Hi All,
This is my first time making a offer for a IP, quite daunting. Im currently in the process of structuring a letter of offer and would like to hear from anyone on their input for anything i have missed or improvements to be made.
The RE agent has ask for a holding deposit of $1000 before any offers can be made.
I was also hoping someone could help me phrase this into the letter of offer, so if I decide not to go ahead with the offer due to the building/pest inspection, etc, then I would get back my $1000 holding deposit.
Also, should I also add in details of how many days the building/pest inspection/5% or10% deposits should be performed/paid?
Below is what i have come up with so far.
Thanks in advance for your inputs.
Letter of Offer (Confidential not to be disclosed)
Property Details:
Agency:
Purchasers Name:
Phone:
Offer Price:
Other Conditions of Offer:
1. Deposit of 5%
2. Subject to my satisfactory Building Inspection
3. Subject to my satisfactory Pesticide Inspection
4. Subject to Full finance approval (finance pre-approval already obtained)
5. Settlement 30 Days after all conditions have been metExpiry of Offer: This offer will expire within 48 hours of the offer being made.
Signed:___________________________
Name:
Date:Hi Mate, long time lurker, first time poster.
To answer your questions;
Not sure why you need a holding deposit to even place an offer? sometimes deposits are placed at the offer stage, but not sure why before?
Anyway, firstly beware of holding deposits as the name is a little deceitfull.
I’m an ex estate agent from NSW, and a holding deposit does not guarantee you the property in the event that an offer is accepted, you can still be out bid, so to speak. All it means is that if a higher offer comes in that the vendor accepts then the agent MUST make you aware of it, thus giving you an opportunity to up your offer.
Remember only an exchange of contracts secures you the property
Yes the deposit is 100% refundable prior to exchanging contracts, you will lose 0.25% if you pull out during the cooling off period, and the total deposit if pulling out after the cooling off period has expired (usually 10%, sometimes 5%, not uncommon)
Yes add in conditions to your offer; P&B, requested deposit amounts etc.
If you have finance approved mention this, help make the offer more legitimate.
Remember negotiations are give and take, you conditions seem fine, but don’t let a sale fall over, over something small (eg vendor request 35 day settlement, no 30 etc)
Hope this helpsThanks Ryan_vs, that was very helpful information.
Sorry just to clarify that the holding deposit is payable with offer being made.
No problems, jasedc5r
The deposit isn’t entirly necessary when offering to be honest, It is a must to exchange the contracts though.
To be honest, during the offer stage the deposit is more so a sign of ‘commitment’ so to speak, a show that the offer is genuine.
It’s pretty powerfull as an agent visiting a vendor with a signed contract and a $25000 deposit cheque.
If your agent requires a deposit cheque, humour him/her, it is refundable if you dont exchange contracts, so it’s nothing to lose. its just more so just a token gesture during the offer stage.
Oh, most of what is say is NSW legislation by the way, not sure of other states.
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