Comparing offers when selling a house: why the highest number isn’t always the best
You’ve got two offers on your home in Berwick. One is $20,000 higher, but it’s subject to finance and the buyer wants a longer settlement. The other is lower, but it’s unconditional and the buyer can settle when you need to. The higher number is pulling at you, and that’s fair enough. But it isn’t automatically the better offer.
When you’re comparing offers when selling a house, price is only one of three things that decide which offer is best. The other two are certainty (will the deal go through?) and timing (does the settlement date suit you?). A lower unconditional offer can be worth more than a higher one with conditions attached, because it is far more likely to reach settlement without falling over.
How to choose between offers on a house
To choose between offers on a house, weigh three things against each other: the price, the certainty that the deal will complete, and the settlement timing. Most sellers look hard at the first and barely at the other two. That’s how a higher offer that never settles ends up costing more than a lower one that does.
Certainty is about risk. An offer is only worth what it becomes at settlement. If a buyer needs their bank to approve a loan, or needs to sell their own home first, there’s a real chance the sale falls through weeks in. Timing is about your plans. If you’re buying somewhere else, the settlement date on the offer you accept decides whether the two line up or whether you’re left paying for bridging finance in between.
Conditional and unconditional offers explained
A conditional offer depends on something else happening before the sale is locked in. An unconditional offer has no contractual conditions: once both parties sign, the contract is binding, subject to any statutory cooling-off rights or other rights that apply.
Common conditions include a finance condition (the buyer’s loan has to be approved), a building and pest inspection condition, which may let the buyer end the contract if the inspection result meets the contract’s termination threshold, and a condition that the buyer sells their own home first. Each condition is a contractual door the buyer may be able to use if the condition is not satisfied and the contract allows them to end the sale. More conditions mean more ways the deal can end before settlement.
An unconditional offer house sale removes those contractual doors. The buyer has committed without those conditions, so after any cooling-off period expires or does not apply, the main remaining risk is buyer default. If that happens, the deposit may be at risk and other consequences may follow under the contract.
What “subject to finance” means for a seller
“Subject to finance” means the sale depends on the buyer’s lender approving their home loan by a set date. Until that happens, the buyer can end the contract and get their deposit back if the loan is refused and they’ve followed the right steps.
Here’s how it works from your side as the seller. The contract names a finance approval date. If the buyer’s loan isn’t approved by then, they may be able to serve written notice to end the contract within the time required by the contract, commonly within two clear business days after that date. If they don’t give notice, the contract generally becomes unconditional and the sale proceeds. So a finance condition puts a window in your sale where the buyer can still walk. The longer that window, the longer your home sits in limbo before you know the deal is real.
Accepting an offer subject to finance in Victoria isn’t a bad move on its own. Most buyers who need a loan will ask for it, and most do settle. But it carries more risk than an offer with no finance condition, and that risk is part of the offer’s real value. A bank can decline a loan late, or value the property below the price and lend less than the buyer needs.
Cash offers, unconditional offers and the certainty premium
A “cash offer” rarely means a buyer turning up with a suitcase of money. It usually means an offer with no finance condition: the buyer either has the funds or has their lending sorted, so the sale doesn’t hinge on a loan being approved.
The value in a cash or unconditional offer is certainty. With no finance condition to satisfy, there’s far less chance of the deal collapsing before settlement. In fast-moving corridor markets like Clyde North and Officer, several offers on the one home are common, and that’s exactly when the highest number is most tempting and most worth a second look. Twenty thousand dollars more on paper is worth nothing if the offer falls over and you’re back on the market two months later. Weigh cash offer vs subject to finance on the odds of completing, not just the headline figure.
Deposit size and settlement date: two signals sellers underrate
Two parts of an offer carry more information than they get credit for: the deposit and the settlement date.
What the deposit tells you
The deposit is the money the buyer pays on signing, held in trust until settlement. There is no fixed legal deposit amount in Victoria, but the deposit is usually 10% of the price. A larger deposit points to a buyer who is financially ready and serious, and it may give you more protection if they default, because more money is at risk under the contract. A buyer offering a full deposit is usually safer than one asking to pay a token amount up front.
Why the settlement date matters
Settlement is the day the sale completes, the money changes hands and the property becomes the buyer’s. The date matters because it has to fit your plans. If you’re buying another home, you want your sale settlement to line up with that purchase, so you’re not covering two mortgages or taking out short-term bridging finance to cover the gap. A buyer who offers the settlement date you need is offering real value, even if their price is a little lower than the next offer.
Cooling-off: an accepted offer isn’t locked in straight away
Under section 31 of the Sale of Land Act 1962, a private-sale buyer of a home in Victoria has a cooling-off period of three clear business days after signing the contract, during which they can pull out. The day the buyer signs isn’t counted, and weekends and public holidays don’t count as business days.
