Dodgy Sounding - vendor wants 10%

Giuberry

Hi Everyone,

I'm a first time buyer and think am being taken for a ride by a dodgy vendor / agent.

Found a house we love but vendor wants a cash buyer (we have 90% mortgage) and has "accepted" our offer but refused to take the house off the market. Futhermore he's asking agents to continue actively marketing the house until the point at which we exchange contracts.

His offer to us is if we give him 10% non refundable deposit he'll take the house off the market. I think we should run in the opposite direction but wondered if anyone else had ever heard of this sort of thing? Is it even legal?

We are London based so things are mad at the moment house buying wise and feel like people are starting to lose their heads a bit.

Inputs gratefully received,
Giulia

AnnieO1234

DO NOT PAY ANY DEPOSIT EXCEPT ON EXCHANGE OF CONTRACTS VIA YOUR RESPECTIVE SOLICITORS!!!

Personally, I would walk away because the vendor is basically saying "I accept your offer, spend a load of money on searches etc for my house, but if someone puts a better offer in before exchange then you can whistle dixie".

tigsly

I wouldnt pay a non-refundable deposit for a house 10% could be masses of money!

How much do you like the house.. the fact they are asking for cash makes me ponder if its a - over valued - and b - has no regs - or some other reason - a mortgage might be refused?

Angelicdevil

As per previous posters!!!!

Anything could happen after paying the non-refundable deposit. The sale may not go through for many reasons eg you might get cold feet/bad survey results/seller could be a scammer/you might not get a mortgage etc

And then what happens to that non-refundable deposit??? It's gone!

No matter how crazy the market may appear, do not hand over any cash.

If you lose this place, don't worry about it. There will be others!

dominoman

Wait a minute. This isn't necessarily a scam or even that unreasonable.

The buyer is worried and wants to make sure it doesn't fall through. In their eyes someone with a 90% mortgage is a risk.

I have done this before and paid a "non-refundable deposit" to show my good intention, and as a result I was accepted as a buyer versus the other bidder.

If you do do it, first make sure you say the deposit is "subject to survey", which gives you a get out clause. In effect if you change your mind you could probably use anything in the survey to withdraw.

Secondly (and you don't need to bring this to their attention until you do it) you must lodge the desposit with your solicitor and not theirs. Very important. You should then ask your solicitor to confirm to the others that they are holding a 10% non-refundable deposit from you, subject to survey. Make sure your solicitor knows not to pay it without your explicit consent.

I've done this and it is effective for both sides - so no need to run a mile.

As to the question of the property staying on the market, ask that as a condition of putting down a deposit it is taken off. If they won't do that then I would probably walk away.

dominoman

This is the kind of thing that is happening in London now. It would put many people off but if you like the house don't let it phase you.

p00hsticks

Giuberry wrote: »

vendor wants a cash buyer (we have 90% mortgage)

Confused by this - if the vendor definitely wants a cash buyer, then why are they even considering you when you need a mortgage?

I'm with the others - don't give a deposit prior to exchange of contracts

ConfusedofYorkshire

I wouldn't do it.
I suppose if it was subject to survey, and also only non refundable if YOU pull out. But if they can pull out and keep your deposit that's a massive no!

Gwhiz

Most good solicitors will either tell you not to do this or will explain that a 'non refundable' deposit is actually not that simple to do.

G_M

Don't go near this.

There's a good chance the property is unmortageable for some reason - hence cash buyer wanted.

And it will cost you 10% just to find out what is so seriously wrong with the property......

bargainbetty

Non-refundable deposit? In a pigs eye! It's a lot more difficult than you think, and what happens if they decide they want a higher price? Can you walk away and keep your money? If you have an agreed mortgage offer in place for the other 90% and can prove the deposit is there, then they have no reason to demand anything.

If the vendor is that desperate to get a cash buyer then there might be something unmortgageable about it that would show up on a survey, or they might just be in a rush. However, they are being disrespectful to you as the buyer to give you half an agreement and try to hold you to ransom. I'd be very tempted to tell them to take it off the market or pull your offer completely, before you incur costs.