Sale falls through, who recives the .25% deposit?

I had a property sale fall through.

On signing the contract, $1000 was paid. Buyer pulled out during the three day cooling off period.

Who collects the $1000, the vendor or the agent?
 
Best time to ask this question is before appointing an agent.

I would expect the vendor to keep it - or at the very least the agent to keep it as a part payment of the commission when the property is sold.
Marg
 
Generally, I would see the deposit being held in the Agent's trust account. Unless it is stipulated that the deposit is non-refundable, the Buyer will be entitled to his deposit back. In some cases, the Seller/seller's solicitor will claim the penalty (0.25% in Qld), but oft times not and the Buyer is refunded the whole of his deposit. We tend to find that because of the penalty, the majority of buyers make use of their finance clause to terminate the contract. No doubt, it may be different in other states.
Frizzle
 
mr-ed, the termination penalty is yours. The agent only becomes entitled to commission once the contract becomes unconditional, which never happened. :)

Good luck with your next sale!
 
mr-ed, the termination penalty is yours. The agent only becomes entitled to commission once the contract becomes unconditional, which never happened. :)

Good luck with your next sale!

I think we should clarify which states we're talking about here. In Queensland this is not the case.

If the purchaser terminates the contract under the cooling off period, the 0.25% penalty is to be divided equally between the Vendor and the Agent as per the PAMD 22a.
 
I had a property sale fall through.

On signing the contract, $1000 was paid. Buyer pulled out during the three day cooling off period.

Who collects the $1000, the vendor or the agent?
Go back and look at your contract,or next time insert a special clause in the Special:) Conditions,that covers you not the agent,after all you are the one left holding the can at the end of the day..willair..
 
Go back and look at your contract,or next time insert a special clause in the Special:) Conditions,that covers you not the agent,after all you are the one left holding the can at the end of the day..willair..

Just keep in mind if you are interested in doing the above, it should be stated on the listing agreement rather than the contract. This is the case for QLD, unsure about other states.
 
I think we should clarify which states we're talking about here. In Queensland this is not the case.

If the purchaser terminates the contract under the cooling off period, the 0.25% penalty is to be divided equally between the Vendor and the Agent as per the PAMD 22a.
Joel,if the agent is smart and wants to keep the listing one would think they would pass on the $$$$ too the vendor,what's 1k when if you keep the listing you get paided anyway,,but i know from experience it can get real ulgy when the dollars are above 25k,and the buyer pulls out of the sale,afterall a sale is not finalised until settlement..willair..
 
Joel,if the agent is smart and wants to keep the listing one would think they would pass on the $$$$ too the vendor,what's 1k when if you keep the listing you get paided anyway,,but i know from experience it can get real ulgy when the dollars are above 25k,and the buyer pulls out of the sale,afterall a sale is not finalised until settlement..willair..

From a best practice point of view, you are entirely correct and this is the practice we generally follow. It is often worth allowing the vendor recieve the entire amount in the interest of keeping things harmonious.
 
I think we should clarify which states we're talking about here. In Queensland this is not the case.

If the purchaser terminates the contract under the cooling off period, the 0.25% penalty is to be divided equally between the Vendor and the Agent as per the PAMD 22a.
I can't see this anywhere on the PAMD 22a. :confused: I can see that an agent could possibly insert something in there to the effect that they're entitled to a portion of the termination fee, but it doesn't appear to be part of the standard form (unless this Jul 09 version has been updated?).

I'm not saying you're wrong, I'm just saying that I'd like to see a reference. The agent doesn't get anything if a buyer pulls out due to failure to meet conditions, so I don't understand why it should be different if a buyer "cools off".
 
I can't see this anywhere on the PAMD 22a. :confused: I can see that an agent could possibly insert something in there to the effect that they're entitled to a portion of the termination fee, but it doesn't appear to be part of the standard form (unless this Jul 09 version has been updated?).

I'm not saying you're wrong, I'm just saying that I'd like to see a reference. The agent doesn't get anything if a buyer pulls out due to failure to meet conditions, so I don't understand why it should be different if a buyer "cools off".

Oz,

No worries at all. Your July '09 22a is the most recent and s12 is the one you're looking for, specifically below s12.2(3) being the most relevant.

Edit: Sorry i've just realised you're viewing a PAMD 22a with no attached conditions. You will find 99% of agents with be using the REIQ PAMD 22a which has a schedule of conditions attached. Happy to send you a copy if this if you would like to have a look.
 
Oz,

No worries at all. Your July '09 22a is the most recent and s12 is the one you're looking for, specifically below s12.2(3) being the most relevant.

Edit: Sorry i've just realised you're viewing a PAMD 22a with no attached conditions. You will find 99% of agents with be using the REIQ PAMD 22a which has a schedule of conditions attached. Happy to send you a copy if this if you would like to have a look.
I see, this one. :)

mr-ed, better go check your PAMD 22a!

And thanks, Joel, for pointing out another thing to add to my list of amendments to "standard" agreements. ;)
 
No worries at all Oz.

I would be very surprised to see any REIQ accredited agency using any other PAMD 22a so definitely something worth considering when appointing an agent. I would personally have no problem with a client wanting to delete this clause from the agreement.
 
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