All auction bidding needs to be unconditional, but many apartments are offered for private sale meaning you can negotiate a price subject to certain conditions including finance.
To understand this let’s just look at it from a seller’s or agent’s perspective for a minute. If you are buying in a competitive negotiation and your offer is subject to finance but other buyers are unconditional, then assuming the prices are similar, the owner and agent will accept the other buyers offer over yours.
If you are the only buyer or offering the highest price then you have a bit more wriggle room. Let’s say you agree a deal subject to financial approval, then the apartment needs to be withdrawn from sale for about 14 days while you go through your approval process. Again, thinking about this from the seller’s perspective this means for 14 days the owner can’t sell it to anyone else even if they get a higher offer. Also the two main marketing costs (furniture hire and internet advertising which both have a 6-week life span) are chewing up time and money. If the owner agrees to sell their apartment to you subject to finance, and your finance is not approved, then the owner has used up 14 days of valuable marketing time and cost andany other potential buyers may have moved on.
To off set this risk sometimes an owner may need a slightly higher price to compensate.
It might be prudent to negotiate subject to finance, but just be aware it can prejudice your offer. Your mortgage broker will encourage you to negotiate subject to finance but try to get as far down the approval process as possible to remove the risk.
You will generally negotiate a better price if your offer is unconditional.
There are other options, such as getting someone else (Mum and Dad Bank) as a back up in case you don’t get all your finance straight away. This way you can negotiate unconditionally which makes you a much more attractive buyer and you may even buy the apartment for slightly less because you are unconditional.
Please note, it is important to seek independent financial advice from a qualified expert beyond what is written here. We know what we’re talking about, but every situation is unique.