20k to make an offer ?

[rhino80]

Hi All,

So my partner and I found the house we want after many months of searching and getting frustrated & feeling like just giving up

The real estate agent advises us there is a contract on the house and its subject to Foreign Investment review. We were also told we can put in an offer but the existing party have 72 hours to cough up the finance or their contract is automatically terminated.

The real estate agent wrote out a templated contract and advised the existing party put down 20k as an initial deposit and we should do the same.

Does this sound suspect or am I being over cautious ? What gets me is the real estate agent actually wrote down the 20k deposit and wanted us to sign then and there ...

The wording is also quite vauge in the "Special Conditions" - not sure if i can actually type them out on here though ..

How can someone have or continue to except offers on a property when there is already a contract on it ? Can I just put down 1k as a deposit - put in my offer and terms to the agent and leave it at that ? Can I put in a clause stating subject to approval from buyers solicitors - if in fact the special condition is dodgey as all hell ?

appreciate anyones feedback - hopefully I'm not being to vauge here ..

 

[Bargain Hunter]

Hi All,

So my partner and I found the house we want after many months of searching and getting frustrated & feeling like just giving up

The real estate agent advises us there is a contract on the house and its subject to Foreign Investment review. We were also told we can put in an offer but the existing party have 72 hours to cough up the finance or their contract is automatically terminated.

The real estate agent wrote out a templated contract and advised the existing party put down 20k as an initial deposit and we should do the same.

Does this sound suspect or am I being over cautious ? What gets me is the real estate agent actually wrote down the 20k deposit and wanted us to sign then and there ...

The wording is also quite vauge in the "Special Conditions" - not sure if i can actually type them out on here though ..

How can someone have or continue to except offers on a property when there is already a contract on it ? Can I just put down 1k as a deposit - put in my offer and terms to the agent and leave it at that ? Can I put in a clause stating subject to approval from buyers solicitors - if in fact the special condition is dodgey as all hell ?

appreciate anyones feedback - hopefully I'm not being to vauge here ..

They have a contract with conditions which need to be satisfied before the contracts can be exchanged. No exchange = not sold, therefore they are still able to accept offers.

You need only put down the minimum deposit, however if you are serious you need to sign the contract and include any relevant conditions you may have... first one to exchange wins.

Regards

Andrew

 

[Aaron_C]

The $20,000 would be put into the real estate agent's trust account as a sign of good faith that you are serious and not just a tyre-kicker. It also makes the contract legally binding if the vendor accepts because there is consideration upon exchange. But as Bargain Hunter said, this amount can be lower, it's all negotiable.

 

[kathryn d]

We bought a house with those type of conditions on it. If another buyer made an offer, we had 48 hrs to come up with financing.

I would never give $20K as a deposit...$500-$1000 is more than plenty.

 

[Bigtone]

They have a contract with conditions which need to be satisfied before the contracts can be exchanged. No exchange = not sold, therefore they are still able to accept offers.

You need only put down the minimum deposit, however if you are serious you need to sign the contract and include any relevant conditions you may have... first one to exchange wins.

Regards

Andrew

Don't think that is the case in qld, the contract is actually exchanged but not enforceable until the finance clause is met. The second party can't override the first contract and in fact it cant be excepted by vendor until first one lapses. Different system to NSW where the contract is exchanged later. Andrew Allen or Terry will confirm the actual law but that is how i understand it and how I have treated contracts in qld in the past.

 

[Ed Barton]

Don't think that is the case in qld, the contract is actually exchanged but not enforceable until the finance clause is met. The second party can't override the first contract and in fact it cant be excepted by vendor until first one lapses. Different system to NSW where the contract is exchanged later. Andrew Allen or Terry will confirm the actual law but that is how i understand it and how I have treated contracts in qld in the past.

which begs the question why is the agent trying to get two binding contracts on the one place? i suspect he wants contract signed by op with deposit and will hold out getting vendors to sign until/if first one falls over.

 

[Marty McDonald]

Just wait the three days don't let them dictate.

