Deposit before offer !!!

[Savanna100]

Hi, something interesting happened to me yesterday. I was viewing a townhouse that I was thinking of buying and I decided to make a first offer so the agent whipped out a form and had me fill it in and write the offer on it then he asked me for $1000 in order to just make the offer !!!
I couldnt believe it (In completion terms, this would have been house buying experience No 11) and I have never been asked for a deposit like this before.

When I refused, the agent said he wouldnt put the offer to the vendor unless I paid up. I said that was fine and that he just had lost the sale Townhouses are generally a dime a dozen to me, I'm a town planner and I deal with development applications for them in another jurisdiction and I tend to know exactly what they are worth and what's involved. I just decided that, as I didnt own one already, it would be a good return at present to buy one For reasons of probity I cant buy one in the area I work in (Queanbeyan) so I was trying to buy this townhouse in Canberra.

After I told him it was "game over" he got a bit argumentitive and insisted that he wouldnt put the offer till I paid up, he said it was because certain "ethnic groups" "put 6 offers in a weekend and then dont proceed" so the company brought in the policy to stop that....

I'm a middle aged woman of obvious irish colouring so he obviously didnt mean me .......anyway, I'd had enough and told him that it wouldnt be happening...I think he was really shocked.

Today I told a good friend who is a RE agent and she laughed and told me to dob him in to fair trading, she though he was an idiot as you usually do whatever you have to to get the sale.

He rang me back just after that and I told him that I wasnt interested at any price and he was suddenly all helpful and said it was "company policy" but he would try and negotiate the need for the $100 away so he could put my offer.
I told him that I would not do business with the company under any circumstance either now or in the future and that I'd rung Fair Trading and that what he was doing was outrageous.

So, please be aware that RE Agents are obliged to put any and all offers to vendors and you should not have to pay a good faith deposit of any amount in order to have your offer put.

I'll pick up a bargain soon enough, I'm certainly not worried about that.

Me - 1
Slime ball agent - Nil

Has anyone else had a similar experience????

 

[Propertunity]

Savanna,

As you know those 'good faith' deposits are meaningless and hold little sway legally except in some (not all) states where the REA has to advise you if anyone else has made a higher offer on the same property up to the point of exchange or going unconditional.

The guy needs to read people better. I'm getting feed-back from some agents that they are a bit tired of offers being made on multiple properties (low-ball) by the same buyers over the course of a week-end....and this was probably his way of minimising that - so I can see where he's coming from .........BUT really the delivery was left wanting..... and from what you said he probably realised he'd handled it badly.

Don't expect much from FT but good to see you stand up for yourself having been on the receiving end of bad customer service.

 

[Savanna100]

I can see your point, thanks for that. However, this was my first offer for a property in 5 years.

I've got my RE Agent friend looking for a unit for me now. I was going to do a develoment JV with someone before the GFC happened so I would have been able to create my own "wholesale property" which I was planning to sell the 'Rick Otton' way to avoid having to pay the GST....but that's a whole other story.....

 

[eternit]

Hey Savanna,

Was the townhouse in Canberra?

What sort of property are you looking for? And which part of Canberra are you looking?

 

[BayView]

Not normal to put in a deposit with the offer; especially in a buyer's market.

But, in a boom market, this is sometimes required to secure the purchase.

The agent would have been trying to guage your seriousness.

That's why the job is so cr@p - they have to deal with liars all day long on both sides of the Contract.

 

[jaycee]

Oh well, that the job to deal with people.....

He messed up in his judgement, offended a good customer and lost a possible sale... next....

 

[twobobsworth]

So you walked away from a deal that stacked up because you wouldn't put down a fully refundable offer deposit? Maybe i'm missing something.

 

[Savanna100]

Twobobsworth, those sort of deals (and better) are everywhere, Canberra is still at the tail end of a building boom of sorts ....it was more than I wanted to spend with less rental return than I can get closer to the city so it was just because it was new and quite nice that I thought I'd give it a try. The townhouses were selling for $485,000 and I offered $452,950 to kick the discussion off. Its been up on Allhomes for a year. My agent friend said to me that she was glad I didnt pay it because it would have sat in their trust fund for a month and then I would have got a cheque back, all on an offer which probably would have failed first time round.

