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Asking for an advance deposit
loulou41
Posts: 2,871 Forumite
I wonder whether anybody has every come across this and does it work? I guess, it still does not stop the seller changing his/her mind. It seems it is the buyer who will lose out on the deposit. Thanks
EXCLUSIVITY AGREEMENT: XXX are one of very few agents who offer purchasers the assurance of an Exclusivity Agreement to secure your proposed purchase. Once your offer is agreed you and the vendor will be invited to sign this agreement and you will be asked to pay a deposit (held as an advance towards the purchase price upon completion) which will be held by the Vendors solicitors. This deposit can be retained by the vendor if you choose not to proceed with the purchase or cannot obtain the required mortgage etc. Please ask to see a copy of our Exclusivity Agreement. We have found this to be a fair and effective way for a purchaser to put the worries of being "gazumped" behind them in a competitive market.
EXCLUSIVITY AGREEMENT: XXX are one of very few agents who offer purchasers the assurance of an Exclusivity Agreement to secure your proposed purchase. Once your offer is agreed you and the vendor will be invited to sign this agreement and you will be asked to pay a deposit (held as an advance towards the purchase price upon completion) which will be held by the Vendors solicitors. This deposit can be retained by the vendor if you choose not to proceed with the purchase or cannot obtain the required mortgage etc. Please ask to see a copy of our Exclusivity Agreement. We have found this to be a fair and effective way for a purchaser to put the worries of being "gazumped" behind them in a competitive market.
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Comments
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These agreements sound like a very good idea but solicitors, when they are asked, do not seem to like any of them. I have also found vendor's solicitors unwilling to hold deposits as they feel it is against the Code of Conduct they work to.
So in my case I have acted in the middle for the seller and buyer to exchange simple letters covering: they will not gazump, gazunder, or if either side pull out the other will pay the costs incurred bu the other party. Probably not legally bidnding, and solicitors would laugh, but is does give both parties some comfort.A retired senior partner, in own agency, with 40 years experience in property sales & new build. In latter part of career specialising in commercial - mostly business sales.0 -
Remember, the EA is employed by and works on behalf of the seller...not the buyer.
The best exclusivity agreement is one where a price is agreed subject to the EA and seller withdrawing the property from display/advertising and refusing to allow any more viewing. It doesn't cost a penny and if it becomes obvious the seller/EA is not complying, withdraw the offer.
If a seller is prepared to be deceitful about such a simple agreement, what else will they deceive you about to get you to pay them 100,000s of pounds."Now to trolling as a concept. .... Personally, I've always found it a little sad that people choose to spend such a large proportion of their lives in this way but they do, and we have to deal with it." - MSE Forum Manager 6th July 20100 -
The best exclusivity agreement is one where a price is agreed subject to the EA and seller withdrawing the property from display/advertising and refusing to allow any more viewing. It doesn't cost a penny and if it becomes obvious the seller/EA is not complying, withdraw the offer.
Good for the buyer but totally the wrong advice for the seller IMHO.A retired senior partner, in own agency, with 40 years experience in property sales & new build. In latter part of career specialising in commercial - mostly business sales.0 -
Why? Any such agreement must be mutual. If the seller doesn't agree to the offer, the seller can say so from the outset and then both parties can negotiate on how best to continue.Good for the buyer but totally the wrong advice for the seller IMHO.
If the seller does agree, the seller will probably get a slightly higher price because otherwise the buyer must assume he is in a contract race with the risks & expense that exposes him to.
Not sure there is any benefit to the buyer by agreeing to pay money over, whilst the seller is still free to do what he wants, as per the OP. What's the sanction if the seller decides not to sell to the initial buyer? Give them there money back. Where's the benefit in that for the buyer?"Now to trolling as a concept. .... Personally, I've always found it a little sad that people choose to spend such a large proportion of their lives in this way but they do, and we have to deal with it." - MSE Forum Manager 6th July 20100 -
I
EXCLUSIVITY AGREEMENT: XXX are one of very few agents who offer purchasers the assurance of an Exclusivity Agreement to secure your proposed purchase. Once your offer is agreed you and the vendor will be invited to sign this agreement and you will be asked to pay a deposit (held as an advance towards the purchase price upon completion) which will be held by the Vendors solicitors. This deposit can be retained by the vendor if you choose not to proceed with the purchase or cannot obtain the required mortgage etc. Please ask to see a copy of our Exclusivity Agreement. We have found this to be a fair and effective way for a purchaser to put the worries of being "gazumped" behind them in a competitive market.
