Unconditional Contract | Urgent Actions Before Settlement

Once an unconditional contract is signed, the settlement becomes legally binding. It’s crucial to act quickly. But, when does a contract become unconditional in QLD? Learn the critical actions you need to take to protect your investment, ensure a smooth process, and avoid common mistakes that could lead to serious financial consequences.

In the heat of a property deal, an unconditional contract is often presented as the winning move to secure a home quickly. Real estate agents love them because they speed up sales. But what they rarely explain is how exposed you are the moment you sign.

Before you rush into a binding deal, here are five hidden risks of an unconditional contract that you absolutely must understand:

1. You Lose Your Right to Walk Away

Once you sign an unconditional contract, you lose the key protections that a conditional offer provides. If something unexpected arises, like financing falling through, discovering property damage, or simply changing your mind, you have no automatic legal right to withdraw.

This means you’re locked in, no matter what. Walking away could mean losing your entire deposit, facing lawsuits, or being ordered by the court to complete the purchase.

Buyer tip: Never assume you’ll “sort things out later.” Always ensure your finance is 100% approved and inspections are completed before committing.

2. No Finance Approval = Massive Personal Risk

Many buyers mistakenly believe that “pre-approval” from a bank means they are safe to sign. It doesn’t. Final approval often depends on the bank’s valuation of the property and updated financial checks. If the property is valued lower than the purchase price or if your circumstances change, the bank may refuse to lend you the full amount.

If that happens after signing an unconditional contract, you are personally responsible for coming up with the shortfall — potentially tens of thousands of dollars — or you risk losing your deposit and being sued for breach of contract.

Buyer tip: Only ever sign an unconditional contract after receiving formal, unconditional finance approval from your lender. Not just a pre-approval letter.

3. No Safety Net for Building and Pest Issues

When you agree to an unconditional contract, you give up the right to make the deal dependent on satisfactory building and pest inspections. If major issues like termites, rising damp, structural defects, or asbestos are discovered later, it’s too late. You’ll still have to buy the property and pay for repairs out of your own pocket.

What’s worse, some defects can cost tens or hundreds of thousands to fix, seriously impacting your future resale value and living conditions.

Buyer tip: Organise and finalise building and pest inspections before you agree to go unconditional. Never assume a property is “fine” based on appearances alone.

4. You Could Be Sued for Breach of Contract

If you can’t settle on the agreed date, even if it is because of an issue completely outside your control, the seller can take harsh legal action. They can:

• Forfeit your deposit

• Sue you for damages if they sell the property later for a lower price

• Claim other losses like legal costs, interest, and holding costs

The financial and emotional fallout from breaching an unconditional contract can be devastating, sometimes leading buyers into bankruptcy.

Buyer tip: Make sure you have every financial, legal, and logistical element sorted out well before the settlement date, including double-checking your lender’s timelines and confirming your own capacity to settle.

5. Unforeseen Life Events Don’t Matter

Real life doesn’t stop for real estate. If you lose your job, experience a medical emergency, go through a breakup, or even face a market crash, you are still legally required to settle under an unconditional contract.

There’s no such thing as a “life happened” clause to protect you. The law doesn’t care about personal hardships once the contract is unconditional. Your obligation is absolute.

Buyer tip: Build a financial safety net before entering into any unconditional agreement. Have emergency savings, income protection insurance, or alternative finance options in place to safeguard against life’s curveballs.

Unconditional Contract

Finding your dream home and putting in an offer is an exciting and sometimes stressful process, particularly if you are waiting on loan approval. It is only once your finance has been fully approved that the Contract of Sale ‘goes unconditional’ and the transaction is no longer subject to any of the conditions it might have been prior to this point. Having your contract ‘go unconditional’ means it is proceeding and if you rescind at this stage you may be required to relinquish your deposit to the Vendor as well as being left open to being sued for losses incurred by the Vendor.

Now that you’ve overcome the hurdle of having finance approved, what else needs to be done prior to settlement?

When does a contract become unconditional in QLD?

An unconditional contract is a legally enforceable agreement that does not depend on any conditions being fulfilled before it becomes binding. In property transactions, this typically means:

• No finance clauses (you must have your loan approved or risk breach)

• No building or pest inspections pending

• No further due diligence allowances

• No subject-to-sale clauses for your existing property

In short: when you sign, you’re locked in.

