Initial Deposits

[dammit]

Im about to sign a contract to buy a house in QLD.

I notice the contracts say:

Deposit
$___ - Initial Deposit payable when Buyer signs this contract
$___ - Balance Deposit (If any) payable on: __/__/2011

Should I offer to pay $0 on signing the contract, then offer $5000-$10000 (this is about 1.5%-3% of value of the property) after the 5 day cooling off period so write in balance payable by the 6th business day after the buyer receives a copy of the completed relevant contract from the seller or seller's agent.

Or should I either attach $500-$1000 personal cheque as the initial deposit, or ask for the agent's bank details to transfer it in. Is it sufficient to do an EFT transfer the same day we sign the contract? I thought EFT would be better because then we don't have to cancel cheques/etc if it doesn't go ahead, but also see it is mucking around paying deposits if the vendor then doesn't accept our contract which led me to the $0 upfront but feel the vendors may think we aren't serious?

It's a bit of a buyers market at the moment.

 

[The Y-man]

As a vendor, I do like to see a decent deposit - so if it came down to 2 offers of the same price, offering different deposits, ONE of the factors would be the deposit amount.

The Y-man

 

[dammit]

So maybe $1000 initial deposit in the form of a personal cheque attached to the signed contract, which would cover the ~$875 fee if we did cool off (.25%) and show we are legit, and then $10,000 after 5 days/cooling off period reached?

I just don't want to give away huge sums of money on signing of the contract in deposit because if the vendor doesn't agree on our price then it may take the agent up to 2 weeks to give the $ back which we then need for the next one we offer on.

 

[alexlee]

Why are you using the NSW 0.25% and 5 day cooling off thing in Queensland, anyway? QLD contracts usually have a much longer subject to building / pest inspection and finance clause, and you get your whole deposit back, not lose the 0.25% like you do in NSW?

 

[dammit]

oh, i was just using that from the vendor/agent's perspective. once I sign and agree on a property I don't intend to pull out - if we pulled out for pest/bldg inspection we'd still have to pay 400-500 for those reports (and there be something negative in them- which might be unlikely as they are brand new / newish houses) and on finance my bank has given preapproval so don't expect they would decline so I wouldn't be able to pull out under that clause either even if in the end for some reason I wanted to?

 

[alexlee]

on finance my bank has given preapproval so don't expect they would decline so I wouldn't be able to pull out under that clause either even if in the end for some reason I wanted to?

Preapproval doesn't mean actual approval. The valuation can come in low, for example.

My point is that the standard Qld contract shouldn't have the 5 day cooling etc.