Gazumped????? In this day?... I think it is only good for the vendor - the buyer pays the deposit even before the survey is done, so the usual 'subject to survey' is useless here. If for some reason you won't get mortgage, you would have already lost your deposit and vendor is quids in!!!! Don't forget what is said a few weeks ago : 15 houses for each buyer. Might be even more now!!!!
So, where are my 15?...
Spring into Spring 2015 - 0.7/12lb0 -
EXCLUSIVITY AGREEMENT: XXX are one of very few agents who offer purchasers the assurance of an Exclusivity Agreement to secure your proposed purchase. Once your offer is agreed you and the vendor will be invited to sign this agreement and you will be asked to pay a deposit (held as an advance towards the purchase price upon completion) which will be held by the Vendors solicitors. This deposit can be retained by the vendor if you choose not to proceed with the purchase or cannot obtain the required mortgage etc. Please ask to see a copy of our Exclusivity Agreement. We have found this to be a fair and effective way for a purchaser to put the worries of being "gazumped" behind them in a competitive market.
Shouldn't this read "in a slow market"???
The only thing I can see is the EA trying to get themselves some more money as so many people are pulling out of sales due to either getting cold feet, or can't get a mortgage, hence the EA is losing out on commission!
This "exclusivity agreement" only helps the seller and the EA (who are on the same team!), so a buyer would be mad to sign it!Should've = Should HAVE (not 'of')
Would've = Would HAVE (not 'of')
No, I am not perfect, but yes I do judge people on their use of basic English language. If you didn't know the above, then learn it! (If English is your second language, then you are forgiven!)0 -
Why?
Because I come across it time after time where, because of the TV shows that educate lay folks, offers being made subject to it being taken off the market. Surprising that sometimes the seller feels that is OK as the buyers seem really nice ---- but weeks, or even months, later the buyer pulls out and EA has not been able to tee up another buyer. It happens and I advise sellers not to but they are often taken in by charming buyers.A retired senior partner, in own agency, with 40 years experience in property sales & new build. In latter part of career specialising in commercial - mostly business sales.0 -
But that's part of the agreement. If the seller doesn't want to wait months, perhaps agree to the exclusivity purely for a limited period, say 2 weeks to exchange if really urgent. There's no money changing hands unlike the OP's clause and either side can break the 'gentlemans' agreement.Because I come across it time after time where, because of the TV shows that educate lay folks, offers being made subject to it being taken off the market. Surprising that sometimes the seller feels that is OK as the buyers seem really nice ---- but weeks, or even months, later the buyer pulls out and EA has not been able to tee up another buyer. It happens and I advise sellers not to but they are often taken in by charming buyers.
Or, as you recommend, don't agree to any exclusivity agreement as a seller and be prepared for lower offers in exchange for the contract race the buyer is in, even if the buyer is in a one horse race - and once a buyer realises that, they'll probably drop their gallop down to a slow walk, meaning it could still take months to exchange."Now to trolling as a concept. .... Personally, I've always found it a little sad that people choose to spend such a large proportion of their lives in this way but they do, and we have to deal with it." - MSE Forum Manager 6th July 20100 -
But that's part of the agreement. If the seller doesn't want to wait months, perhaps agree to the exclusivity purely for a limited period, say 2 weeks to exchange if really urgent. There's no money changing hands unlike the OP's clause and either side can break the 'gentlemans' agreement.
Or, as you recommend, don't agree to any exclusivity agreement as a seller and be prepared for lower offers in exchange for the contract race the buyer is in, even if the buyer is in a one horse race - and once a buyer realises that, they'll probably drop their gallop down to a slow walk, meaning it could still take months to exchange.
Interesting thinking but on what expereince do you base your thoughts?A retired senior partner, in own agency, with 40 years experience in property sales & new build. In latter part of career specialising in commercial - mostly business sales.0
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