridging term. **Conditional on Sale of Current Home**| Eliminates the risk of owning two homes; settlement dates align perfectly.| Less attractive to sellers; often requires paying a premium or losing out to unconditional cash buyers. * * * To help detail how to approach your bank, could you tell me: * What is the estimated **timeframe** you need to settle on the new house? * Has your current home been **listed on the market** yet? * Do you know if your bank has evaluated your target home's **LIM or title**?