When to pay the deposit on a house purchase

EZ26

Hi,

after paying the first booking deposit to the estate agent, can I wait to pay the big one until the seller signs the contract?

Thanks

Mod
Consult your solicitor. Cannot give legal advice here[B][/B]

Ghekko

Have sold 2 houses in past year and purchaser organised transfer of their funds to our solicitor after contracts were signed by both parties. For us there was one booking deposit paid to EA and then the full balance after signing.

EZ26

This is absolutely useful, thanks!

Ghekko

Just to clarify 10% of the purchase price was paid on booking and the purchase balance then paid a few days after signing contracts. Neither house was over 100k so deposits weren't outrageous amounts. Not sure if things would be different if you were expected to pay a 50k booking deposit if house was half a million for instance.

EZ26

Oh OK, no, the situation I'm describing is a little bit different, is when you pay 5000 to the estate agent to block the house, then the balance of 10% I was hoping after signing contracts but from what I've understood that is before the seller signs?

This doesn't make much sense, if the seller doesn't sign I have to wait to get 10% deposit back, really I don't get it.

theteal

Sorry to derail, but you pay a deposit before the actual deposit in Ireland? Like a sale agreed deposit?

EZ26

Yeah, you have to pay a booking deposit and then the balance to cover 10% but I'm not sure if I can pay that after the seller has signed the contract. It seems pretty stupid to pay it before and then ask for the refund if the seller the day after says he doesn't want to sign...

allybhoy

Just bought and sold a house in the last 6 months, booking deposit is paid to EA upon going sale agreed with the remainder of the deposit transferred to my solicitor upon closing. In my case as i was a 2nd time buyer I had to pay 20% deposit, so upon closing I had to pay 20% deposit to my solicitor minus the 5k initially paid to the EA. So for example if house was worth 400k, i had to pay 20% of 400k (80k) - 5k, so i paid 75k to my solicitor. If i was a 1st time buyer i would have only had to pay 10% so i would have paid 35k... (40k -5k)

EZ26

this is very useful allybhoy but what do you mean with "closing"?

Victor

EZ26 wrote: »

this is very useful allybhoy but what do you mean with "closing"?

Closing is the process where the balance of funds is transferred, property vacated, keys are handed over, etc.

theteal

EZ26 wrote: »

Yeah, you have to pay a booking deposit and then the balance to cover 10% but I'm not sure if I can pay that after the seller has signed the contract. It seems pretty stupid to pay it before and then ask for the refund if the seller the day after says he doesn't want to sign...

Not that this is helpful to your issue but over here, you only pay deposit when contracts are signed. Sale agreed is just a verbal agreement. By no means is this perfect/better, it can lead to issues on both sides but for reference that's just how it's done. In the last 16 months we have been both gazumped and had to pull out of a sale just at contract signing stage. Granted we lost legal and surveyor fees but at least we didn't have wait for deposit back.

EZ26

thanks for saying this, how much did you lose if you can say?

The more I read about these crazy stories the more I'm thinking to rent forever

allybhoy

I also had a similar scenario to theteal... in the first house we went sale agreed on the seller pulled out 5 weeks after we went sale agreed.

In my scenario I lost the bank valuation fee (€150) and the structural survey fee... (€400) but it was the stress \ disappointment of losing it, not to mention the fact that house prices had risen significantly even in the short period of time above all else that was worse to be honest.

Look, these things happen, you move on, best advice I can give, is to not try and stay as calm and as level throughout the process, dont start thinking too far ahead of yourself.

Also, remember that the estate agent is working for the seller not for you... he will try and hound you to get the valuation and survey done within the first week or two of going sale agreed.... From the valuation perspective, this is important as your mortgage approval will depend on this, but the survey can be left until later in the process.