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Upfront deposit - the only way to test a buyer's bona fides?
Comments
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Why is it "lacking openness" to not want to pay a deposit up-front on a property before even having done searches, surveys - heck, before having even viewed the place (albeit only £5)?
To me, such behaviour as you describe suggests that the seller is the one lacking openness, not the buyer. In today's market, sellers cannot afford to alienate potential buyers, even if it means having to put up with the odd time-waster.
Like I said above, I do agree that things should be fair and people shouldn't be able to just back out of deals agreed - but it's not always that simple.
Yes but that is in 'today's market' and it could be 'that simple'. All that is needed is a relatively minor change in the law - you know, the kind of thing that would make life much simpler, better, and less prone to trouble but which the politicians are always somehow far too busy to bother with in this country...0 -
Out of interest, how would you legalise such a thing?0
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A read through a couple of pages of posts on this board tells me that there many sellers are also guilty of a lack of "transparency". Plenty of buyers on here spending a £1,000 or more only to find the seller backs out; seller accepts a higher offer; seller has hocked the property to more than one secured loan in addition to the mortgage etc etc.
I'm not sure about the terms of the deposit. You say it's non-refundable .... when do I pay this? Before I view?Warning ..... I'm a peri-menopausal axe-wielding maniac
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It certainly wouldn't be a simple legislative decision. You can't simply take a non-refundable deposit at the start because the entire conveyancing process. A non-refundable deposit is indeed placed on the property, when a buyer is sure that the purchase is sound and that is at exchange of contracts. It takes time to get there but everything that happens in the process is legitimate and any dodgy result is suitable reason for people to pull out. Placing a deposit before you even know if the property is sound, is unfair to potential purchasers.
People pull out for different reasons. One buyer may be happy to proceed on certain survey results, another buyer would run at the mention of a small bit of work that they couldn't comprehend the wording of. There are so many ambiguous points in searches etc. that you could easily find a 'legitimate' reason for pulling out.
What if a vendor was let down by their vendor and had to withdraw from their own sale? Who gets blamed then?
A decent HIP with useful information would help to speed up the process. Searches and surveys paid for by the vendor on the sale of a property does make sense in a way. Eridicates any non-genuine vendors to start with and, with co-operation from the associated agencies, makes the process faster and more transaparent for
Estate Agents properly verifyig offers would help infinately and not accepting offers without a mortgage in principle also helps.
The system in Scotland seems just as flawed.
And you must be joking if I would charge, let alone pay £5 to view a house!Everything that is supposed to be in heaven is already here on earth.
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Hi Doozergirl,
Similar systems work in other countries (e.g. France). One of the things that results from laws about non-refundable deposits is that you don't have chains usually. A good thing IMO.
If someone wanted to charge me to view their house then I'd expect lunch thrown in at the very least.0 -
Doozergirl wrote: »The system in Scotland seems just as flawed.
It is.
The Scottish system is nothing like as watertight as the English media would have you believe. It offers slightly better security for buyers, but worse for sellers IMO. Whilst the legal consequences are, in principle, more stringent for any defaulting party and at an earlier stage in the transaction, the lack of a deposit makes the likelihood of any financial reparation more remote.0 -
Quote:
Originally Posted by Doozergirl
The system in Scotland seems just as flawed.It is.
The Scottish system is nothing like as watertight as the English media would have you believe. It offers slightly better security for buyers, but worse for sellers IMO. Whilst the legal consequences are, in principle, more stringent for any defaulting party and at an earlier stage in the transaction, the lack of a deposit makes the likelihood of any financial reparation more remote.
Is it ? lets run through it,
1.' Couple' view a property, they want to proceed and inform the EA
2. EA requests that the 'couple' contact their solicitor, to make a ' note of interest' on the property. Meanwhile the couple will obtain a survey for the property, the EA will still market the property until there is at least one other interested party. The EA will now contact the 'couple's' solicitors and any others, and inform them that a ' closing date ' has now been set for offers.
3. The 'couple' will now instruct their solicitors to make an offer based on the survey report, etc, usually around 20% more than the ' offers over ' price.
4. The 'couple's' bid has been successful , they will now organize a mortgage for their purchase, within days they will meet with their solicitor and go over ' the offer ' and fine tune any extras, conditions etc,
5. The 'couple's' entry date is 3 months away, 6 weeks is common, sometimes 28 days, The solicitor will now carry out all necessary searches, reports as req; solicitors will now be in regular contact with the couple/broker enquiring about any forthcoming mortgage offer.
6. Once the offer is in place the solicitor will issue a ' qualified acceptance '
the 'bargain is conluded'. LEGALLY BINDING.
In fact it's common for a ' qualified acceptance ' to be issued in the first month of the conveyancing after a closing date, not all buyers req; a mortgage, albeit solicitors will not issue a ' qualified acceptance ' on behalf of a buyer if they are struggling to obtain a mortgage they know their client could end up in court, many do, meanwhile the sellers solicitors will be pushing the buyers solicitors to offer up a ' qualified acceptance ' if not forthcoming the solicitor will smell a rat and advice the seller to re-market, this process usually takes weeks, not months.
No Gazumping , No chains, .....................................I reckon sellers have it easier in Scotland.0 -
Jolanta_Nowak wrote: »Have sellers on here found that asking for a reasonable-size, upfront, non-returnable deposit has sorted out the genuine buyers from the hedging-their-bets types?
I have even heard of one seller who charged a fiver for each viewing and found that this neatly disposed of the 'just nosey' gawkers.
Any experience in this area of the game?
As a prospective buyer, I wouldnt view anywhere if they so much as asked me to pay a penny.
If you were to do this in todays market, you would end up waiting an awful long time before you had someone idiot enough to come and view your property.
It is the equivalent of a supermarket charging customers for looking at the chickens before they decide which one to buy.Mortgage debt - [STRIKE]£8,811.47 [/STRIKE] Paid off!0 -
There is a non-refundable deposit. At exchange.
Until exchange neither side knows the the other is in a position to buy it. It works both ways.
Seller: might not be his house to sell for many reasons
Buyer: might not be able to get a mortgage on the property for 101 reasons
Yes it's a pain, but all the time and faffing about is to ensure that the seller has a house to sell and the buyer can buy it. Then at exchange the real deal is done and a deposit is put down.
If I were asked to pay to view, I'd tell you to s0d off.
If you wanted a deposit once I made my initial offer I'd view you great suspicion and not proceed.0 -
To put it another way OP, whats to stop me putting my house on the market with no intention to actually sell, charging people to view and then taking deposits off those gullible enough to put one down. Of course, I would pull out of the sale immediately afterwards and pocket the deposit.
Sounds illegal? Maybe it is. But this is what you are proposing.Mortgage debt - [STRIKE]£8,811.47 [/STRIKE] Paid off!0
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