Etermit, This townhouse was in Macquarie, just near Jamison Plaza but I was mainly looking in Turner and Braddon where I'm going to re-focus my efforts.

Bayview, I was a serious player, I've been informally approved for finance n the $600ks and this was a $485k unit so there was no need to lie. From now on I will ask when I phone up to arrange a viewing what their policy on "deposits before offer" are.

 

[jaycee]

So you walked away from a deal that stacked up because you wouldn't put down a fully refundable offer deposit? Maybe i'm missing something.

Yep I would have too, not when other agents don't require one, why is this one such hard wrok compared to seemingly everyone else ?

 

[Savanna100]

No idea why that was hard work but, in retrospect, a bit of fun in some ways.

I've just spent the last hour online looking at different inner city apartments in Canberra, maybe I shold look there too. As I said, this is my first purchase in 5 years (I was consolidating in order to do a development but abandoned the idea due to the GFC). I'd be more than happy to hear form anyone here who knows buying in Canberra, especially the inner areas. I'm trying to focus on Turner, braddon and the city.

thanks to everyone who has responded so far.

 

[eternit]

Braddon and Turner are both fairly expensive.

What sort of gross yield are you expecting?

 

[Savanna100]

At least enough to cover the mortgage, 5% maybe. I had found one which had been for sale since last September and I went to put an offer on ity and got beaten by a couple of hours. Apparently you can still gazump in Canberra so maybe I should ask the question.
I have noticed that most things go under offer almost as soon as they are listed.

 

[jaycee]

No idea why that was hard work but, in retrospect, a bit of fun in some ways. .

I meant having to put down $1k deposit just to submit and offer & if not accepted, wait to get your money back, when in comparison, you dont have to put down a deposit to make an offer with so many other agents,..I thought I was agreeing with you

 

[twobobsworth]

Never had an offer deposit held for more then 48 hours. It's all a game.

If they want $1000, give em $2000.

 

[drydenim]

So the offer deposit is definitely refundable? Do I have to include a note in any offer letter I make, to have the offer deposit returned immediately if the offer is rejected?

Heard of dodgy REA who refuse to return the deposit

 

[Leikela]

That's all I've known and I've always paid $500 - $1,000 when making an offer. It's just a personal cheque that they tear up or give back if the offer is rejected anyhow. I thought that was the norm, obviously it's not, unless things are done differently in other states. I even had one wanting 10% deposit on me making an offer before it was accepted and ended up accepting $10,000 which was meaningless anyhow, being a personal cheque. I had a feeling that agent was a bit of a bimbo though and had no idea what she was doing. After all it's their game, and if you want the property I guess you have to play their game. If you really wanted that townhouse, I would have just handed over the $1,000.

 

[dunno]

I told him that I would not do business with the company under any circumstance either now or in the future

Me - 1
Slime ball agent - Nil

So they have lost one potential sale and you have ommited yourself from being able to buy any properties listed with them just becasue you didnt want to leave a refundable deposit...Im confused how this makes you a winner?

 

[The Y-man]

That's all I've known and I've always paid $500 - $1,000 when making an offer. It's just a personal cheque that they tear up or give back if the offer is rejected anyhow.

Pretty much what I have found (in Melb at least). I just don't have any cash in the cheque account until the contract gets signed - and I tell the agent not to try cashing it in until such time and they are cool with it (saves them banking it into the trust account and then reissuing a cheque if my offer is rejected).

Things to be careful of then are: who the cheque is made out to! It should almost in all cases be to an agency's trust account - never to the vendor or to the agent (unless this is a bribe to negotiate a lower price ).

Cheers,

The Y-man

 

[drydenim]

Thanks for the quick reply. So how does one make an offer? Do we prepare our offer letter, sign it, and hand it over to the agent? Is the process same with all REA?

 

[fokas]

Never had an offer deposit held for more then 48 hours. It's all a game.

If they want $1000, give em $2000.

I'm failing to see the logic in this... Apart from buttering up the REA and making them happy what benefits are there?