house sale

Had a discussion at work regarding what happens with the deposit on a house when it is sold. Someone said that once the sale was unconditional that the seller of the house could have access to the deposit. Another person said that it was left in the agent's account until settlement date.

My query is:

Can the agent take their commission from this deposit before settlement date?
If the deposit is kept in an account by the agent, does the seller get the total amount, plus interest, on settlement date?
Is the seller able to get the deposit once the sale becomes unconditional?

Cheers

This is an interesting question - my parents recently sold their place and when asked about a deposit were told by the agent that it was not standard practice any more to ask for one! Not sure how true that is generally, but I would still want one if selling my place.

I seem to remember on here some time ago someone got stung with this when the purchaser didn't go ahead and no deposit had been paid...was that ronnie?

Hope someone is along soon who can answer your questions rob

yes, the agent takes their fees and the balance can be paid to the sellers.

Check with your Lawyer re this, in case there is a clause in the sales agreement which would be unusual, rather than the R/e who has a vested interest in keeping the funds in their Trust account.

the purchaser pays the deposit on going unconditional, this is held by the real eastate agent in a trust account till settlement when he forwards it to your solicitor less his commission. The buyers solicitor forwards payment for the property and any portion of rates etc which you have prepaid. The solicitor will pay out to you the proceeds of the house after he has settled any mortgages and taken his own fees out first. So what you end up with should be yours with nobody left for you to pay.

The convention is the deposit goes to the real estate agent and on settlement they take their commission from it but its happening more and more that sellers are stipulating that the deposit goes to their lawyers and then the estate agent gets paid on settlement as another of the dispersements by the lawyer. Not what the agents like but the seller can enforce it if they want.

If you are chatting with mates then I am sure it's okay to keep chatting here. However, if it's *your* house sale- check with your solicitor. It's worth a quick phone call, and I know that my solicitor would not charge if I called and asked.

AFAIK, agents like the idea of a deposit, as they look after it in their trust account. It means that when the sale goes through they know they've got their fee. Who cares if there is a problem with the rest of the funds...?

The deposit is held by the RE agency for a minimum of 10 working days I think it is - after that if the contract is unconditional the commission is paid and the balance is forwarded to the purchasers solicitor. How soon that is done will vary from agency to agency - some like to keep things right up to date some will leave it until requested by the solicitor.

Tigger deposits are still very much standard practice with people I speak to - I certainly wouldn't be accepting an offer without one.

quote:Originally posted by wino

Tigger deposits are still very much standard practice with people I speak to - I certainly wouldn't be accepting an offer without one.

That's what I thought, wino, and that is what concerned me at the time. So my fingers are crossed that all will go through okay for them...[]

i will pass that info on thanks all

Yes Tigger, it was us last year.

A deposit is paid to the real estate office upon going unconditional. They hold it for 10 days. After which time, they can take out their fees and forward the balance to you. This can then be used if you need a deposit to buy your next property and so on.

In our case, the ratbag only paid a very, very small deposit and refused to budge on the issue. Being the trusting folk we were, we went along with this. 4 days after going unconditional, they pulled out of the sale. Needless to say, they forfeited their deposit (as per the real estate agreement). But we got left completely out of pocket as we had lawyers fees to pay, plus other expenses involved in purchasing (conditional thankfully) another property.

Standard requirement is 5% or 10% of the sale value, but it is all down to the buyer and seller as to what they agree on. If they have paid a substantial deposit, they are unlikely to want to pull out of the sale as they would loose said deposit.

Never again will I agree to anything less than 10% deposit - even if it risks loosing the sale. We got stung badly thru no fault of ours and only recourse is the Disputes Tribunal to which I am still considering a case.

cheers
Jan

As a general comment and not aimed at you Jan...

One can always purchase a bridging bond from their Bank for a deposit for purchasing property, I think when we did it last time, for the 10% deposit, it cost us about $100 in interest.... and considering the overall benefit it gave us, and the fact my Visa interest is substantially more for substantially less, [:0][] then I thought it a good deal.

So there is no need to accept an extremely low deposit offer from anyone. They have their choices, and if they cannot afford those choices, then they cannot afford your home.

But for the Vendor, it allows them then to use the balance of deposit for the deposit on their next purchase. conditional of course like Jan's, in case the very worst happens (which does occasionally, a mate on the north shore had funds withheld from the sale of his former marital home because the purchaser didn't think a renovation issue was up to the asking price and wanted him to pay for another to her taste - she later lost in court).

Actually the deposit is nomally paid on signing the contract. The RE is paid their commission when it goes unconditional, and any remaining money is then forwarded on.

It is possible to request the deposit to go directly to the laywer, or even straight to you, but then you still have to pay the agent, so they are not so keen to do this.

Is interest paid on trust a/cs? What happens to it? My 10% deposit sat in a RE trust account for over a year pending title!

Hmmm, I think I would have requested it be shifted to my solicitor's interest bearing account.

Bugger, hilldweller.

You also have to formally apply for the balance of deposit. Ie, in writing, sometimes via your solicitor if you have one acting on your behalf.

No one tells you about this of course... it was only a few years ago I learned of it when a vendor requested release of our deposit on a property for their deposit, that I found out about it. Since then I have told several others, all who have been given the funds (with varying amounts of grief).