Deposit to Agent to start contract??? NSW/ACT

[homegirl]

Just wondering if there are any Real Estate savvy people here who know about the legalities (in NSW/ACT) of the Real Estate Agent's asking % of $$ for the buyer to pay before going to contract??? We just made an offer on a property and have been told that the % will be 10% of the sale price, payable to the agent before we can go to contract!!!???!!!

This will be around $35000 (which sadly, for us, is not just laying around in cash, it's tied up in equity)....and I am a bit shocked, as we never had to pay this in QLD to go to contract (we paid $500 MAX on our last property!!!!!)???

Are we being conned??? Do they have any right to ask this amount???

 

[jopie]

They can ask for it but you should be able to negotiate to use any amount as the deposit.

Consider a deposit bond, e.g; http://www.depositpower.com.au/

 

[Melbear]

I've exchanged contracts in ACT on $1000. It's a matter of asking/telling them what you're prepared to pay. The agents want the lot in their trust account so that they're in control of their commission payment and know that they're going to get it - especially if the sale falls over and they're still entitled.

 

[homegirl]

I've exchanged contracts in ACT on $1000. It's a matter of asking/telling them what you're prepared to pay. The agents want the lot in their trust account so that they're in control of their commission payment and know that they're going to get it - especially if the sale falls over and they're still entitled.

Do you mind if I ask what percentage the $1000 was of the sale price??? Not to be rude, I am just trying to get an idea of how LOW of a % we can negotiate too, without us looking stupid

 

[phil]

I've exchanged contracts in ACT on $1000.

Hi there,

I have just done the same in queensland. There is a good article in the September issue of "Australian Property Investor" magazine (API) which clarifies this issue a bit.

Phil

 

[homegirl]

Hi there,

I have just done the same in queensland. There is a good article in the September issue of "Australian Property Investor" magazine (API) which clarifies this issue a bit.

Phil

Sorry to sound daft, but is API available in a regular newsagency......I have heard of it, but never looked for it before

 

[phil]

... is API available in a regular newsagency...

Sure is. You can buy back issues also. Have a squizz in the "investment / property" section of the news agency. I always find it a good read.

cheers,
Phil.

 

[ermen]

5%

hi,

you should be able to go to contract with 5% if you ask the agent. i'm not sure if they'll accept lower - i guess you just have to ask?

 

[eternit]

Hi,

Just curious, are you buying investment property in ACT?

 

[geoffw]

Yes, you can offer a lower deposit, or a deposit bond, as previously mentioned.

Don't forget though- that if you can't proceed with the purchase, after exchange of contracts and before completion, you are required to forfeit 10% of the purchase price.

 

[Lizard King]

Deposit can be Varied

HomeGirl

The deposit can be 10% or less.

This is paid at exchange of Contracts.

By law you have a 5-Day Cooling Period on the Contract, though some solicitors give in to REAs demand of waiving this condition.

Deposit Bonds do cost you a fair bit.

Can you not pay for the deposit from your finance or investment loan - is this not part thereof?

Try this link for a few tips:

http://www.econveyancing.com.au/termsACT.asp

Let us know how you go.

Cheers,

Lizard King

 

[mystery]

I am currently buying a NSW IP. We have several IP's but this is our first in the state. Even though we are borrowing 100% of purchase price we still had to provide a 10% deposit at exchange of contracts in the form of a deposit power bond. It cost us $266.40 for $20,200 deposit from our lender.

Martin

 

[homegirl]

Yes, you can offer a lower deposit, or a deposit bond, as previously mentioned.

Don't forget though- that if you can't proceed with the purchase, after exchange of contracts and before completion, you are required to forfeit 10% of the purchase price.

WHOA!! Does that include if we forfeit "due to financiers" ??? (ie: the lender knocks us back) We were advised in QLD (during a QLD purchase) that if we didn't want to proceed with the sale at any point, we could just site that we couldn't get approved for finance, and then we wouldn't be penalised for breaking contract and not proceeding with the sale. (even if we HAD been approved for finance!).

 

[mystery]

WHOA!! Does that include if we forfeit "due to financiers" ??? (ie: the lender knocks us back) We were advised in QLD (during a QLD purchase) that if we didn't want to proceed with the sale at any point, we could just site that we couldn't get approved for finance, and then we wouldn't be penalised for breaking contract and not proceeding with the sale. (even if we HAD been approved for finance!).

You don't exchange contracts (in NSW) until your finance has been approved that way everything should be fine.

Martin

 

[homegirl]

Hi,

Just curious, are you buying investment property in ACT?

Nope, looking at NSW at the moment!!! The ACT market is too ugly for me to look at right now....coming from Brisbane originally, I feel violated looking at ACT real estate prices

 

[eternit]

Nope, looking at NSW at the moment!!! The ACT market is too ugly for me to look at right now....coming from Brisbane originally, I feel violated looking at ACT real estate prices

Yes but now even Brisbane house prices are not very pleasant....

 

[homegirl]

Not so bad if you got in BEFORE the unpleasantness in BrisVegas, of course, now it's a different story!!! I am paying $430 a week rent in Canberra, and I know I could have a mortgage and be paying less in repayments!!!!! It's doing my head in!!!!!