Dodgy Seller (Property Developer)

Payam

I have made an offer on a converted flat. The agency rung and said the property developer accepts but he wants £5k cash deposit! I have never heard of that before. Anyone? He could aslo gezamp me and I dont ask him for anything? I am not sure what to do now?
Thanks for any advise.
Nadine

bkclive

Never had to do it myself, but I have heard of it. I would suggest it depends on your situation as to how you play it. Are there loads of properties around that you can go for? Do you need to move asap? If you do need this flat, would the seller take a deposit after you've had a survey done? Presumably you will have a solicitor, so it should be possible to make this a refundable deposit if the purchase does not go ahead. Of course, whether you could get the cash back is another matter. It's hard to be more specific, but I would say in any case see what your solicitor advises; after all, that's what they are there for! Hope this helps, and good luck.

SquatNow

The property developer is short of cash... probably close to going bust.

People trying to sell things don't normally make stupid requirements that buyers must meet because buyers would go elsewhere.

Don't buy now - prices are crashing anyway.

Definately don't buy a new-build flat, they tend to drop 40% when you walk through the door.

You'll probably find no bank will lend you the money for a new build flat in the current market unless you have a big deposit. The developer knows this. The 5k is because he knows you'll have to pull out unable to find funding.

In which case he gets to keep the 5k.

Microstar_2

Do not pay any deposit.

I do not know where you are in the country, but in many areas the market is very weak, especially on newly developed properties. Proceed with great caution. Unless you really need to buy a property now then it may be worth waiting at least 6 months to see how things develop. It is extremely unlikely prices will be any higher!

Generali

Payam wrote: »

I have made an offer on a converted flat. The agency rung and said the property developer accepts but he wants £5k cash deposit! I have never heard of that before. Anyone? He could aslo gezamp me and I dont ask him for anything? I am not sure what to do now?
Thanks for any advise.
Nadine

You could get the solicitors to hold a £5k deposit prior to exchange to prevent you from pulling out subject to a satifactory contract being drawn up (eg under what circumstances you could pull out and retain the deposit like bad survey, failure to get a mortgage). I would never hand over the cash to the seller prior to completion though.

Rover

Presuming you know your local market and really want this flat, I would suggest you take Generali's advice and do this via the solicitors.

Handing over cash to the seller to reserve is not appropriate in this case and could result in the 'loss' of it.