what size deposit on S&P?

[Nectar]

Hi there

we are looking to make an offer for our first property and wondering what % deposit is usually acceptable to put on in your S&P agreement?

Cheers,
N

[AlFa]

usually it's 10% but you can negotiate

[PC]

As small as possible - unless you are trying to impress the vendor.
The main aim of the deposit is to pay the real estate agents commission.
They grab it as soon as the contract goes unconditional - so they will push for >4%.

If the contract goes unconditional but for some reason settlement doesn't occur - you are likely to loose your deposit.

[Keys]

At the start, make your first offer with a 10% deposit. If they counter offer and you are happy with it, sign it off but remove the deposit.

[Damap]

5% is enough. This covers the agents fees if an agent involved.

[orion]

Yes only need to do 5% or maybe just over to cover agents' commission.
If privately, nil is usual.
Have only had one lawyer that asked for a deposit when buying privately.

[Nectar]

Thanks all - much appreciated!

[RTP]

Have only had one lawyer that asked for a deposit when buying privately.

I'm surprised to hear that. I would always recommend vendors insist on a deposit, otherwise there's nothing to stop the purchaser backing out if they change their mind.

[orion]

I'm surprised to hear that. I would always recommend vendors insist on a deposit, otherwise there's nothing to stop the purchaser backing out if they change their mind.

If it's unconditional, then you can't back out of it anyway.
The deposit is really only there so the agents can get paid 10 days after the deposit has been paid.
Otherwise they would have to wait until after settlement.

[ladyagent]

The main aim of the deposit is not to pay the agent's commission!

[Damap]

In Auckland it would be a miracle to get a no deposit contract over the line. 5% is enough it covers agents fees, which is the sole purpose an agent wants to see it. Private sales in the provinces might work on no deposit but not in Auckland. Just use 5% on everything held by your lawyer. I can't remember ever getting on knocked back.

[Bob Kane]

Made an offer yesterday with $0 deposit.
It was accepted today.
Must be the grumpy way I looked at the agent!

[RTP]

If it's unconditional, then you can't back out of it anyway.

Yes, but if the purchaser backs out then the vendor would have to spend money to make them go through with it. If there's a decent deposit on the line there's an immediate loss to the purchaser for backing out.

[BigDreamer]

For the last 5 purchases excluding the unconditional contract I have just signed two weeks ago for an Auckland rental, I have only agreed to a $1,000 deposit. 4 of the purchases were in Hamilton and 1 in Rotorua.

Regardless what the real estate agents say, I always stick to the $1,000 deposit. The only time I did not add this was for the last purchase which was an Auckland investment and I agreed to a 10% deposit, unconditional agreement, as it was a good price for a good area.

[Damap]

Auckland is different. A vendor would be a fool to accept a no deposit contract.