"Goodwill" Deposit and contract when buying a property?

haziec

Please can I have some opinion/advice?
Our daughter and fiancee saw a maisonette locally, 2 bed, ex council, nice area nearly all owned, just what they want.
They were going to wait until later in the year after their wedding, but really liked it and saw potential. Mind you they only viewed it once.

The EA showed it as its empty, he said the owner, lives abroad, had rented it and had to repossess it. He said it needed minor redecoration in his details but it needs new windows, bathroom and kitchen and he also got the garden details wrong, it was only the front included.

They made an low offer same day which was rejected, after they made an offer which the EA said the vendor was looking for. The EA came back and said would they pay a £5000 goodwill deposit which would be returnable if they dropped out for any reason OTHER than just change of mind. He said this was because a couple had gone along for 6 weeks and then dropped out.
They agreed as they wanted the property.

The vendor then took a week to accept it with the EA saying he was having "discussions" with his wife about it, he kept extending the deadline and only accepted their offer when we gave them a deadline. Funny though the property showed "under offer" before that.

They went to pay it and he gave them a contract to sign which tied them into the purchase with only a couple of reasons to drop out or lose the 5k. They were -problems with the searches, mortgage refused because of something wrong with the property, a survey showing a deleterious material defect (??whats that??) NOTHING LIKE HE HAD SAID when asking them to pay that.

My husband and I advised them not to sign and no one we know has had to do this. They tried to get them to sign and pay the money and said they would lose the property which they have cause the vendor won't go ahead without this. But, what happens if the survey shows other expensive faults? they would have to go through with it or lose £5000.

Most people we talk to say they have never heard of this. Is it a scam? They offered to pay £500 subject to contract goodwill.

Would be interested to know if any MSErs have signed this sort of contract?

Also would you recommend them putting a note through some doors of similar properties (there are only about 30-40 at the most) to see if they get anyone wanting to sell. Or any other ideas?

We feel so disappointed for them but feel they were being conned or maybe the other couple didnt go through cause their survey showed something seriously wrong and the vendor is trying to tie someone into buying it.

Appreciate anyones help or opinion.
thanks
Haze;)

Doozergirl

Who is the estate agent?

I have come across a small agent that asks for a nominal but ultimately refundable deposit, just to show willing.

I don't think the contract they were asked to sign could possibly stand for anything in this country - the law is quite clear on house purchases work - you can pull out at any time uop until exchange.

haziec

Doozergirl wrote: »

Who is the estate agent?

I have come across a small agent that asks for a nominal but ultimately refundable deposit, just to show willing.

I don't think the contract they were asked to sign could possibly stand for anything in this country - the law is quite clear on house purchases work - you can pull out at any time uop until exchange.

I agree Doozergirl, thats why they ultimately offered £500 to the vendor instead, which was rejected
It was drawn up by the agent who is a small local independent one, dont know much about it. I was a proper legal one which they would have witnessed, so Im glad they brought it home without signing. The vendor is not living in this country though.

You could pull out at any time BUT lose the £5000 which the vendor would get unless it was for one of the reasons I stated, so too much to lose

I think its strange that the vendor did not want to proceed with a FTB with a deposit who would complete quickly.

Doozergirl

They haven't signed it but I think that even if you took it to court, that a judge would see that they had attempted to flout property law to their own advantage.

I'd check that the agent is affiliated to the NAEA or the OEA. Check future agetns as well. I bet these ones are not. We have had had one or two instances on the board where people have clearly been taken advantage of.

clutton_2

dont let them sign it .... BAD terms and conditions of contract - listen to DOzer - she knows the score !!!

haziec

Thanks again Doozergirl, they are not affiliated to either of those organisations, I just wonder what the motive is behind this contract and large deposit? People have said that they only need to get a couple of people to pay this, then pull out after a dodgy survey, then rent again for six months, then do it again, if thats possible?
I think they may have saved themselves a lot of hassle and money. I hope theres some way of getting a similar one though.

haziec

Thanks Clutton, even though its disappointing, its good to know that we gave them the right advice.

Sooler

HAZIEC wrote: »

He said this was because a couple had gone along for 6 weeks and then dropped out.

and what was the reason for that?

don't pay a penny in advance - rediculous. Perhaps any potential buyer ought to request £10000 from the vendor on similar terms.:rotfl:

Just walk away - easy - no problems

mdj1

Tell the EA to go and jump! Infact, tell them YOU want a £5k deposit to go ahead with the sale! He won't take it of course.

If he's not affiliated then i wouldn't touch him with a bargepole.

What's to say he's seen the market is crap, has had enough and will do a bunk with your money and that of a half a dozen others. The vendor is abroad so you can't even contact them to check if this is their or the ea's rules. I BET it's the ea's

STEAR CLEAR! and think yourselves lucky when you read in the local press in a few months about the EA that did a runner with loads of cash!

david29dpo

There is nothing in property law to stop the agent, vendor or the buyer adding conditions like this if they so wish. Other outlets do it all the time.
It has been done but its always the buyers solicitor who has held the deposit, never the agent or the vendor, AND the seller signs a similar contract if they put out.
The problem is finding a solicitor who is willing to do this, for a fee of course.
As long as both parties and the solicitors agree to the terms of the contract, it properly not a bad idea, now many of us have lost money with aborted sales?

Richard_Webster

Whenever we get this kind of situation arising I try to advise people against getting involved. If I am acting for a seller I tell him that if he wants to get on with the transaction then just get on with it. Otherwise we will waste time negotiating the terms under which the money will be returnable with the other solicitor, rather than dealing with the legal work on the sale itself.

You can simply pay a sum to the seller's solicitor which he agrees to hold and return on demand. All this does is show that the buyer has that amount of money and doesn't mind it not being in his bank account for a bit.