Letter of offer with a cheque?

buckerooni

buckerooni

Hi All,

I've been reading up on a few approaches to making an offer, in Michael Yardney's book it mentions including a cheque 'to be for part of the deposit, maybe a few thousand dollars'. This is to add to the sincerity of the offer.

Does this cheque (if the offer is accepted) go into the solicitors/holding account?

Anyone had any experience with this?

Thanks.
 
The most sincerest form of offer is to exchange contracts. A holding deposit means nothing. It might show that you're keen, but the seller can gazump you if they receive a higher offer.
 
buckerooni said:
I've been reading up on a few approaches to making an offer, in Michael Yardney's book it mentions including a cheque 'to be for part of the deposit, maybe a few thousand dollars'. This is to add to the sincerity of the offer.

Does this cheque (if the offer is accepted) go into the solicitors/holding account?

Anyone had any experience with this?
Click to expand...


Assuming you're buying where you're located;

Making an initial deposit is quite common in Vic, where an offer usually becomes a binding contract upon signature from both parties. The funds are banked in the agent's trust account, so the only real risk is the opportunity cost on those funds between offer and acceptance.

Like most things during the offer and negotiation process, providing a cheque upfront is just a tool. Sometimes, it might help get the deal across the line; others, it won't make any difference.
 
A sincere offer (aside from the actual amount) is an unconditional one. Gimmicks like attaching a cheque to the offer are irrelevant imo.
 
i tried it in the early days and it never worked ... and only made me look like a goose when the agent had to either return the chq because offer not accepted, or write a new one when it was.

just more mucking around for the agent imo. a sincere offer is worth more.
 
lizzie said:
i tried it in the early days and it never worked ... and only made me look like a goose when the agent had to either return the chq because offer not accepted, or write a new one when it was.

just more mucking around for the agent imo. a sincere offer is worth more.
Click to expand...

As James said, it's pretty standard here in Victoria to submit a cheque with the offer. I've had agents request anything from $500 to $10K. The $10K one I was a bit puzzled by being so much more, the agent never banked it and when my offer was rejected they just gave me the cheque back. I don't care if an agent requests $1,000 (seems to be the most standard I've had) from me, like it has been said, it just goes into the trust account and if that's what they require in order to think I'm serious, so be it. If you want what they have, then sometimes you just have to play their game.
 
I tried it too when I was househunting a few years back but it wasn't in the same area as me and someone else snagged the house first.

It was a 3br stone house in Quorn for $12,000 :)
 
Have recently sold in Melbourne prior to auction.

The offers were all accompanied by 10% cheques. I won't look at an offer unless the purchaser indicates that they have sought legal advice on the s32 as otherwise the cooling off period applies.

The cheques were returned to the losing offers immediately.
 
I thought you were meant to hand the agent a brown paper bag with the letter of offer to go and "talk to the vendors" :eek::D

The Y-man

(only joking!)
 
I have some properties for sale. Can I have an offer with a cheque please :):)

seriously though, it can signal that you are serious and make it easy for the agent to just cash in the cheque after cooling off but a deposit does need to be paid after cool off anyway whether the agent has a cheque or not.

Try chocolates, they can work well too and if you do please buy one of mine ;)
 
We are in the last days of buying a property now. We haven't provided any deposit, except our word.
This is a private deal though
 
Update: instead of being my offer being rejected (not a real dirty low ball but def below market) they asked if I was ready to sign a contract and pay the deposit. I said yes.

As I gave alot of reasons over the phone about the offer price they know I'm serious but price aware.

As my offer is unconditional, flexible around vancany/tenancy of the vendor and expires tomorrow at 5pm we'll see how we go. Must read up on other threads about how to qualify counter offers (if there are any tomorrow).

Haven't been involved in this type of sale before so trying to keep it cool :D
 
I have never provided cheque when making offer. I find experienced agents can pick up well whether you are genuinely interested or not ... I have dealt with some agents where they try to bully me into providing a cheque to show 'genuineness'. I tell them that I find it insulting for them to think I'm not being serious. They usually dont press for it any further than that and convey my offer .......

I have never sold a property, so looking at it from a vendor's perspective, I'd prefer an offer with cheque .........
 
jigglypuff said:
I have never sold a property, so looking at it from a vendor's perspective, I'd prefer an offer with cheque .........
Click to expand...

Last time I sold a property was 1990.
If I was selling property now, and if it came with a nonrefundable deposit..yes it would make a difference.
 
thanks for all the replies, it's great getting different perspectives on techniques.

the signed contract seems like the go next time - good tip! Will also have a much smaller offer window (I gave 2 days) as it just drains you - hard to focus on other work! This is for our future PPOR so my mindset is half IP and half PPOR...

after the knockback, waited until offer had expired and offered another 10K (approx 2% of offer) and was told I was 'close'. Get sick of that game pretty quick! I think it was a reasonable amount so I'm gonna duke it out on auction day.

It's been a poorly run campaign - horrible photos, backyard unavailable due to mangey dogs (and lots of poo!) and a small agency, not their normal area, not many properties on their books and I'm guessing not too many prospective buyers in their books either.

they didn't engage other parties when I made my offer, so I'm thinking two things:
1. vendor already in 'auction mode'. it was mentioned the vendor wants to go to auction now, even though my offer was made on wed, the auction was still 1.5 weeks away. Previously they were open to offers but now maybe not unless its super high
2. no other interested/serious parties to counter

If it is 2, I did mention that I will not be attending auction (interstate and incontactable) so they will effectively lose me as a potential buyer. Either they didn't believe me, take this as not 100% interested or they do have other interested/serious parties that they plain just didn't call to start a pre-auction bidding war. I'd be interested on people's take on this.

All part of the (double guessing) games I guess...
 
Last edited:
Faxed through offer.

now waiting to hear form the agent

been 1 hour and I'm getting toey cause I haven't heard back yet ?


should I be ?
 
I rang up shortly afterwards just to confirm they had it, and mentioned some recent sales to back up my offer price etc.

next time I'm going for a short expiration period, it was a long 48+ hours!
 
You must log in or register to reply here.

Similar threads

S
Lowball offers, questions.
2
Replies
25
Views
9K
Big Will
B
R
Urgent - Beating an "accepted" prior to auction offer
Replies
15
Views
3K
cadence
C
M
contract gurus....
Replies
3
Views
1K
Peterw
P
S
Contract for purchase - help checking?
Replies
15
Views
3K
SaberX
S
D
Calculating Yield and general Excel trickery
Replies
3
Views
1K
Chris B
Chris B
Back
Top