Hi there.
I put an offer in for a place with just over 5% deposit when contract was signed. Seller agreed to all terms and we were going to get the contract drawn up.Couple days later the real estate rings me up and says you will have to put down 10%. I said ive never offered 10% before for a property. ( i have dealt in QLD) She said well things are different in NSW.
So all the NSW people is this correct? Is it a contract rule in NSW to have 10% on the contract? Because I like the property but i really dont want to tie that much money up. I am going to ask my solicitor monday but thought id get some feedback from you guys
Thanks
Spoodle– My understanding(not advice) is that in N.S.W. before a property can be offered for Sale there must be a Contract for Sale in place. Therefore the agent should have shown you a copy of the Contract so that you would have seen the Terms such as “deposit on exchange of contracts is 10% .” the usual amount is 10% but it could be any amount. You can ask that the Terms of the Contract be varied e.g. That you pay 5% deposit .It is then up to the Vendor to accept or reject that change to the Contract. Then over to you whether you accept their Terms or changes.
Hi Spoodle,
From this website
http://www.fairtrading.nsw.gov.au/realestaterenting/buyingselling/buyingprocess.html
At the time of the exchange (of contracts) you will be required to pay a deposit, usually 10% of the purchase price. Following exchange, you have a financial interest in the property so it’s wise to get it insured.
Note it says usually – not must be.
You could also contact the Office of Fair Trading on 9895 0297.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958Ok then. Thank you for the replies
hi – have not brought a property in NSW for a year or so but 5% has always worked for me.
regards
Don
D&L Property Projects Ltd
Sourcing Quality Investments in New Zealand.Email to receive current deals & New Zealand Information Sheet.
[email protected]Hi
We often pay small deposits. Quite often only enough to pay the agent’s commission. We have found a “middle ground” that quite often works for both parties is that we pay our small deposit and the lawyers add a clause to the contract saying that if we don’t settle will will be liable for the full 10% deposit. Keeps the vendor happy and does not tie up so much of our money.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Hi, there,
I do agree with other comments that you don’t have to pay 10% deposit as the deposit figure is to be agreed between the vendor and buyer.
I bought my PPOR last year at auction and prior to auction, I had an agreement from the vendor’s solicitor (in writing) that a 5% deposit was acceptable.
However, my understanding from your thread was that you signed the contract with a 5% deposit as an offer and I assume you have not received an agreement (in writing) from the vendor. if this is the case, you don’t have an agreed amount of deposit for the property. If the vendor insists on a 10% deposit, that is his/her terms and conditions. It is up to you to negotiate with the vendor.
As far as I know, there is no specific requirement for a minimum 10% deposit in NSW. It is up to both vendor and buyer to agree on a figure which will then be stated in a contract signed by both parties.
Hope this helps.
Raymond
Al ltrue enough but I recently found out why 10% is often insisted upon by the solicitors.
Seems that 10% is typically a figure that covers all expenses and penalties if you default on settlement. The solicitor likes to have that in the trust account so if the worst eventuated they don’t need to chase you for it.
Of course a lower deposit is possible if both parties agree.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
hi sP00dLe
couple of things
first 5% is ok in nsw I usually pay less
a real estate would love you to pay 80% if possile up front put thats not going to happen.
I like a deposit under 5% via cheque and tell the solicitor via the back of the cheque that the account that the cheque is to be deposted in must be mutually agreeable.
it gets you another couple of days to check everything and they can’t deposit it ( the last one was 3 week in which case I got funding and they gave me the cheques back) held the site with nothing.
the real estate loved me so much they are ringing me with deals( indians never seen it before).
you can hold a site in nsw with any money down above $1.00, 50 cents is not acceptable and a signed contract.
best bet is give a 2 or 3 persent deposit, sign the contract, and ask that the vendors allow a caveat to be put on the site to cover your deposit cost $70 .00
do this and they are lock into sell to you as they can’t get the caveat off until you settle and protects your deposit
any thing over $1,000.00 caveat
real estate hate it your solicitor will love you.
my .002here to help
If you want to get involved in some of the projects I’m involved in email to [email protected]As far as I know 10% is only a nice round figure that the agents insist on, I bought a property in Sydney with no deposit, you can put a deposit of as much or as little as you want as long as the vendor agrees to it. So don’t let the agents tell you that you have to put down 10%, just for that I would lower the deposit to 1% to teach them a lesson. If the agent is smart they will try to close the sale or they won’t make the commission.
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