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Upfront deposit - the only way to test a buyer's bona fides?
Comments
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Jolanta_Nowak wrote: »Have sellers on here found that asking for a reasonable-size, upfront, non-returnable deposit has sorted out the genuine buyers from the hedging-their-bets types?
I have even heard of one seller who charged a fiver for each viewing and found that this neatly disposed of the 'just nosey' gawkers.
Any experience in this area of the game?
Nice post which illustrates one thing..Sentiment definitely changed, crash is on.0 -
Anyone know how a pre-exchange, non-refundable deposit might work legally?
Surely its no more enforceable than a verbal contract to buy? E.g. an offer. Which isn't recognised as a contract to buy property in English law.0 -
This is the problem, no system could claim to be perfect but the seller would have the right to challenge the claim via the intermedery.
As I said, this scheme would have to be linked in with a detailed up front survey that the HIPs tries to be.
So if my condition report said "no" for dry rot, because I had commissioned it, then you, the buyer said that you could not buy because the property has, or may have dry rot, I would then be best advised to refer the case to the intermediery who would arbitrate on the basis of a professional opinion. If the house was found to have dry rot then you could either walk and not forfeit your £1k, or try to negotiate a discount on the price with me to take into account the work that needed doing.
If the third party inspection backed up my condition report then you would be warned that pulling out means an automatic forfeit of your £1k.
If you then bought the place and found that it did have significant dry rot after all you would then be able to claim off the individual who did my condition report.
The problem is that every survey has "something".
Are you saying that the seller has the right to challenge the "something" in the survey which I blame as the cause of me pulling out? And that I am "bound" by the seller's decision?
I might just have changed my mind about moving altogether - especially, having seen what's on offer and weighed it up against where I currently live.
You make it sound as I though every seller deserves to sell every property on the market. And the point is that they do - but only if they find a like-minded buyer.
I've no doubt that some buyers "hedge their bets" by putting in offers on properties they never intend to complete on. But some buyers simply "see the light" after they've made an offer - an offer they very genuinely meant, when they made it.
Are we not allowed to be human any more? Is everything all about "contractual rights"?Warning ..... I'm a peri-menopausal axe-wielding maniac0 -
The other thing about an up front deposit is: not many people have the money.
Their equity is tied up in their existing house; they're raising a larger mortgage to pay for their next house.
Many people are literally living month to month and will use the released equity to settle their solicitor bills etc. A mortgage arrangement fee might be costing them £400-£4000. A survey will be £400-£1000. They're usually over-stretched already.0 -
You may lose some potential buyers, but you gain more credible buyers in the other end. You guys seem to be missing the point with upfront deposits. The whole reason you ask for an upfront deposit is to reduce the number of potential buyers you are talking to so you get the creame-de-la-creme. The best buyers.
Ask a direct marketer why he only markets his luxury men cologne to men with a couple of millions in their bank account and not to the poor man on the street. It's the same thing. The same thing applies with the house sale issue. You want people who can commit. And the most obvious commitment is a percentage deposit on the selling price/asking price.
I ask for upfront deposits on all my deals and I have sold very much also as a result of this. The thing I do is giving the buyer a chance of getting his deposit back in the end of the 15-30 day due diligence I give them. If I withdraw from the deal and won't deal with the buyer then the buyer can have his deposit back, but only if I, the seller, withdraws from the deal before the due diligence time is over. If the buyer withdraws I keep the deposit. Fair and simple.
You guys, if you aren't even able to commit say 1% of the asking price then why should I, the seller, be willing to discuss anything with you? I mean you need to be pretty desperate in order to talk to everybody who comes along...hehe. And I mean it. So if a man from the street comes along and want to look at your house then you guys would spend 1-2 hours showing him your house for sale because he might be millionaire in disguise? Seems like a nut-case scenario. But, hey, you gotta do what you gotta do right? It's your time, not mine.
As I see your view of this: It's ok that the poor seller commits to every non-respecting potential buyer and loses the thing that is worth a heck of a lot more than cash, his time, but when the seller asks to see som ID (some commitment from the potential buyer) then suddenly that is a crime more or less? Well, maybe you should rent a place instead. That way you don't have to deal with horrible sellers and everybody is happy. Wasn't that a great solution:)? Merry Christmas everybody.0
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