 

[rhino80]

which begs the question why is the agent trying to get two binding contracts on the one place? i suspect he wants contract signed by op with deposit and will hold out getting vendors to sign until/if first one falls over.

Exactly - this is what we don't understand. From what the RE told me if we were to put in and offer today - it would be three days /72 hours before we would know if the offer is accepted.

heres the clause

"This contract is subject to a contract between (seller) & buyer - dated (date) being cancelled on or before / / .< - left blank

In the event the contract is not cancelled by the said date or if the cancellation is disputed either party may cancel the contract in writing to the other party at which point the deposit will be refunded in full."

apparently if we put an offer in - they fill in the date as 72hours in advance from that day.

 

[lizzie]

Are there other interested parties (other than the existing contract)?

If not, then why not just wait the extra (now) two days before signing a standard contract and giving over you 10% deposit? Why make it more difficult with clauses etc? Is the agent wanting you to sign so they can push the original purchases to get their act together?

I don't know what $$ you are buying the property for - but unless otherwise negotiated and agreed upon by the other party, you have to pay 10% of the purchase price as your deposit upon contract signing - and not a penny more.

 

[evand]

The best thing to do here is use the sales mans tactic of silence. Just ignore him.

If you miss out, you miss out. But if he comes back, you will have the upper hand.

btw: I'd ask him for proof that there is another offer.

 

[rhino80]

Are there other interested parties (other than the existing contract)?

If not, then why not just wait the extra (now) two days before signing a standard contract and giving over you 10% deposit? Why make it more difficult with clauses etc? Is the agent wanting you to sign so they can push the original purchases to get their act together?

I don't know what $$ you are buying the property for - but unless otherwise negotiated and agreed upon by the other party, you have to pay 10% of the purchase price as your deposit upon contract signing - and not a penny more.

The 72 hour thing is only valid once we sign a contract to make an offer as in the special terms they've left it blank to be filled in on the day an offer is made and signed for - because that special term is applicable to the seller and the current buyer with a contract on it

The agent is trying to hurry us up but I am having a solicitor look over it before I put pen to paper - it all just seems weird

Price wise its around the mid 400's.

 

[lizzie]

ah - now makes sense.

Well, yes - when you sign the contract you need to pay your deposit - which is then held in the real estate agents trust fund until either settlement or refund (make sure you get a receipt).

$20k is only 5% dep - so that is good.

 

[VYBerlinaV8]

The best thing to do here is use the sales mans tactic of silence. Just ignore him.

If you miss out, you miss out. But if he comes back, you will have the upper hand.

btw: I'd ask him for proof that there is another offer.

Well said. This is exactly what I would do.

 

[evand]

Absolutely. Why do people play RE agents stupid games?

They are just a middle man between buy and seller, nothing more. The contract is between buyer and seller. The money is between buyer and seller, with the agent taking a gouge on the way though. They are a dead set joke.

Play it your way rhino, they hate it. And it gives you the power.

Well said. This is exactly what I would do.

 

[rhino80]

Absolutely. Why do people play RE agents stupid games?

They are just a middle man between buy and seller, nothing more. The contract is between buyer and seller. The money is between buyer and seller, with the agent taking a gouge on the way though. They are a dead set joke.

Play it your way rhino, they hate it. And it gives you the power.

Totally agree

Thanks mate - good advice from everyone - appreciated. I've got a solicitor looking over it all for me. If it wasn't such a good buy I would of just walked away in the beginning!

 

[Peterw]

Totally agree

Thanks mate - good advice from everyone - appreciated. I've got a solicitor looking over it all for me. If it wasn't such a good buy I would of just walked away in the beginning!

Thats they way, dont follow the agents advice, and wait for them to call you, after the first sale has not gone through. If by chance some one else chooses to accept the agents advice, they effectively become the "next buyer" and away they go, and the agent does not ring you.

Your call

 

[Andrew_A]

The 72 hour thing is only valid once we sign a contract to make an offer as in the special terms they've left it blank to be filled in on the day an offer is made and signed for - because that special term is applicable to the seller and the current buyer with a contract on it

The agent is trying to hurry us up but I am having a solicitor look over it before I put pen to paper - it all just seems weird

Price wise its around the mid 400's.

