Hi Jewel
How about an update? Did you give a one dollar deposit?
This one is interesting…
As a vendor, I wouldnt accept a $1.00 deposit on a contract, and if I had more than one contract to decide on (several offers on the property) I would disregard the one with a $1.00 deposit and consider a purchaser who is being serious. If you cant come up with $1000, or even $500 as a deposit then dont bother. Keep saving. Go down the shop and buy a bag of lollies
I would prefer someone offered no deposit (or their left shoe) than 1 buck, its cheeky and could be considered as offensive.
Are you investing professionally or are you just trying to embarrass yourself? [gossip]
Dev [kid]
No deposit would be less offensive than a buck, my offer’s are always no deposit and subject to finance, white ant and builders inspection. Vendors acceptance in the case of land if I’m cashed up.
RegardsI do not see the difference as you can not access the money until settlement anyway, at wich time you get all the monies owing.
CATA
Asset Protection Specialist
[email protected]I think you will find that a payment represents the third part of a contract (ie offer, acceptance and finally consideration). This binds the document into a contract. Taking more than a “peppercorn” for a deposit is by agreement between the buying and selling parties.
Chris Durman
ebank.com.auPeople often do not realise that the promise to pay the contract price is not consideration. That is ‘acceptance’ of the ‘offer’. Consideration must have nominal value.
TMA
http://www.email4money.info
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First Home Buyer WebsiteThe way I understand it is you are not obligated to place a deposit at all. Although the standard (because most people believe this is law) is 10% there is no law requiring any deposit at all.
However agents do like 10% deposits as the deposit usually covers their charges to the vendor (their client). That way they know the deal is done and they can invoice the vendor.
Think about it: you can always “have a chat” with the agent and advise them that you are an investor and you only place $1000 deposits to free up your cash so you can acquire further properties. Then ask to see what properties they have on their books. You never know – they may have a deal or two ready to be purchased. That way the agent is scratching your back and you’re scratching his!
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Hi Jewel
Here’s my 2 cents worth.
There seems to be different accepted practices in different states.
When I’ve bought property in NSW 10% was expected, in Queensland they nearly fell over when I offered 10%- all the agent wanted was enough to cover the agent fees. I understand that in WA no deposit deals are the ” gentlemanly” way of things.I think there are two opposing considerations. The first is to show you are serious and to ward off competing offers- $1,000 should do this if your price is near market.
The other consideration is tying up your capital- if you put in 10% and the vendor stalls for 6 months and the deal doesn’t go ahead- you are entitled to your deposit back– however it may take some time- in the interim you are out of pocket and not able to use those funds.Cheers
I understand that in WA no deposit deals are the ” gentlemanly” way of things.
This is correct.
Regards [exhappy]
http://www.owner.com.au
http://www.owner.com.au/phototour/listing_phototour.cfm?listingid=22315There is no problem with paying $1 deposits if you can get away with it good on you.
I myself have purchased properties through options where I have paid $1 for the option fee for upto 12 months. I’ve done this twice and made six figures both times.
L M C
http://www.ampg.com.auDeposits have absolutely NOTHING to do with agent fees. An Agent does not get paid until settlement. Securing a deposit does not mean a property will settle.
TMA
http://www.email4money.info
Investor Links
First Home Buyer Websitevery true. if I was a Seller and you offered to buy my property on 5 cents deposit I would reject it, especially in todays market. I think a lot of people believe an unconditional offer will just sail through to settlement – unfortunatley it is common for settlement not to occur for whatever reason and at least a decent deposit protects the Seller in this event. There is absolutely no benefit to the agent though as the property has not settled! What it does mean is that if the Seller refuses to pay the commission upon successful settlement and there is a decent deposit in the trust account, the commission is paid straight away.
http://www.megainvestments.com.auJohn Carroll
Personally, I can’t see why not, you just have to have a dollar figure regardless of how much, as long as the balance is paid on settelment and the vendor agrees…
Roy H.
L.R.E.A., Dip FS (FP)
Guardian Property Specialists (GPS)
http://www.gpsnetwork.com.auHi,
Dont know but from my short experiences so far. I have made 2 offers with 0.25% deposits and were both accepted. But with the recent one, I made an offer with no deposit at all. And the property has been taken off the market with no cooling off period and I have not signed anything. Technically the agent can just sell it to someone else, but why would they do that when they already have a serious buyer. The initial deposit just go into the agent’s trust account, so if you can talk to them and say you are tight with money elsewhere they would be more than happy to come terms.
If the agent has taken a property of the market for you withno deposit and nothing signed, I would say you are buying a ‘lemon’!
TMA
http://www.email4money.info
Investor Links
First Home Buyer WebsiteWe often have our blocks put on hold for a Wk, with no deposit and nothing signed.But the agent has not taken a property of the market, just put a red dot on it.
Regardshttp://www.owner.com.au
http://www.owner.com.au/phototour/listing_phototour.cfm?listingid=22315I would never accept a $1 deposit if I wanted to sell.
I think it’s crazy that this happens in real estate.
Imagine the buyer going shopping and buying a pair of shoes on lay-by with a deposit of say $10 for a $100 pair of shoes.
Then, walks into your property, and makes an offer, wanting to give you a $1 deposit!
HHmmmmmmmm [confused2]
(Edited by me because of an error)
Celivia
Whats the deal in Hobart? My partner found a nice unit on the internet she would like us to buy. The advertised price range is 140-175k. I was in the process of trying to establish a savings history so I could get a full featured loan. If her nesting instinct decrees that we have to buy now then we will have to go with a loan that doesnt require a savings history but doesnt offer things like an offset account. At what stage would you offer the deposit? do you write your conditions on the contract (finance/building inspection/no conveyancing issues) set your price and then hand over a cheque (or cash if your keen) for 1k?
More stuff on the voigtstr at http://users.bigpond.net.au/voigtstr
Celivia..You dont get the deposit anyway, it sits in the REA Trust account.
Some REA’s are happy to take $100 if they know you are an Investor..I’ve had some suggest it even..
I’ve never gone below $100 though..I have a friend who regularly does though..however, on the upside he lowballs and offers very quick settlements..
REDWING“Money is a currency, like electricity and it requires momentum to make it Effective”
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yes I do realise that the deposit sits in a REA trust account, but isn’t the point of a 10% deposit a security thing- to protect the vendor (and cost of REA etc)if the buyer suddenly changes his mind after the cooling off period?By then the vendor has probably taken the property off the market for example and has some solicitor’s costs etc?
In that case the ‘buyer’ loses a percentage (perhaps about 2.5%?) to cover the vendor’s losses?
$1 won’t cover a lot!
I’d feel a lot more secure with a deposit sitting in my REA trustfund of $25,000 which will cover my losses and/or make up for the stress of having been messed around with.Edited by myself because of an error.
Celivia
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