House purchase non refundable deposit?

Minderz

I have had an offer accepted on a house and have sold mine subject to contract. I thought everything was going along untill the estate agent contacted me to saythe vendor wants a £5000 deposit before he'll instruct solicitors.Anyone any experience of this???? I'm a novice - first time selling and buying!!

PasturesNew

Sounds weird to me..... it'd put me off buying it unless I was uber-desperate..... it's not normal, it's not usual, it's weird.

Make a voodoo doll ....

da_rule

Run, run as fast as you can. I cannot believe that your solicitor would be happy for you to transfer any money to someone who is unrepresented.

Principia_2

Depends where you are and how hot the market is.

When I was actively looking there were a few houses which were interesting but were called reverse auctions - the buyer put down a non returnable deposit and guaranteed to exchange within 28 days of the offer being accepted.

It seemed to me that there was an imbalance of risk being taken by the buyer and seller in these instances so we didn't bother even viewing them.

If you are keen on the house then why not ask the seller to put an equal amount of deposit in, just in case he pulls out?

googler

Think about it. You transfer money to the seller, who doesn't yet have a solicitor representing him, so where does the money go? Not into a nominated client account, into the seller's own coffers.

How do you get the money back if the sale doesn't go through?

etc., etc.

da_rule

If things went pear shaped then you would struggle to get the money back. You would have to sue him (potentially costly) and the fact that you've agreed to it being non-refundable would also create a stumbling block. Tell him you'll happy give him a deposit, on exchange of contracts providing he is represented by a solicitor. Unless you can afford to lose £5000.

MobileSaver

Minderz wrote: »

have sold mine subject to contract .... I'm a novice - first time selling and buying!!

If you're selling your current home then obviously can't be your first time buying...

What happens to your non-refundable deposit if the vendor is in negative equity and his mortgage company scupper the sale? What happens if the day before Exchange the vendor says house prices have risen and he wants £10k more? What happens if your survey/valuation says the house is worth £30k less than you've agreed? Etc.

googler wrote: »

How do you get the money back if the sale doesn't go through?

Well it's non-refundable so the OP will not get the money back under any circumstances if the sale doesn't go through... We can all see this but I don't think the OP has quite grasped how mad they would be to agree to this deposit!

chanz4

what if the ea go bust

phill99

Don't do it. It sounds more fishy than Billingsgate on an August Afternoon.

cattie

Agree to do it only on the understanding that the vendor pay you via your solicitor a non refundable deposit of £6000 should the vendor fail to complete the sale of the property to you for any reason.

Otherwise take your business elsewhere. There are plenty of vendors who wouldn't think of taking such an attitude or making such a ridiculous demand on a buyer.

G_M

Only agree to this if the seller puts in a similar amount - both sums to be held by solicitors.

And you'l need clear, written agreements outlining in what circumstances the money can/can't be refunded.

* your survey finds the house is falling down, so you pull out. You get your cash back? Or not?
* seller gets a higher offer from someone else at last minute. You keep his cash? Or hav to give it back?

This is why in England, no deposits are usually paid, or legal comitments made, till Exchange of Contracts.

It's a legal minefield.