NSW Deposit - is 5% mandatory?

[ChasingSugar]

Hi there,

Anyone in NSW know if the 5% deposit is mandatory in NSW? In Vic my past 5 purchases saw a 500 deposit (total), the remainder on settlement. Agents kick and scream, but it gets done.

If you're a good negotiator, can you do less than 5% and the balance at settlement??

Thanks!

 

[Aaron_C]

Yes you can. Even in Victoria the 'standard' is 10% but you can make alternative arrangements.

 

[ChasingSugar]

Cool - thought as much. Thanks so mcuh for the prompt reply!

 

[Peter_Tersteeg]

The minimum deposit is whatever to can negotiate. I've seen people buy houses with $0 deposits, although 5% is far more common.

The maximum in Victoria is 10%, they can't receive more than that.

The agent's primary motivation for getting a larger deposit is so their commission can be paid when the purchase contract is unconditional or exchanged. Even if the sale falls through later, they're entitled to their commission, so if they've got enough in the bank to cover it, they'll be happy. The vendor gets the leftovers.

 

[Suzy912]

Yep, it's up to the parties to negotiate how much the deposit can be. In a former life I was a conveyancing clerk in NSW and we saw everything from 0 to as much as 10%.

 

[Shahin_Afarin]

Hi there,

Anyone in NSW know if the 5% deposit is mandatory in NSW? In Vic my past 5 purchases saw a 500 deposit (total), the remainder on settlement. Agents kick and scream, but it gets done.

If you're a good negotiator, can you do less than 5% and the balance at settlement??

Thanks!

It doesn't work that way - you do not deal with the agent. Your solicitor would need to formally liaise with the vendor's solicitor and agree upon the 5% (or any other variation) deposit.

 

[ChasingSugar]

Thanks. So you would have your conveyancer negotiate that after you negotiate the deal? I try to agree to all up front, but will get in touch with a conveyancer stat before deal acceptance.

I find it unusual as surely the seller and their conveyancer shouldn't care, it's only the agents fees (per above) that is impacted?

 

[AlmostBob]

It doesn't work that way - you do not deal with the agent. Your solicitor would need to formally liaise with the vendor's solicitor and agree upon the 5% (or any other variation) deposit.

nope, not even close
we tell the agent, what deposit we will make,
ignore anything the vendor or agent wants
walk away is a great buying tool

 

[Pins]

It doesn't work that way - you do not deal with the agent. Your solicitor would need to formally liaise with the vendor's solicitor and agree upon the 5% (or any other variation) deposit.

I just negotiated a 5% deposit through the agent - he liaised with the vendor and it was easy.

 

[Scott No Mates]

Generally the agent only cares about being able to cover their commission but I prefer to make the solicitor the deposit holder and make the agents wait. The thing with the deposit is that it's only required to make the contract valid oe payment of consideration so this can be as little as $1.00

 

[Ed Barton]

Generally the agent only cares about being able to cover their commission but I prefer to make the solicitor the deposit holder and make the agents wait. The thing with the deposit is that it's only required to make the contract valid oe payment of consideration so this can be as little as $1.00

I'm sure the lawyers will soon arrive to slap me or congratulate me...

In general contract law, consideration can be a promise to pay a monetary amount in the future (or two fattened pigs and 3 virgins). Generally a contract is valid even if a 'deposit' is not paid.

Yet I've read here that fair trading NSW require a monetary deposit to have been paid to make a contract binding. Is that so?

 

[ChasingSugar]

I offered the pigs and virgins - cheers for the tip. No deal.

So they have advised that the sellers conveyancer won't let the deal go with that deposit, based on the fact that if it fell through, they would be owed 10% of the deal, yet only hold a smaller amount!

I've gone with the walk away option.

Also - is conveyancing more expensive in NSW? Here I pay approximately $800 per property. Up there I had one referred and he is offering 2K!

 

[thesuperman]

Yep, it's up to the parties to negotiate how much the deposit can be. In a former life I was a conveyancing clerk in NSW and we saw everything from 0 to as much as 10%.

I've previously heard that there has to be some sort of "consideration" provided as a deposit to make the contract legal. It doesn't have to be cash, but could be anything, like a car, tshirt, basically anything, but something has to be given as a deposit to make it legal.

 

[Peterw]

The "consideration", is what is paid for the "goods or service". Its prudent for a seller, to receive part of the "consideration" by way of a deposit. This can be refundable or non refundable, depending on what the agreement is. Some sellers view the level of deposit, as to how serious the buyer is. Each to their own.

 

[HotRod]

I like to put an amount for the REA's commission (or thereabouts) down as a deposit.

Does something funny to REAs, knowing their commission could be sitting in their trust account if they get their seller to sign and us as the buyer to agree.

 

[Scott No Mates]

I offered the pigs and virgins - cheers for the tip. No deal.

I couldn't find any virgins, so the deal was off