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how much deposit is normal

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  • how much deposit is normal

    Would like to know whether the amount of deposit offered in a house sale really matters and whether there are any implications with a low deposit? I guess the buyer wants to offer less and the vendor would like 5-10% - is there any normal amount, TIA.

  • #2
    Normal minimum is enough to cover agents fees so 5%.

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    • #3
      I have never paid a deposit.

      www.3888444.co.nz
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      • #4

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        • #5
          the only time a deposit comes into play for the vendor is if the purchaser fails to settle, if this happens and the buyer tries to walk away the deposit is in most cases forfeited. So in some way a larger deposit creates a disincentive for the buyer to walk away.

          agents want a deposit to cover their selling fee as they often access the deposit as their payment once the contract goes unconditional - if the deposit doesn't cover their fee they have to wait till settlement.

          I only ever offer a small deposit

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          • #6
            Whist technically that's true Hype I have closed many a private sale by offering a big deposit. A LOT of sellers over 50 think it is a sign of good character. IF you have the funds and you think the seller is nervous, use it to get them closed at a good price.

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            • #7
              Originally posted by fuzzlevalve View Post
              Whist technically that's true Hype I have closed many a private sale by offering a big deposit. A LOT of sellers over 50 think it is a sign of good character. IF you have the funds and you think the seller is nervous, use it to get them closed at a good price.
              i agree a bigger deposit can be seen as a sign of commitment. I also wonder if agents undersell presenting an offer with a low deposit if the deposit doesn't cover their fee.

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              • #8
                The answer really depends on your side in the transaction. If you are selling (sounds like you are), then you want as much deposit as possible, usually 5% -10%. This needs to cover the Agent fees and ensure the buyer us committed.
                If you are the buyer, you want to try for 0% deposit, so your money stays with you as long at it possibly can
                Living a more meaningful & enhanced life with investments, business and blogging. www.theFIminator.com

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                • #9
                  I also am happy to pay a large deposit if I can get a proper a bit cheaper.
                  Squadly dinky do!

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                  • #10
                    Aren't us nasty PIs driving up house prices by paying top dollar cause we get BIG tax breaks???

                    Personally I make lower offers with big deposit cheque attached.
                    Vendor might consider a lower price when they see $$$.
                    The three most harmful addictions are heroin, carbohydrates and a monthly salary - Fred Wilson.

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