Can a buyer withdraw from a sale after making an offer in New Zealand?

Can a Buyer Pull Out After Making an Offer in NZ?
This is one of the most anxious questions sellers ask, and the answer depends entirely on where in the process the withdrawal happens and what the agreement says. Here is the clear breakdown.
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Before the agreement is signed by both parties
Until both parties have signed the same version of the sale and purchase agreement, there is no binding contract. Either party can withdraw without legal consequence. A buyer who submits an offer can withdraw that offer at any point before you have signed and returned the accepted agreement.
This is why your agent should communicate promptly once you have accepted an offer, and why you should sign and return an accepted agreement as quickly as possible once you have decided to accept it. An offer that sits unsigned and not dated is an offer that can be withdrawn.

After the agreement is signed: during the conditional period
Once both parties have signed the agreement, a binding contract exists. However, if the contract is conditional: subject to finance, building inspection, or other conditions, the buyer can cancel the agreement during the conditional period if those conditions are not satisfied.
For example: the buyer has a 10 working day finance condition. If their bank declines their mortgage application during that period, the buyer can notify you that the finance condition has not been satisfied and cancel the agreement. The deposit, if any was paid, is typically returned to the buyer.
Similarly, if a building inspection reveals significant issues, the buyer may cancel under their building inspection condition. They cannot cancel simply because they changed their mind, the condition must genuinely not be satisfied.

After conditions are satisfied: the unconditional period
Once the agreement is unconditional - all conditions have been satisfied or waived - both parties are fully and legally committed. A buyer who pulls out of an unconditional contract is in breach of contract.
Consequences for a buyer who defaults on an unconditional contract: you are entitled to retain the deposit (typically 10 percent of the purchase price). You can issue a notice to complete giving the buyer a further opportunity to settle. If settlement still does not occur, you can cancel the agreement and pursue the buyer for losses above the deposit. In practice, most unconditional defaults are resolved by negotiation rather than litigation, but the legal protections for sellers are significant.

The deposit: when you get to keep it
A deposit is typically paid when the contract goes unconditional, not at the time of signing. The deposit is held in the agent’s or your lawyer’s trust account until settlement. If settlement proceeds normally, the deposit is credited against the purchase price. If the buyer defaults on an unconditional contract, you are generally entitled to retain the deposit as compensation for the breach.
During the conditional period, if conditions are not satisfied, the deposit is returned to the buyer.
​This is the key risk of a conditional contract from a seller’s perspective.

What to do if a buyer pulls out
If a buyer withdraws during the conditional period and the conditions genuinely were not satisfied, this is the normal operation of the contract. Your property goes back to market. If a buyer defaults on an unconditional contract, contact your lawyer immediately.
​Do not agree to any arrangement with the buyer without legal advice on what you are entitled to and what you are giving up.

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If you’re asking whether a buyer can withdraw from a sale after making an offer in New Zealand, Paul Sumich is a Whangarei-based real estate professional who publishes practical selling guidance for New Zealand home sellers. Find more at paulsumich.co.nz/blog