You might just adjust the initial deposit to payable after your contract becomes binding (longer than 3 days in this case; or when seller signs contract, or some similar idea). As I understand paying the 20k would be reasonable if you actually end up being able to get the property? The standard wordage is 'initial deposit is payable when buyer signs this contract', that's what you would be changing. Otherwise just offer the initial deposit you want and give a polite reason as to why that's all you can afford.

Motivation might just be the agent wants to cover their commission and it might not be actually a seller concern, might be worthwhile asking what's important to the seller. We only ever pay more than 2k initial deposit when it's important to the seller (and not the agent.. though that can sometimes be the same thing as the agent can have a strong influence on vendor)

If you really want to buy this particular property then it's worthwhile jumping through some hoops, depends on how highly you rate the deal. My experience has been it's almost always better to be polite, you can be firm and polite at the same time when needed.

If you have your standard finance and building and pest clauses and you want more protection you might consider a due diligence clause, or a satisfactory inspection clause (say your partner or someone will need to inspect), also might be an idea to put a sunset clause on the offer, in this case a little bit after the 72 hours elapses.

Just some general ideas to consider.

 

[BuyProperty]

$1000 is all you need to secure the property in terms of a deposit, don't listen to the real estate agent, they are not in control; you are.

 

[Dazz]

So my partner and I found the house we want

Good stuff....

The real estate agent advises us

** Warning ** Do not accept advice on a contract from a REA legally representing your opponent's best interests. Makes no sense.

there is a contract on the house and its subject to Foreign Investment review.

Doesn't matter. Next.

We were also told

** Warning ** Never rely on anything regarding a contract from a REA legally representing your opponent's best interests. Makes no sense.

we can put in an offer but the existing party have 72 hours to cough up the finance or their contract is automatically terminated.

Doesn't matter...smoke and mirrors.

The real estate agent wrote out

** Warning ** Never allow a REA legally representing your opponent's best interests to write YOUR Offer to your opponent. Makes no sense.

a templated contract and advised the existing party put down 20k as an initial deposit and we should do the same.

** Warning ** Do not accept advice on a contract from a REA legally representing your opponent's best interests. Makes no sense.

Does this sound suspect or am I being over cautious ?

** Warning ** Totally ignore what a REA legally representing your opponent's best interests says to you. Makes no sense at all to listen to them. They will not and cannot warrant anything they say to you.

What gets me is the real estate agent actually wrote down the 20k deposit and wanted us to sign then and there ...

** Warning ** Never allow a REA legally representing your opponent's best interests to write YOUR Offer to your opponent. Makes no sense.

The wording is also quite vauge in the "Special Conditions"

The wording is vague in YOUR Offer ?? Doesn't make sense ?? Mustn't be YOUR Offer - surely....

How can someone have or continue to except offers on a property when there is already a contract on it ?

Qld & WA...no problem at all....totally different to Vic & NSW....they have a weird system.

Can I just put down 1k as a deposit - put in my offer and terms to the agent and leave it at that ?

You can put in whatever you want - it is YOUR Offer.

Can I put in a clause stating subject to approval from buyers solicitors - if in fact the special condition is dodgey as all hell ?

You can put in whatever you want - it is YOUR Offer.

hopefully I'm not being to vauge here ..

No, you're being new at the game. After a while you'll take control of your Offer instead of letting some wormy Agent scribble whatever they want to scribble. It sounds stupid, but by you standing there, you are actually letting the Vendor's representative write an Offer to themselves whilst you meekly stand there doing nothing.

You'll get the hang of it in no time, and summarily snatch that pen out of his hand and tell him to sit down and have a rest while you write up YOUR Offer. Frankly, they shouldn't even be in the same room, so you have time to think and write without them badgering in your ear, moulding what is acceptable and what is not to their Vendor.

Your instincts were correct. You should have listened to that little frustrated voice in your head instead of meekly standing there doing nothing. That was your negotiating power being flushed down the toilet. Listen to it next time.

Nice name....

 

[Melbournian]

you must have appeared desperate.. 20K?
in this mkt:?