Unconditional Purchase Offers: Why Sellers Must Beware of False Certainties

"Offer without financing contingency," "firm offer," "cash payment," "cash offer"… These terms are omnipresent in the high-end Paris real estate market. For many sellers, they embody the promise of a faster sale with fewer risks.

In reality, this idea is often misleading. An offer without a financing contingency is neither automatic proof of solvency nor an absolute guarantee of legal security. Misunderstood or misused, it can actually jeopardize the transaction.

At Fairway Luxury Real Estate, we consistently maintain that an offer "without financing conditions" is never proof "in itself" of the buyer's economic strength. Solvency must always be analyzed and verified, regardless of how the purchase offer is phrased.

Unconditional Offers: Legal Framework and Market Perception

Legally, an offer or a preliminary contract signed without a financing contingency means that the buyer waives the statutory protection linked to obtaining a mortgage.

In the event of a financing refusal:

The buyer remains committed;
They are, in principle, liable to lose the security deposit (indemnité d’immobilisation), generally set at 10% of the price;
The seller is not required to return the sums paid.

This mechanism creates a feeling of reinforced security for the seller. However, this security is often more apparent than real.

Market Practice: Unconditional Offers… But Rarely Cash Purchases

In practice, a significant portion of buyers who sign without a contingency do not pay fully in cash. Financing exists, but it is frequently:

Highly prepared in advance, but not definitively secured;
Dependent on the sale of another property;
Or mixed, combining bank credit and personal assets.

The absence of a contingency clause does not mean the absence of credit dependence. It merely means that the risk is transferred to the buyer, without being totally neutralized for the seller.

Loan Refusal: No Automatic Release for the Buyer

Unlike a promise with a financing contingency, a buyer who has signed an "unconditional" promise and is then faced with a loan refusal is not automatically released from their obligations.

To avoid paying the 10% security deposit, they would notably have to initiate legal action and demonstrate:

That the waiver was irregular or uninformed (e.g., the real estate professional failed in their duty to advise);
Or that the loan was indispensable to the operation and the opposing party knew it.

These procedures are long, costly, and uncertain. While professional buyers (investors, companies) have less protection, this remains a frequent subject of litigation. In any case, a coherent offer with a financing contingency, backed by credible documents, is often much more secure than an unsupported and sometimes unrealistic unconditional offer.

The Risks of "False" Unconditional Offers

Offers that are legally "unconditional" but economically dependent on a loan expose the seller to several concrete risks:

The buyer may be refused the loan: the sale stops;
Risk of litigation regarding the actual payment of the security deposit;
The property risks being tied up for nothing for several weeks;
Loss of confidence from other potential buyers when the property returns to the market.

The Fairway Luxury Real Estate Position

When a buyer signs without a contingency, it generally reveals a very high contribution, well-secured financing, and solid asset capacity. In this specific case, the absence of a condition is coherent.

However, at Fairway Luxury Real Estate, we refuse to be complacent with "light" unconditional offers. Our doctrine is clear:

An offer must reflect the reality of the financing;
Solvency is never presumed; it must be verified;
The contractual form never takes precedence over economic credibility.

Before presenting any purchase offer to the seller, we systematically proceed with a solvency analysis of the buyer, in conjunction with a specialized financial partner. This work protects the seller, the buyer, and the transaction itself.