I am about to write and fax off an offer for a property I am wanting to buy and I would like to know how much deposit shall I say I will give on the acceptance of the offer?
My offer will be for $70,000.
What date shall I give that the deposit shall be paid? When the contract is to be signed?Also, my lender says to just put in, ‘subject to finance’. Should I put subject to building inspection as well?
With the finance clause should I be more specific and write ‘subject to xx lender approving loan for xx amount?
Should I specify a settlement date or just mention am wanting a quick settlement? The property is empty and owner lives in another house.
Any help much appreciate please.
Thanks
Can someone please reply quickly (except knowitall) as I need to fax it off this morning.
Personally, I wouldn’t be too specific with respect to the finance clause. Subject to finance is really all you have to include. As for Building and Pest inspection, again this is standard so wouldn’t worry too much.
In the end it comes down to the risk you wish to carry. If finance is an issue, put it in. If the building report is critical, again put it.
Just remember, you can regotiate down but up can be difficult so put it in and start negotiating!
Thanks for your reply jhopper.
I ended up just keeping it pretty basic with just my details,
property details, offer amount and then I just put down ‘subject to’ finance through X lender and then ended it with the offer expiry date and date/signature.My lender said that the REA would specify how much deposit they needed. So I just went with that.
Now I just wait to see if it will be accepted.
Thanks again.
Hi,
The amount of the deposit is not a mandated quantity, nor does it help or hinder the vendor. The deposit money is help in trust upon settlement where it is released to the vendor as part of the settlement money. As such at $1 deposit is legally and financially similar to a $1,000,000 deposit. Failure to settle after the contract has gone unconditional results in a default payment based on the amount of the property. This default payment is firstly taken from the deposit and the rest taken from the purchaser. So the only reason a vendor should feel more comfy with a larger deposit would be if the (I think) .2% default amount is quite large and it is likely that the purchaser will default.Given that it is a $70,000 property the default amount would be $140 for breaking the contract (probably might get chased after for some legals and interest). But I’ve found if I point out to the realestate agent that I’m not wandering the steets (metaphorically of course) with $7k to have sitting in a trust account for several months doing nothing they have willingly settled with $1,000; easily enough to cover defaults or late settlement or what have you and enough to show I’m serious, but not so much that I have to liquidate valuable assets (shares, managed funds).
I bought in WA a $179k block of beach land on a $1,000 deposit after the REA asked for 10%. Given the above reasoning they agreed no worries and off I went (land now settled).
Surrey.
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