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DOES OFFERING A BIGGER HOUSE DEPOSIT IMPROVE YOUR CHANCES? · The Real Estate Show

• 0:00
  Speaker 1: Well, can imagine you've found a place. You've been searching
• 0:02
  Speaker 1: high and low, you know, for a place you really want.
• 0:04
  Speaker 1: You've found one that you absolutely love. You want to
• 0:07
  Speaker 1: put your best foot forward, you want to throw everything
• 0:08
  Speaker 1: at it right to lock it in lock it down
• 0:12
  Speaker 1: is one of the ways you could do that putting
• 0:14
  Speaker 1: in a higher deposit than what's required. We're wondering this morning.
• 0:19
  Speaker 1: And Steve Lowe is director at Agent Team Canberra. Good morning, Steve,
• 0:24
  Speaker 1: good morning. Now, firstly, before we get into that, when
• 0:26
  Speaker 1: you're putting a deposit down on a property, what are
• 0:29
  Speaker 1: the requirements because.
• 0:30
  Speaker 2: It's a bit different in the Act to New South Wales.
• 0:32
  Speaker 3: Right right, Oh, no, it's a bit more different in
• 0:37
  Speaker 3: Queensland Act in New South Wales are very.
• 0:40
  Speaker 1: Similar, okay, and so what are the requirements there?
• 0:43
  Speaker 3: All right, So we'll talk about private treaties are nine option.
• 0:46
  Speaker 3: So private treaty, when you make it off on the
• 0:48
  Speaker 3: property before it can exchange, you need to have the
• 0:51
  Speaker 3: deposit cleared in the stakeholder's trust account. Stakeholder could be
• 0:54
  Speaker 3: the agent or it could be the solicitor and it's
• 0:57
  Speaker 3: always on the front page of the contract. The deposit
• 1:00
  Speaker 3: it at risk is always ten percent. So there's a
• 1:04
  Speaker 3: box next to the deposit on the front page which
• 1:08
  Speaker 3: there's the positive plan installments, cause fifty two applies. If
• 1:11
  Speaker 3: that is picked, you can pay a five percent deposit.
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  Speaker 3: But if you pull the other deal after exchange, you
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  Speaker 3: lose your five percent and they pursue you for the
• 1:19
  Speaker 3: other five percent.
• 1:21
  Speaker 1: Wow, does that happen much?
• 1:23
  Speaker 3: No, that's good. Yeah. Well yeah, when I said, it
• 1:28
  Speaker 3: means we don't get paid twice, yes, yes.
• 1:31
  Speaker 2: Yes, okay, So so it's the five ten percent. So
• 1:36
  Speaker 2: with those figures in mind, then to improve your chances,
• 1:39
  Speaker 2: as Rene asked that question, can you put more down?
• 1:44
  Speaker 3: No, it makes no difference whatsoever, because only ten percent
• 1:47
  Speaker 3: at risk. So let's just say you come to me
• 1:49
  Speaker 3: with an offer and you go, oh, I've got a
• 1:50
  Speaker 3: fifty percent deposit. It's like, good for you, we only
• 1:53
  Speaker 3: need ten percent. If you paid me fifty percent, we'll
• 1:55
  Speaker 3: have to return you forty percent if it doesn't go through.
• 1:58
  Speaker 3: It makes no difference to the strength you offer. What
• 2:00
  Speaker 3: makes a big difference to the strength of the offer
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  Speaker 3: is somebody that is proactive and follows the instructions when
• 2:07
  Speaker 3: you make an offer. Because a lot of people hold
• 2:09
  Speaker 3: off paint a deposit for a few days and it
• 2:12
  Speaker 3: takes another few days to clear, and that can delay
• 2:14
  Speaker 3: the exchange process, which means the property still remains in
• 2:17
  Speaker 3: the market and you could be gazumped.
• 2:19
  Speaker 1: Okay, and literally, like in situations like that, a day
• 2:23
  Speaker 1: can make a big difference, can't it?
• 2:25
  Speaker 3: Massive difference. We had one the other day and she
• 2:28
  Speaker 3: was a little bit slow and pain the deposit. Another
• 2:29
  Speaker 3: buyer came through and made a twenty thousand dollars higher offer,
• 2:32
  Speaker 3: which you know, we have to take to the seller,
• 2:35
  Speaker 3: and so she then improved her offer and yeah, that
• 2:38
  Speaker 3: was a pretty costant mistake for she got the property,
• 2:40
  Speaker 3: but it cost her twenty one thousand dollars extra.
• 2:42
  Speaker 1: Yeah.
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  Speaker 2: Man, okay, so the size of all the amount of
• 2:44
  Speaker 2: the deposit, that doesn't worry. It's like you can come
• 2:46
  Speaker 2: over the top with that big and you're not supposed
• 2:48
  Speaker 2: to do that, are you? But it happens, right but
• 2:51
  Speaker 2: surely surely though, if you roll up with a fifty
• 2:54
  Speaker 2: percent deposit, that just demonstrates to the vendor.
• 2:58
  Speaker 3: That you you mean business or you want the property
• 3:01
  Speaker 3: right in some ways, Yeah, but I guess it means
• 3:07
  Speaker 3: that they're like they're not relying on a ninety percent
• 3:10
  Speaker 3: borrowing from the bank or sometimes you're going to get
• 3:12
  Speaker 3: ninety eight percent borrowing from the bank at the moment,
• 3:15
  Speaker 3: and so it means that they're probably in a strong
• 3:17
  Speaker 3: cash position, so you're not going to be too worried
• 3:19
  Speaker 3: about the bank valuation coming in short or the finance
• 3:22
  Speaker 3: not coming through. So it's something that we consider, but
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  Speaker 3: it doesn't make the offer stronger than person.
• 3:28
  Speaker 1: B Okay, that's good to know, and so what are
• 3:31
  Speaker 1: one or two other ways just quickly, how people can
• 3:34
  Speaker 1: you know improve their offer.
• 3:37
  Speaker 3: Good offers are made up of really three things. A
• 3:40
  Speaker 3: good price, you know, a five or ten percent deposit
• 3:43
  Speaker 3: but you know, a proactive approach towards it, and terms
• 3:48
  Speaker 3: that you feel suit the seller's situation. They might be
• 3:51
  Speaker 3: selling because they're looking to upsize, so they might require
• 3:54
  Speaker 3: a long distillment and if you can back to that
• 3:56
  Speaker 3: in sometimes that's worth more than the actual sale price
• 3:59
  Speaker 3: to the sellers them, yes.
• 4:00
  Speaker 1: One hundred percent matching and what they want to do
• 4:02
  Speaker 1: for settlement for sure. Well, Steve, that's yeah, really interesting
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  Speaker 1: to learn from you this morning. Yeah, thank you so much.
• 4:10
  Speaker 3: That's all right, and don't worry like I will look
• 4:11
  Speaker 3: after the deposit and it's fully refineable exchange.
• 4:16
  Speaker 1: Good to know, Thank you, Thanks so much. Steve Low
• 4:20
  Speaker 1: who's a director at Agent Tea in Camper there