Why $1,000 deposit is not enough
Just recently, as happens from time to time, a buyer asked me why he had to pay a large deposit. “My finance broker said I only need to put down $1,000”
Legally this may be the case, deposits are negotiable in Queensland, but in reality a seller taking their property off the market is going to feel ‘at risk’ if the buyer offers just a small deposit. A seller will consider your offer much more favourably if the deposit reaches 5 – 10% of the purchase price.
Remember, unless a condition is inserted into the contract a seller is bound to the buyer from the date of the contract. This means that he will have his property off the market until the buyer settles and the buyer is offering to risk a measly $1,000 for this commitment? It’s likely the seller will ask for a return on that risk and that may mean the buyer will pay a higher price! After-all, a substantial deposit is a show of faith and this faith is likely to be returned during negotiations putting the buyer in a better position despite paying a higher deposit.
A deposit larger than 10% cannot be paid as this constitutes an instalment contract and not desirable for a seller in a residential transaction.
Not all buyers have cash lying around but it’s important a substantial sum be put down… after-all you are buying property! It’s likely the home you are buying is the biggest asset of the seller and time on market is crucial to them. Give them confidence you can satisfy the finance approval clause by offering a significant deposit with your offer.
I’m not sure why some agents allow their sellers to settle for a small deposit. It seems like an example of poor negotiating to me! We are paid to secure our clients not only the best price but also on the best terms and conditions and this includes deposit.
At MBPS we pride ourselves on a customer service, negotiating skills and our results.
Experience the MBPS difference.
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Posted By Annette Sinclair on Friday 31st July 2015 @ 15:40:48
Updated : Friday 31st July 2015 @ 15:47:19 | Words : 343 | Views : 2156 | Comments : 0
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