Unlike a “conditional contract,” where settlement depends on certain things happening (like securing finance or passing an inspection), an unconditional contract signals full commitment. If either party pulls out after signing, they risk serious financial and legal consequences.

Urgent Steps to Protect Yourself After Signing

Here’s what you need to do immediately to safeguard your investment:

1. Finalise Your Financing Fast

Even if you had pre-approval before signing, you need formal loan approval quickly. Banks can sometimes change terms, so do not assume everything is ready just because you got a green light weeks ago.

Action Tip: Call your broker or lender the same day the contract is signed. Submit any outstanding documents they request without delay.

2. Arrange Insurance Immediately

In Queensland, the buyer becomes responsible for the property once contracts are exchanged, not at settlement. That means if there’s a fire, storm damage, or burglary, you could be liable.

Action Tip: Take out building and contents insurance the day you sign.

3. Conduct a Final Property Inspection

Even if the contract is unconditional, you usually have the right to a pre-settlement inspection. This ensures the property’s condition hasn’t deteriorated.

Action Tip: Book the inspection as close to settlement as possible, and bring a checklist: plumbing, appliances, walls, fences, etc.

4. Confirm Title and Legal Checks

Even unconditional contracts assume the seller will hand over clear title. Work with your conveyancer or solicitor to ensure there are no last-minute surprises like unpaid council rates, encumbrances, or easements that weren’t disclosed.

Action Tip: Ask your legal team for a “certificate of title” review and outstanding rates or levies search.

5. Prepare for Settlement Day

Settlement day can be hectic. Funds must be transferred, documents signed, and keys exchanged, usually all within a few hours.

Action Tip: Ensure all your funds (deposit, balance, taxes) are in an accessible account. Talk to your lawyer about signing authority documents in advance.

Mortgage documents

Once your home loan has been approved there will be more forms to fill out. Contact your banker or mortgage broker to obtain the relevant forms and ensure they are completed well before settlement as there can often be delays in processing the documents.

Transfer document

Your conveyancer or solicitor may ask you to sign a transfer document. This will be lodged with the Office of State Revenue and relates to the stamp duty you will need to pay on the purchase. Your solicitor is able to organise the transfer on your behalf, so do not be concerned if you are not asked to sign it.

Final inspection

It is crucial that you perform a final inspection prior to settlement to ensure that the property is in the same condition as when you agreed to purchase it. Things to look out for include:

• any major damage or defects that were not present when you inspected the property at the time of purchase;
• rubbish, personal belongings or an otherwise unacceptable amount of mess left on the premises; or
• the removal of any items that were listed as inclusions, such as window treatments, the dishwasher or solar panels.

Most final inspections take place without any issues, however, if you do find faults or defects be sure to inform your solicitor or conveyancer as soon as possible as settlement may need to be delayed in order to rectify the problems.

Connect the utilities

To be able to feel right at home as soon as you move into your new property be sure to connect the utilities you need as well as the ones you just can’t live without, including:

• Gas;
• Electricity;
• Water;
• Phone and internet; and
• Foxtel or other subscription services.

You may also wish to organise Home and Contents and/or Building insurance to cover your new purchase.

Update your mailing address

It may be the last thing on your mind when preparing for a big move but updating your mailing address is one of the most important priorities! Take note of all the mail you receive at your current residence before you move and be sure to update each organisation as you go. It may also be a good idea to have your mail redirected by Australia Post for a period of time so that it arrives at your new address. You can have your mail redirected for 1, 3, 6 or 12 months, which will give you plenty of time to capture all the organisations you need to update your details with. You can add up to six names to the application so the whole family’s mail can be forwarded too.

Collect the keys

Once the settlement has taken place your solicitor or conveyancer will contact you to let you know. You will now be free to collect the keys and enjoy your new home!

Never Go Unconditional Lightly

The best way to avoid complications with an unconditional contract? Only sign if you’re 100% ready.
That means:

• Finance approved

• Property inspections done

• Legal advice received

• Full due diligence completed

Unconditional contracts can offer negotiation advantages. But they’re a double-edged sword if you are not fully prepared. Buying a property is one of the most significant investments of your life. Don’t let a single signature turn into a costly mistake. Respond promptly, remain diligent, and defend your future investments.