Non Refundable Deposit

Hi- I have placed a bid on a property which has been accepted but the vendor wants a non refundable deposit pending the sale of my property within 6 months. I need to sell my property to fund the new purchase. Any advice?

On the face of it, this is not a great deal for you.

Few questions:

1. How much of a deposit have they requested?
2. What does your solicitor think?
3. How long have you had your property on the market? Have you had viewings, interest, offers etc?
4. How long has the property been on the market?
5. Presumably THEY don't have the right to pull out without returning you the deposit?
6. Is this subject to a survey? What if you discover major structural damage - can you pull out or reneotiate price?

If the deposit is substantial, you will be committing yourself to selling your own property for whatever is offered if you if don't want to lose the deposit. In the current market is this wise, where people are routinely bidding 20% less than asking price?

Are non refundable deposits standard practice when buying a property before the legal contracts are signed ?

It sounds like a bad bet from your point of view.

If you can't complete, then the developer keeps your deposit.

If the developer gets a better offer, then he or she can accept the better offer and return the deposit to you.

For the developer, it sounds like a great idea, it's a one way bet for the developer.

The deposit does not make it legally binding, your deposit means nothing if the developer gets a better offer.

My advice, don't pay a non refundable deposit, it does not secure the sale, and you lose the money if you can't complete.

I would be VERY surprised if he vendor was a developer here.

pinhead said:

Hi- I have placed a bid on a property which has been accepted but the vendor wants a non refundable deposit pending the sale of my property within 6 months. I need to sell my property to fund the new purchase. Any advice?

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A good piece of universal advice to be used when entering a contract, which is applicable here:

Never, ever, enter a contract that places conditions on you that depend on factors beyond your control. In your case, the sale of your house.

Camry said:

A good piece of universal advice to be used when entering a contract, which is applicable here:

Never, ever, enter a contract that places conditions on you that depend on factors beyond your control. In your case, the sale of your house.

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Common sense and great advice.

If you have to sell your house to be able to buy an other one, and have not sold yours yet, then you are a wannabee buyer.
There was a very good post from MF1 a while back about this.
Fair enough the seller wants a non refundable deposit of you.

Many thanks for the advice guys. Some very sensible thoughts expressed.