Join Australia's most dynamic and respected property investment community

Agent wants 10% deposit into trust account before accepting remote auction bidding

Discussion in 'The Buying & Selling Process' started by HappyCamper, 29th Sep, 2015.

  1. HappyCamper

    HappyCamper Active Member

    Joined:
    18th Jun, 2015
    Posts:
    41
    Location:
    Sydney
    So I've bought a couple of times at auction without physically being there. Agents were happy for me to send a bank cheque / EFT on the next business day. Smooth as.

    Anyway, I'm wanting to bid remotely at the auction of a house I've seen. Established Melbourne franchise, etc etc. I've spent some money flying in to inspect, do building/pest, etc. The answer I get is that they want me to deposit 10% into their trust account before they'll let me remotely bid at the auction, to be refunded if I am unsuccessful. Long argument with the principal on the phone and they won't budge.

    Has anyone heard of such a thing? I want the house. It's the first that's tickled my fancy in this area after months of watching. At this stage, I'm thinking I'm just going to have to take a day off and fly down for the auction.
     
  2. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,536
    Location:
    Sydney or NSW or Australia
    They don't know you from Adam. What's your 10% vs theirs?

    Will they accept a taken 1%?
     
  3. HappyCamper

    HappyCamper Active Member

    Joined:
    18th Jun, 2015
    Posts:
    41
    Location:
    Sydney
    I would argue that they don't know any of the bidders either.

    Not sure I understand your question about my 10% vs theirs?
     
  4. Simon L

    Simon L Investment Property Buyers Agent Business Member

    Joined:
    18th Jun, 2015
    Posts:
    184
    Location:
    Sydney, Brisbane
    If its a bank sale, sometimes they require phone bidders to have the deposit in the agents trust account before allowing you to bid. Have done this many times and always refunded when unsuccessful.
     
  5. HappyCamper

    HappyCamper Active Member

    Joined:
    18th Jun, 2015
    Posts:
    41
    Location:
    Sydney
    This one isn't a bank sale. The agent just indicated it was company policy.

    I dunno, it just rang alarm bells for me.

    I'm sure the agent would tell me to piss off too if I were to ask for a $50k deposit for a 3 month exclusive listing.
     
  6. Greyghost

    Greyghost Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    1,253
    Location:
    Melbourne
    Well if you want to bid I guess you are going to have to cough it up..
     
  7. TMNT

    TMNT Well-Known Member

    Joined:
    23rd Jul, 2015
    Posts:
    1,383
    Location:
    Melbourne
    ive done it before too, and yeah they dont budge,

    sometimes its an agency poilicy someimtes its a bank policy,

    I usually just express post a personal cheque, and tell them to rip it up if im not successful
     
  8. KateAshmor

    KateAshmor Victorian conveyancing lawyer Business Member

    Joined:
    25th Jun, 2015
    Posts:
    74
    Location:
    Melbourne
    Not recommended. It would be reasonable to pay $1,000 beforehand, which is to be returned to you if you are unsuccessful. A gesture of good will and good faith. Far less likely that either party will do something dodgy.
     
    Esh and HappyCamper like this.
  9. retire@45

    retire@45 Active Member

    Joined:
    30th Jul, 2015
    Posts:
    31
    Location:
    Sydney
    If it's auction you have no idea what it will sell for so it's not even possible to give them 10% of the sale price before hand... sure 10% of reserve or expected price but it probably won't be 10% of the sale price
     
  10. S.T

    S.T Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    428
    Location:
    I'm not selling anything
    Good way of an agent gauging what you will pay for a property
     
    ej89, CU@THETOP, retire@45 and 2 others like this.
  11. Biz

    Biz Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,471
    Location:
    Sydney
    Tell them to stick their auction up their bum.
     
  12. CU@THETOP

    CU@THETOP Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    227
    Location:
    Brisbane
    Approach the vendor directly. Tell them the problem and tell them you want to bid and pay the 10% within 3 days. Tell them to over ride the agent on this point. Express your concerns that it is almost like they don't want you to bid and should you bother trying or has the agent already chosen who the successful bidder is.
     
    S.T likes this.
  13. ej89

    ej89 Well-Known Member

    Joined:
    21st Jun, 2015
    Posts:
    688
    Location:
    Sydney.
    Just send them a 5k cheque and get everything in writing so you can definitely get it back..
     
  14. HappyCamper

    HappyCamper Active Member

    Joined:
    18th Jun, 2015
    Posts:
    41
    Location:
    Sydney
    Thanks for the replies everyone. I wanted this one, so ended up flying down for the auction. Sure as hell wasn't going to be depositing $50k in their account. They wouldn't budge on anything less. Anyway, it turned out they had a heap of interest and the house went for over the odds. Seems like this is the way it works in Melbourne, although another agent for another house seemed ok with a token $1k. Bought in Sydney and Adelaide without the need for a pre-auction deposit.