Agent wants 10% deposit for private sale?

Agent wants 10% deposit for private sale on signing the contract?


Is this normal?

That means buyers who wants to take a 95% home loan and equity loan will not be eligible?
 
Agent wants 10% deposit for private sale on signing the contract?


Is this normal?

That means buyers who wants to take a 95% home loan and equity loan will not be eligible?

Yes, but as a part of your offer you can say with a 5% deposit. Alternatively, you can folk out $300 bucks (varies depending on purchase value) for a 10% deposit bond, from someone like Deposit Power.

Cheers
Greg
 
Yes, but as a part of your offer you can say with a 5% deposit. Alternatively, you can folk out $300 bucks (varies depending on purchase value) for a 10% deposit bond, from someone like Deposit Power.

A 10% deposit upon exchange is normal and a common requirment. For all i know, it may even appear as that on the contract template. However this amount can be negotiated by you though and it is up to the vendor and/or their solicitor to agree to the deposit amount. If they are insisting on 10%, you can specify in your offer that the deposit is made up 5% cheque and 5% deposit bond. That works for a lot of people.

But i am just a little confused here. you say:

Agent wants 10% deposit for private sale on signing the contract?

What do you mean by "private sale". Are you buying directly from the vendor and if so, why is there an agent in place? Are you referring to their solicitor or to a Real Estate agent?


Thanks


g
 
Remember that the deposit is primarily about having "hurt money" if you default from the contract; it doesn't necessarily have to involve transfer of money at the time you sign the contract.

You could have, for example, a 10% deposit, payable on the day that settlement is due. You pay no cash now, but if 1) everything goes according to plan, you pay the deposit at settlement, and 2) if you default, the 10% still has to be paid and will be forfeited.
 
What do you mean by "private sale". Are you buying directly from the vendor and if so, why is there an agent in place? Are you referring to their solicitor or to a Real Estate agent?


Thanks


g





sorry, I meant thru an agent, I was thinking private as in not-auction, :)
 
You could have, for example, a 10% deposit, payable on the day that settlement is due. You pay no cash now, but if 1) everything goes according to plan, you pay the deposit at settlement, and 2) if you default, the 10% still has to be paid and will be forfeited.



but in this case, paying 10% deposit when settlement due, isn't like paying 100% when settlement (if the bank loans 100% for eg), on settlement the bank will trasnfer money to seller?
 
but in this case, paying 10% deposit when settlement due, isn't like paying 100% when settlement (if the bank loans 100% for eg), on settlement the bank will trasnfer money to seller?
Yes, if you settle on time, that's exactly right.

The main purpose of the deposit in this case is that if you breach, the seller has an automatic right to pursue you for a debt equivalent to the 10% deposit.

If it was zero deposit and you breach, they'd have to sue you for damages and rely on a judge to quantify what those damages are (if anything). But if the contract specifies 10% deposit and you fail to settle, they already have a legally enforceable right to pursue you for the 10%.
 
wait a min, is there any situation where it can't settle on time (delay by bank?)

even if i were to sign a contract where i need to pay 10% deposit on settlement, and I breach the contract, they still need to spend $$$ to sue me to get $$$?
 
wait a min, is there any situation where it can't settle on time (delay by bank?)
Yes, but that's a risk in any case. If you have an unconditional contract, the vendor really doesn't care whether your bank has delayed things.
s050399b said:
even if i were to sign a contract where i need to pay 10% deposit on settlement, and I breach the contract, they still need to spend $$$ to sue me to get $$$?
Yes and no... it's a matter of degree.

Zero deposit:

1) Sue you, go to court, get judge to quantify damages, get a judgement.

2) Enforce judgement (ie collect on debt).

10% deposit: they can skip straight to step 2; the moment you've failed to settle in accordance with the contract, they can proceed to debt collection. The deposit is kind of like liquidated damages for contract breach.

Step 1 is the expensive/difficult part, so specifying a deposit - even if it doesn't have to be paid until settlement - is still a big benefit to the vendor.
 
There's a lot of psychoogy involved in putting in the offer.

Consider from the vendor's side:

lowish offer, 10% down, unconditional
highish offer, $500 down, conditional on bank, inspeciton, etc etc etc

Which would you accept?


The Y-man
 
In Vic, private sale usually refers to one that's not going by auction or tender.

To me, in the ACT, a "private sale" is one where there are no agents involved, and i, as a purchaser, is buying a house directly off the vendor - with no middleman/hungry agents in the way.

If not, I would be buying "through an agent".

We also use "private treaty sale" and it is the same as others have described.

I 'spose this is similar to the Newcaastle/ Newca(r)stle debate. Or even the same as the "scallops and potato cakes" debate. I won't even mention the definition for football.


G
 
There's a lot of psychoogy involved in putting in the offer.

Consider from the vendor's side:

lowish offer, 10% down, unconditional
highish offer, $500 down, conditional on bank, inspeciton, etc etc etc

Which would you accept?


The Y-man




wouldn't they always go for the one with highest offer? more $$$ for their effort?
 
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