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Contract Offer - what is the sweet spot for a deposit amount

Discussion in 'The Buying & Selling Process' started by Fitzy1903, 4th Sep, 2015.

  1. Fitzy1903

    Fitzy1903 Well-Known Member

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    Perth
    Hey guys,

    I was just wondering when you make an offer, what is the sweet deposit for a deposit amount? Is it like a $1k or $5k or 10% etc. I'm planning to put an offer on a house (in Victoria) tomorrow, so was wondering what would be a good desposit amount that would be looked at favourably by both the real estate agent and the vendor?

    Thanks!
    Fitz
     
  2. Greyghost

    Greyghost Well-Known Member

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    In vic normally 10%.
     
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  3. Big Will

    Big Will Well-Known Member

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    The more the better in both the REA and vendors eyes.

    Usually $1,000 initial deposit (upon signing the CoS) and then either 5% or 10% of the purchase price upon acceptance.
     
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  4. Fitzy1903

    Fitzy1903 Well-Known Member

    Joined:
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    Perth
    Thanks guys.

    So Big Will, do you mean when putting down my offer, have a cheque deposit of $1k, then when the vendor accepts the contract, have it as 5-10% of the purchase price.

    i.e. within the offer and acceptance form
    Payment
    Price - $500,000
    Deposit - $50,000 (10%) of which $1,000 has been paid (through the cheque)
    Balance - $450,000

    Fitz
     
  5. RPI

    RPI Property Lawyer, Town Planner Business Member

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    In QLD it doesn't seem to make much difference as they now it only sits in trust and get it all back anyway if you terminate under our very buyer friendly finance clause.

    We rarely see contracts with deposits of more than $1k. Off the plan contracts are different of course because of the funder's 10% deposit requirement.
     
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  6. Big Will

    Big Will Well-Known Member

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    usually $1,000 in cash or eft into a trust account but yes if that is what you have negotiated.

    The $1,000 is to show them you are commited and if you cool off they don't have to chase you for the money. However no one really wants to part with 25k or 50k (5-10%) for putting in an offer.