In a competitive market, would it make sense to put down a huge 10% deposit?

It LITERALLY means nothing at the end of the day, since you'd have to pay 10% anyway (unless you go higher with LMI). And it also means nothing because you could still pull out subject to the cooling off periods etc.

But some (not all) unsuspecting vendors might see 10% vs. the minimum 0.025% and think..."holy crap this guy is more serious than the other guys, I'll take this offer". When in actual fact, you're not really laying down any more cash or taking on more risk than any of the other buyers / offers.

What do you guys think?

 

Agents like it and your offer is looked on more seriously if you haven't bought through them previously. I've done this several times recently though it wasn't 10% but an amount fairly close.
As you said it doesn't make any difference in the long run as the vendor still gets their funds at the same time.

 

Perception is reality, as the saying goes.

 

And you'd still have to pay it anyway. And you could still pull out. There's literally no difference but yeah I wonder if unsophisticated vendors and agents might be fooled into thinking it's a stronger offer. It could be a good technique for those that are not in a position to match cash offers.

 

Offering more would be better but without doing that you may not need a finance clause either which in the current environment strengthens your position compared to the guy offering a 1k deposit.

 

If you have clauses added to the offer, a larger deposit may not have any sway.

Would you accept $500K offer with a 10% deposit over $500K 0.25% deposit unconditional all cash offer?

 

As I said:

I wouldn't expect it to sway most, but you never know, all you need is a few...

When markets get hot, every advantage helps.

 

Do I need to buy and use that as a deposit on my new place?

There is an early release of deposit that can be done and there is strict criteria that must be met.