Browse Forums Home Finance Re: Sale of contract - Do you always have to pay 10% deposit 5Sep 06, 2010 5:26 pm fitnhealthy Hello All I am venturing into the unknown territory of selling and buying... I am going to look at a place tonight, but just wondering what happens if I like it and decide I want to get a building inspection. Do I make an offer at the price they have it for sale or can I offer a little lower? Unless you think the property is amazing value and will be snapped up quickly, don't offer asking price (sometimes agents get the price wrong and it may be marketed too cheap). fitnhealthy Once I decide I want to purchase do I have to pay a deposit at the time of sale of contract? How much do you normally have to pay? All my money is in my house at the moment so not sure how I can get a deposit together if it is too big. No. You pay a holding deposit of .25%. This holds for cooling off period (usually 5 days but I always ask for 10). Then you pay (usually) 10% but you can negotiate for 5% (sometimes- depends on the vendor). fitnhealthy Also on the sale contract, can I put subject to the sale of my house as well as subject to building/termite inspection, and subject to finance? I appreciate your help as this is really confusing this selling and buying business. My biggest worry is making sure I sell for enough to cover all the expenses as well as enough to buy the house I decide on. Thanks Kristy You can put subject to sale but I wouldn't sell my house to you with that clause. Most people want someone who CAN buy it (as opposed to someone who wants to). Good Luck. Re: Sale of contract - Do you always have to pay 10% deposit 6Sep 19, 2010 8:59 pm I know in NSW it is getting harder to get away with paying a 5% deposit. Apparently there has been some cases in court regarding defaulting on a purchase, the purchasers have paid a 5% deposit and then have had a hard time getting the next 5% out of the defaulter. Because of this, a lot of convenancers and solicitors instruct their vendors to be strict with the 10% deposit only now . Deposit bonds are great.....banks, conveyancers, solicitors and private firms are all getting on the band wagon these days. For a small fee you get to keep your money where it should be.....in your account and not someone elses . Also, as for pest and building inspection, a lot of banks will not loan you the money until these are carried out now too. So its generally a given you have these put in the contract along with the finance clause. Re: Sale of contract - Do you always have to pay 10% deposit 7Sep 21, 2010 6:34 pm Hello FitnHealthy, The information given to you has been quite good on this topic. The best way to check what kind of deposit is needed is by asking the agent. Mandatory amounts vary from state to state. I am in Qld personally and I think some of the information given to you was from someone in NSW. So check with the agent they will know the SA details more. Further to this, it is usually guidelines set out and most things are negotiable. So in some instances you may be able to get away with as low $500 holding deposit with a further 'larger' deposit once finance is approved etc. Regarding deposit bonds. This shouldn't be too much of an issue. The companies that offer these primarily look at your ability to provide the cash to cover that amount at settlement. For example: 10% deposit bond.. needs to be covered 'at settlement' by cash surplus from the sale of your property. This being the sale of your property minus fees/costs, current mortgage, commissions etc. If their is cash funds available to still cover the deposit amount then it is usually ok. Another way you could arrange the deposit is by 'adding' to your current home loan provided you have enough equity in your current property to do this. Their are some ways of increasing your current lending to do this that won't incur you extra cost's when you do sell your own property. With this strategy you will still need to have a clause on the purchase contract subject to the sale of your property however. A third way of obtaining this property is to obtain bridging finance. Now, Bridging Finance tends to scare a few people off. Essentially, it is where you lend against your current property as well as the new property at the same time. So you in essence own both properties at once. The finance is broken down into a couple of loans. The Bridging loan, and the End loan. The Bridging loan is a portion enough to cover your current debt, Fees and charges, and at times the 'expected' interest for an estimated period (say for 6 months). The estimate of interest that is added to the top of the loan covers the repayments for this. The second portion, being the End Loan is essentially what you will be left with once you sell you current house. Repayments are made on this as per standard. The idea with Bridging is that you have the money to buy the home of your dreams NOW, and you have a period of 3-12 months to sell your current home. With the Bridging finance option the WHOLE purchase price amount is usually taken into consideration (provided you have the equity across the 2 properties). So, once again you may be able to get away with a smaller initial holding deposit with the larger amount from finance. Or you could use a deposit bond with this scenario also. With Bridging, you will not need a subject to the sale of your current property clause. So this may be prefered. I hope this information helps out. If you have any questions that involve more specific private information feel free to private message me to discuss further. Regards, Trent Davidson Property Finance Consultant Residential Lending LJ Hooker Finance Brisbane North Credit Representative Number: 387283 under Australian Credit Licence:380270 Re: Sale of contract - Do you always have to pay 10% deposit 8Sep 21, 2010 8:08 pm Thank you everyone for taking the time to respond to my question. It helps to be well informed especially when one place I went to look at 2 days after it went on market sold at the open inspection to a cash buyer, so no chance for me there... I am hoping I can negotiate a smaller deposit around $500-1000 when I find a place I can afford and in the right location. Thank you again and I hope this might help someone else You talk about deletions, are they variations or PS and PC adjustments? pleas list them 1 17442 Hi All, I just wanted to close this topic out with an update. 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