Losing 10% deposit

Oscar

Oscar

As some know I have recently "sold" a property at Newport Beach, NSW. The purchaser is having problems completing and we have issued a notice to complete within 2 weeks charging 8% interest along the way.

The 10% deposit by the purchaser was paid by a deposit bond. Anyone have any experience with this? Purchaser not completing and dealing with insurance bond issuer for the 10%?

While I feel sad for the purchaser, financially speaking, I wouldn't mind the 10% and my house back. What a nice little wind fall.:)
 
So no one feels for the vendor, who has signed up to sell, been mucked about for months and now the buyer can't complete, vendor missing out on possible rent income but still having to pay all costs.....?

Deal or no deal...contracts state deposit is the penalty for non completion.

I'm sorry oscar, I have no experience with deposit bonds but sure someone else here is, maybe terryw?
 
strongy1986 said:
You obviously don't feel sad for them
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not so much, no. A contract is a contract and I will apply it with great vigor until we have a contractual arrangement meaning I get paid in full and hand over the property, or enjoy the fully agreed penalty clause/s and keep the property. They have a couple weeks so it's not over yet. I'm in no rush following up on their plight.
 
Oscar said:
not so much, no. A contract is a contract and I will apply it with great vigor until we have a contractual arrangement meaning I get paid in full and hand over the property, or enjoy the fully agreed penalty clause/s and keep the property. They have a couple weeks so it's not over yet. I'm in no rush following up on their plight.
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Just check your sale agreement with the selling agent too. More than likely they will be able to claim their full commission on the contract price out of that deposit.
 
Ridiculous, no sale made/settled.

Most I would give them would be 10% of the deposit.

Why would they deserve any more than this?
 
Oscar said:
not so much, no. A contract is a contract and I will apply it with great vigor until we have a contractual arrangement meaning I get paid in full and hand over the property, or enjoy the fully agreed penalty clause/s and keep the property. They have a couple weeks so it's not over yet. I'm in no rush following up on their plight.
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I have never used deposit bonds, however just out of interest are you sure you get to keep 10%, is it in the contract?

I agree that if the sale does not proceed you need to be compensated, ie lost time, money, if it has to go back to market it may spook some buyers... why is it back on market something wrong with property. There is always a possibility that you will need to drop the sale price.

So what is 10%, $100K??? This will give you room if you need to drop it, also holding fees while trying to sell it again.

Personally, I like to move on, $100K nice but it also opens another can of worms.

Good luck
 
VYBerlinaV8 said:
I wouldn't. People who enter into contracts without knowing what they are doing and then crying 'poor me' are the reason we have so many nanny-state laws.
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I just thought it was funny he would say that when he intends to take 100k off them
Not saying its the right or wrong thing to do
 
The Fence said:
Ridiculous, no sale made/settled.

Most I would give them would be 10% of the deposit.

Why would they deserve any more than this?
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From my limited experience in selling, it's a standard in NSW residential sale agreements. So unless you specifically negotiated it's removal it would be there hiding in legal speak I'd say;)

I had this happen to me a while ago, however my property was rural and the clause is slightly different for rural. The agent assumed it was the same as residential and would not release the deposit to me. Eventually after involving dep of fair trading they handed over the deposit.

It's now a clause I'm very aware of for future sale agreements!
 
I would take the 10% deposit, set it aside until a sale actually went through then calculate lost rent, interest, and then the difference in the sale price if lower, deduct that from the 10% deposit and then give them back the remaining if there is any. And maybe take a 1% fee for the screw around.

To take the full 10% when it doesn't cost you anywhere near that wouldn't sit well with me personally.
 
The Fence said:
And what if those calcs went over the 10%...? U reckon the (non)purchaser will compensate you?
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Because they could hypothetically do the wrong thing you should definitely do the wrong thing?

I don't think so. But look this is personal opinion. And probably not a great business strategy. Feel free to be as cut throat as you like. But personally I expect others to screw me over in life, but I'll do the right thing anyway.
 
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