Buying a flat:Holding deposits

Chris87

I am in the process of buying a flat in South West London. I have offered asking price, which has been accepted and to take the property off the market I have been told that a £1000 holding deposit is necessary.

I don’t have a problem with this at all, however the agent has told me the deposit is non-refundable and has given me the account details to pay it straight into the vendor’s account.
I was dubious and have run this past my solicitor who has advised strongly not to give any money straight to the vendor (however I should say the vendor is a company, not an individual – however in my opinion this doesn’t make a difference).

I spoke to the agent and he said that he has recently sold 14 properties in the same way, with the buyers paying their non-refundable holding deposit directly to this company who is selling the properties.

Is this normal?

I really want this flat and it is advertised with 2 agencies, so I am worried about losing it, however I am also very concerned about transferring any money to the vendor, even if the vendor is a company, especially as it is ‘non-refundable.’ NB, I have not been given any T’s & C’s regarding what ‘non-refundable’ means, ie not sure I would even get it back if the property didn’t get through the survey?

Any help much appreciated!!!

G_M

Not normal and I would not agree.

The purchase could fall through fo any number of reasons, some your fault (you change your mind) some the seller's (HE changes his mind) some 3rd party (legalproblems, searches etc).

There are other properties out there, and other agents.

dimbo61

What happens if this " company and the EA " are working together and collect 25/30 holding deposits from deseprate Buyers ?
Sorry the seller has changed his/her mind and now does not wish to sell !
Nice way to earn £25/30K

Johnhowell

Engage a solicitor. Any deposits for buying should go through your solicitor.

Remember the Estate Agent does NOT work for you, they work for the vendor.

cattie

Don't do it! You have made an asking price offer and the vendor should be falling over you in an effort to hold onto you. Not be trying to frighten you off or screw you out of a hard earned £1k. Asking price offers are like gold dust in this day and age.

As GM say's, there are other properties out there and other agents. Go find yourself a property where a vendor doesn't want to make such a ludicrous demand.

Do you think this vendor would be willing to pay £1k into your bank account should your solicitor ask, as a gesture of their seriousness and commitment in selling the flat to you, and non refundable if sale doesn't complete? I don't think so!

Chris87

Thanks for the advice everyone. I have spoken to the agent again this morning and they have stated that they have recently sold 14 flats in the same way, apparently this is 'standard procedure.'

They have said that it can be paid to the vendor's solicitor if we want to, but they were unable to provide any written terms and conditions about the non-refundable deposit, ie they were unable to say what would happen to our money should the vendor go bankrupt -they just keep saying it is non-refundable.

This is from a large London based agency.

DannyboyMidlands

Do not pay it. It is not standard procedure at all.

Tell the agent you will find another flat.

bitsandpieces

What happens if the survey finds the flat is likely to fall down within a year, you're told that there are £50k of service charges due and searches show that there will be a train line through the back garden by winter - the deposit would still be non-refundable?

Holding deposits are common with new-build places (though t&c varied, and this has always struck me as a rough deal for buyers). Haven't heard of this with 'second hand' flats before, though.