Safety of pre-contract deposit

Natds1

We are first time buyers and had an offer £15k under asking price accepted on a house we really like (the house needs some new windows, new bathroom etc). The vendor however wants us to pay a £2000 deposit upfront which will only be refundable if:
1.) a single item on building survey exceeds £10K in repair. Or 2.) a single item on structural survey exceeds £15K in repair.
We also need to show good progress with conveyancing and effort to complete in 6 weeks
Does this sound reasonable in the housing market today or does it sound suspicious and like we are being naive to accept this?
Thank you.

G_M

Do not pay the seller anything till Exchange of Contracts. Then pay 10% (or a lesser amount if agreed).

Get a survey done asap, assuming you want one, and mortgage valuation if you are borrowing.

Inform the seller of your conveyancer's details asap, and instruct your surveyor to start searches and enquiries.

If the seller insists on this unjustifiable £2000 payent, either find another property, or just delay paying it........ till you are ready to Exchange!

Surrey_EA

Pre-contract deposits are terrifically rare, and are not something I would be entering in to if I were you.

6 weeks is also remarkably quick to complete.

davidmcn

No, it's an absurd suggestion - nobody does this.

Natds1

Edited to say that if we complete in 6 weeks then the £2000 will be refunded....

G_M

Natds1 wrote: »

Edited to say that if we complete in 6 weeks then the £2000 will be refunded....

Does not alter the advice given.

Tom99

[FONT=Verdana, sans-serif]As said don't do it. You will waste 2 weeks just negotiating the terms of this non refundable deposit and how to document it.[/FONT]

dunroving

Are the sellers American by any chance? Sounds very much like the concept of earnest money, which is handed over around the same time as the offer is accepted.

MobileSaver

Natds1 wrote: »

The vendor however wants us to pay a £2000 deposit upfront which will only be refundable if:
1.) a single item on building survey exceeds £10K in repair.

So if three items will each cost £9995 to repair then you lose £2000 ....

If the roof needs replacing (not repairing) at a cost of £20k then you lose £2000.

If the garden turns out not to belong to the vendor and you pull out then you lose £2000.

If the vendor is in negative equity and the bank refuses to allow them to sell then you lose £2000.

If the "vendor" turns out not to be the vendor then you lose £2000.

As others have intimated, the vendor is living in dream land, no-one in their right mind would agree to pay such a deposit.

I would speak to the Estate Agent to see if they will educate their client; the EA will know that no-one would agree to such terms but ironically if the vendor has agreed to pay commission for a "ready, willing and able purchaser" it could be the vendor losing £2000 if they refuse your offer solely based on your refusal to pay the ludicrous deposit.

hazyjo

Run for the hills. Not the usual way of doing things. The amount of posts I see on here where people are upset at having to pull out and lose what they've paid for survey, mortgage, solicitors, etc... add two grand to that! No thanks, don't let them hold you over a barrel re buying their house. You are perfectly entitled to pull out at any time before exchange. It's the English way of doing things and, as upsetting as it can be to lose a buyer, it's life. They need to get over it.


Am guessing they have had their fingers burnt with previous buyers - but maybe they've all pulled out for a reason! Don't be the one who's bullied into buying it despite any issues.

jonnygee2

100% no.

Given it's a buyers market, if anything they should probably be paying you a deposit that you get to keep if they change their minds. Why not suggest that to them as a response? :rotfl: