Conditional purchase offer subject to finance: what to check before accepting it

What it means to accept an offer subject to finance

When a buyer presents a purchase offer subject to obtaining finance, they are not simply saying “we’ll see”, but making a proposal that can bind both parties if it is drafted clearly. In practice, the seller needs to know whether that condition is a genuine safeguard for the buyer or, in reality, a way of leaving the transaction on hold without specifying anything.

The legal basis of a sale and purchase requires the thing and a certain price, and the promise to sell or buy, if there is agreement on the thing and the price, allows performance of the contract to be claimed. In that context, an offer subject to finance must be reviewed with particular care because it can come very close to a pre-contract with real effects. In addition, in contracts concerning property, the forms and formalities are governed by the law of the place where the property is located art. 11 of the Civil Code.

It is not advisable to accept the document without checking whether the condition is defined objectively, whether it sets a time limit for seeking finance and whether it makes clear what happens to any sums paid meanwhile.

What to check before accepting it: condition, scope and proof

The first review is not banking, but contractual. If you are the seller, you must understand exactly what you are taking on and what you are not taking on by accepting the offer.

1. **Check whether the condition is properly defined.** A clause saying “subject to finance” is not the same as one that specifies the type of loan, the minimum amount, the deadline for applying and the documentation the buyer must provide.

2. **Review the scope of the commitment.** Some documents only reserve the property, while others already commit the parties. The Community of Madrid reminds us that, before a sale and purchase, contracts such as deposits, an option to purchase or a private sale and purchase agreement may be used, each with different effects.

3. **Ask for proof of the real financing process.** If the buyer claims that the transaction depends on the mortgage, it is advisable for them to provide evidence of the application to the bank, the responses received and the steps actually taken.

4. **Distinguish between a suspensive condition and a general excuse.** A well-drafted condition must be verifiable. If there are no objective elements, you may end up blocking the sale without a clear exit date.

5. **Do not confuse an offer with automatic acceptance.** The conditional offer does not in itself oblige you to sell if you have not accepted the wording in exactly those terms. Acceptance must be express and consistent with the content of the condition.

Dates: why they matter as much as the price

In this type of transaction, dates often cause more conflict than the price itself. What matters is not only when it is signed, but when the condition starts and when it expires.

### Check these three dates

1. **Start date for seeking finance.** It must be clear from which day the buyer has time to arrange the mortgage.

2. **Deadline for receiving a bank response.** If there is none, the transaction may remain open indefinitely.

3. **Final decision date.** A specific day must be set to accept, withdraw or move on to the next stage.

If the offer overlaps with other interested parties, you need to know until when you can keep the property committed without losing opportunities. A poorly dated finance condition may leave you unable to sell to another buyer, even if the first one does not move forward.

**Practical tip:** put in writing what happens if the buyer does not provide a formal refusal, if they only send informal messages or if they request an extension. Ambiguity on this point often leads to avoidable disputes.

Return of sums: when it is worth setting it out and how

One of the most delicate points is the return of the amount handed over on accepting the offer. If the transaction is subject to finance, you must know in which cases the money is returned, how much is returned and within what period it is done.

The Community of Madrid states that, before a sale and purchase, contracts such as deposits or earnest money may be used, and that the consequences of breach must be made clear in the contract. It also indicates that the private contract must specify the price, method of payment and effects of rescission or breach, as well as the property and signatories’ details. In parallel, the Civil Code recognises the possibility of seeking the nullity of contracts in certain cases and regulates defects in consent, such as error, deceit or intimidation art. 1302 of the Civil Code.

### Before accepting, check:

1. **Whether the amount handed over is a reservation, earnest money or a deposit.** They do not have the same effect.

2. **Whether the refund is automatic or conditional.** The wording should state which documentation proves the financing failure.

3. **Whether the refund is full or partial.** Do not leave it to interpretation.

4. **Whether there is a deadline for refunding it.** Without a date, the dispute usually drags on.

5. **Whether the amount handed over is applied to the final price if the transaction goes ahead.**

**Common mistake:** accepting a finance condition and, at the same time, signing a poorly drafted penalty clause. The result can be a contradiction between the supposed right to withdraw if the mortgage is not obtained and the automatic loss of sums without clearly defining when that applies.

How to protect yourself as a seller without closing the door to the buyer

Accepting an offer subject to finance does not mean rejecting it outright. It can be perfectly reasonable, especially if the buyer acts transparently. The key is to structure the wording.

### Recommended steps

1. **Ask for a specific wording of the condition.** It should include an indicative amount, a named lender or open search, and a deadline.

2. **Require documentary evidence of the mortgage arrangements.**

3. **Set an expiry date for the offer if there is no progress.**

4. **Spell out what happens to viewings, removal of the listing and other offers.**

5. **Only link the offer to the next contract once the finance is reasonably on track.**

If you are acting with property advice, it is worth reviewing the wording before signing so that a seemingly harmless clause does not end up becoming a block. If you need support to assess a specific proposal or to review the selling strategy, you can request guidance at contact or ask for an initial estimate at online indicative valuation. The online valuation is indicative, not an official appraisal, and includes a range and a PDF report, with an optional visit if you wish to refine the analysis.

What must not be overlooked before signing

There are several mistakes that should be avoided in this type of offer:

- accepting a finance condition without a deadline;

- not asking for proof of the mortgage application;

- confusing a reservation with earnest money;

- leaving the refund of the money undefined;

- not specifying what happens if the finance is approved for a lower amount than expected;

- signing without checking whether the document fits the actual stage of the transaction.

It is also worth distinguishing between general guidance and individual advice. The correct wording depends on each property, the buyer’s profile, whether there are already other offers and how you want to link the offer with earnest money, a private contract or the deed.

If you would like to review a specific transaction, UBICASA welcomes you at its office at Calle Montesa 29, Madrid, from Monday to Friday from 10:00 to 15:00 and from 16:00 to 19:00. This guide is informational and does not replace a case-specific analysis, especially where there is finance, fixed dates or amounts already handed over.