For you as the seller, this means an accepted offer isn’t fully locked in the moment the buyer signs. For those three clear business days the buyer can cancel, though they forfeit a penalty if they do: the greater of $100 or 0.2% of the price, according to Consumer Affairs Victoria. On an $800,000 sale that penalty is $1,600.
Cooling-off doesn’t apply in every case. Key exceptions include auction sales, private sales signed within three clear business days before or after a publicly advertised auction, sales where the buyer has previously signed a contract for the same property on substantially the same terms, and sales where the buyer is a corporate body or an estate agent. And it only runs one way: sellers don’t get a cooling-off period, so once you sign, you’re bound.
The agent negotiates the price; the terms decide the deal
The estate agent’s job is to market the home, negotiate with buyers and present offers to you. A good agent works to get you a strong price. But the agent isn’t the person who checks whether the terms behind an offer are as good as the number on the front.
That’s the work a conveyancer or property lawyer does: reading the conditions, the finance date, the deposit terms and any special conditions that decide whether the offer completes as promised. The strongest-looking offer can carry a condition that shifts risk onto you, or a settlement date that doesn’t work. It’s worth having the terms of a competing offer reviewed before you sign, not after, because once you and the buyer have both signed, you’re bound by whatever those terms say. Where an offer raises a legal question, that’s a matter for a solicitor rather than the agent.
Two offers compared side by side
The table below shows how a lower unconditional offer can beat a higher conditional one. Offer A is higher on price but carries a finance condition and a longer settlement. Offer B is lower but unconditional, with the settlement date the seller wants and a full deposit.
| What to compare | Offer A | Offer B |
|---|---|---|
| Price | $820,000 | $800,000 |
| Conditions | Subject to finance | Unconditional |
| Settlement date | 90 days (doesn’t suit your move) | 60 days (matches your purchase) |
| Deposit | 5% | 10% |
| Risk the deal falls over | Higher (loan still to be approved) | Lower (no finance condition) |
| Overall | Higher number, less certain, timing off | Lower number, more certain, timing right |
On price alone, Offer A wins by $20,000. Once certainty and timing are added in, Offer B is the safer sale and may well be the better one. Which is right depends on your situation, and that’s the point: the number alone doesn’t decide it.
Frequently asked questions
Can a seller accept more than one offer?
A seller can consider several offers at once, but can only sell to one buyer. Until you sign a contract, a verbal acceptance isn’t legally binding, so you’re free to weigh competing offers. Once you and a buyer have both signed, that contract binds you and the others fall away.
Can a seller change their mind after accepting an offer?
Before you sign the contract, yes, because a verbal acceptance isn’t binding in Victoria. Once you’ve signed, you’re generally locked in and must go through with the sale, unless a special condition in the contract gives you a way out, which is rare. Sellers don’t get a cooling-off period.
What happens if the buyer's finance falls through?
If the offer was subject to finance and the buyer’s loan is refused, the buyer can usually end the contract and have their deposit refunded, provided they followed the contract’s steps and gave written notice in time. The sale is off, the property goes back on the market, and that is the main risk a finance condition carries for a seller.
Is a higher offer always better?
No. A higher offer with a finance condition, a small deposit or a settlement date that doesn’t suit you can be worth less than a lower unconditional offer that’s certain to complete on the date you need. Price is one of three variables, alongside certainty and timing.
What is the difference between a conditional and an unconditional offer?
A conditional offer depends on something else happening first, such as the buyer’s finance being approved or a satisfactory building inspection. An unconditional offer has no such contractual conditions, so once both parties sign it is binding, subject to any statutory cooling-off rights or other rights that apply, and is generally more certain to complete.
Should I take a cash offer over a higher offer with finance?
It depends on how much higher the financed offer is and how confident you are that it will complete. A cash or unconditional offer removes the risk of the buyer’s loan falling through, which is why sellers often accept a slightly lower cash offer for the certainty. Have both offers’ terms reviewed before deciding.
What happens once you accept an offer
and knowing it helps you judge which offer gets you to the finish line cleanly. The buyer pays the deposit into trust. On a private sale, the cooling-off period runs for three clear business days unless an exception applies. Any condition periods, such as a finance condition, run according to the dates in the contract. If the offer was subject to finance, the sale is not contractually unconditional until finance is approved, the condition is waived, or the deadline passes without an effective termination notice.
That sequence is why the terms of an offer matter as much as its price: each condition is another stage where a higher offer can still come undone. Before you accept, have Conveyancing Today review the contract terms of the offers you’re weighing, so you commit to the one that’s genuinely the strongest, not just the highest. You can request a review through the contact page.