Hi everyone,
Could anyone tell me what the legal requirement or normal procedure is for when a 10% deposit is required to be paid on the purchace of an established unit in Melbourne.
We recently agreed to purchase a unit by private treaty and when the R.E Agent arrived for me to sign the Purchase Contract he demanded the full 10% deposit. I was under the impression I would have to pay a small holding deposit and the balance of the deposit in say 14 days. The settlement date was to be in 70 days. I realize the full deposit is required on the day at auction so you go prepared with deposit monies, but this was private treaty. Is this normal practice ?Postscript.
Unit was due to settle on 13/1/11 but did'nt because vendors were unable to get the title from Brisbane bank (due to flood) so now the settlement has to be resceduled. Having paid my deposit and also adjustments for settlement totaling $81,000 which includes shortfall bank would not finance my conveyancer says I have to grin and bear it.
Is this normal practice ?My understanding is you can negotiate the 10% deposit date as long as a fee of intention is paid. The full deposit is really due to ensure the offer goes unconditional, so that could be anytime within the 14 days it takes to get finance approved or building inspections etc.
Many agents expect it when you sign the contract but thats a bit of spin to make sure they have their commissions in the trust account. Looks good for them back at the office maybe at the Monday morning sales meeting.
Re the settlement date, a protection to the buyer can include a clause that protects your financial commitment if settlement is delayed. eg: 7% interest payable on funds in the deal to be deducted from the sellers payout. A bit late now but worth looking into for future purchases.
10% is a bit ridiculous sometimes. Alot of agents are very adamant about it especially in Melbourne. I have found in QLD and Tas they are alot more flexible and deposit can start at only 2k. I have always found this a funny issue as the money sits in a trust account anyway.
Thanks for your responses.
I have bought a few properties mainly in the outer eastern suburbs of Melbourne and have found most R.E. Agents to be reasonably helpful and accomodating to get a sale, but I think inner city agents seem to be a different breed maybe because they don't have to try so hard for a sale. The impression I got was take it or leave it.
Am I on my own here ?late/delay settlement is very common… especially during christmas period.
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