Non-refundable deposit before contract

Elizabeth_739

We are attempting to purchase a house but the owner, who is leaving the country, is demanding a £5,000 non-refundable deposit before his solicitors will release the contract. It makes me suspicious, why would he not want our solicitors to view the contract first? Does anyone have a view on this or a similar experience?

sooz

Sounds like a scam. Do they want you to wire the money to Nigeria by any chance?

Walk away now...or try to find the real owners of the house :rolleyes:

Melissa177

He wants a 5K deposit AND he's leaving the country?

diddlydum

That is very dubious, as without a legal contract you have no rights.

Money down the drain, avoid avoid avoid.

Elizabeth_739

The vendor is going to work in Canada and has a bona fide local solicitor. He insists that he needs to know we are serious purchasers before he leaves the country and that everything is in place all ready to go with his solicitors. He has also stipulated that if we have not exchanged by 31st August the price will increase but we know this is ridiculous as no solicitor will change a contract half way through. Our house is sold and we really want this to go through otherwise need to rent within about 3 weeks time.

nelly_2

If he hadnt been nobbing about like this it would be half way to being sold by now.

kingkano

Have you had the survey back?? I couldnt possibly agree to a non-refundable deposit (especially 5k is quite large) if there is a chance the survey has something on it.....

While it's quite possible they have just had a rough time trying to sell (as we have at the moment) it's equally possible they know something you don't and are 'buttering both sides of their bread' so to speak.

Walk away now with your money intact while you still can. OR you can try renegotiating that its a deposit subject to survey etc. This should still show your seriousness....

Elizabeth_739

Unfortunately, our own solicitor is on holiday and we have a locum dealing with the matter. She seems to think that unless there is a problem with the Title Deeds it would all be OK, so she suggests that a clause to this effect is included. I, however, see no reason why my solicitor can't view a copy of the contract (photocopy or fax) even though the vendor may have already signed it.

Nicki

No this isn't fishy. We are in the same position as sellers at the moment, having been let down and lied to by a number of buyers.

The idea is to get an assurance you are committed to buy the house. The money is paid either to the sellers solicitor or to the estate agent and held in trust. It isn't released to the seller until completion, along with the remainder of the purchase monies (and is clearly deducted from the balance you have to pay). You only lose the money if you withdraw from the sale. The seller has to refund it if he withdraws. Usually you put some conditions on such as the money is refunded if the seller can't show title, the survey has significant issues or the deal isn't done within a set time frame.

The reason its being done is because of the increasing number of people sticking in offers as "cash buyers" who then turn out 3 months down the line to be both dependent on mortgage and in a chain and therefore unable to proceed with the result that chains collapsed. Obviously as a seller you can only do it if your property is a desirable one and you have had more than one offer.

Wouldn't be necessary if everyone was honest when they put in their offer, but sadly they are not.

Guy_Montag

So he's leaving the country & wants a fast sale, but is "nobbing you about", as Nelly so eloquently put it. I'd tell him to sling his hook & start looking for another place.

rjm2k1

The deposit should be paid on exchange of contract, not before. If the contract is ready, there's no reason not to exchange and pay the deposit at the same time, assuming everything else is sorted (mortgages, surveys etc etc).