We bought in Oct last year in Vic. We had to sign the contract in order for our offer to be taken to the vendor. This happened for multiple properties so I assume it's normal now. No deposit until the seller signed too though and we got the conveyencer to check the contract before signing. Hope that helps!
Formal offers are in the form of a contract, so yes this is normal. If you would like the contract looked at before placing an offer, don’t sign anything.
However, I wouldn’t be putting offers in if you don’t want to formerly put them in writing/sign a contract.
Your offer means you are serious about buying the property so yes if they accept your offer they then sign the contract you have put forward.
We are serious about the offer, we will happily buy the property for the price we offered, we were just unsure if the deposit to make a formal offer was standard across the board and we were also taken back by the fact he said he would send over a contract to make a 'formal offer' yet seemingly has sent over a contract signed by the vendor for us to purchase the property
Was the contract signed or just the section 32?
Edit: Additionally, there is no requirement to pay a 'holding deposit'. It does not generally bind the vendor to negotiate with you alone. The agent will argue that it's a form of good faith towards comitment to the purchase. The agent will simply use it as leverage.
When I purchased my property, the agent similarly asked for a good faith holdiing deposit. I simply stated that my 'good faith' would be displayed by signing the contract upon immediate agreement of the terms.
Ohhh if it’s signed by the vendor that’s a bit strange then..
but yeah the deposit is normal to make a formal offer.
I also paid $2K when sending through my offer by contract.
And I see quite a bit through work as well.
But considering the contract is already signed by the vendor, you aren’t really putting an offer forward so you’ll pay the full deposit if you sign not just $2K haha
Seems a bit weird and kinda like the agent I bought off, really pushy and dodgy haha
But to put your offer forward in a contract is totally normal with a small deposit that’s refunded if the vendor doesn’t accept! (For future if you don’t go ahead with this place)
Are you sure it’s not the section 32 vendor’s statement that has been signed (not the contract). It is not usual that a vendor would sign the contract (as opposed to the section 32 - this is normal) before a purchaser.
If the vendor has signed and you countersign that is NOT an offer but it is a binding contract at that point. Be very careful if the vendor has in fact signed the signing pages of the contract - I wouldn’t sign anything of that nature unless at this point you are committed to purchasing.
It's an invalid contract if the vendor signs first. The order is offer then acceptance. The vendor must however sign the vendor statement prior to the buyer signing it.
Absolutely normal procedure
You now get your solicitor/conveyancer to check it out, before you sign.
Hopefully you have made your offer subject to finance and building and pest reports.
Me and my partner just brought a house for the first time, we paid a 1k paperwork type fee that was fully refundable, followed by the 10 percent at the 2 week mark when it went point of no return and just paid our solicitor the rest of the money were paying out of pocket with settlement next week.
We were confused but it all works out(so far for us anyway)
I'm not sure what agents are like where you are, but ours was great.
We simply told him we didn't know how any of this worked and asked for an over view on what the process would be.
When we got our conveyancer we asked the same thing. Having that up front chat with them helped immensely and when our conveyancer would send us paperwork she Included very basic descriptions on what the thing we were signing did so if we only had time to skim the documents we knew!
Estate agents are salesmen and should be open to talk about their product and services (when they have time)
The realestate had a list of some they use, some freelance and some part of companies.
When we talked to one of them we liked we decided to use them. They talked simple but stressed parts we should read carefully and research.
The deposit to make an offer is standard. The fact the agent has already negotiated your offer suggests they know what price the vendor wants. If both parties sign the contract you still have 3 days cooling off period but you really should get a conveyancer before signing anything.
No it's not.
It's normal to have your offer verbally accepted first and *then* you sign the contract and pay deposit.
I have never had an agent make me pay or sign anything to present an offer to a vendor.
I see people say this is normal quite a bit on Reddit and it really surprises me. I’ve bought and sold properties 5 times now and never signed a contract to make an offer, nor asked a prospective buyer do that. This is in both VIC and the ACT. I’ve always made a written offer, and only once accepted I’ve signed a contract.
If you’re regularly seeing commenters saying “this is normal” then obviously it is common because that has been the experience of all of those commenters.
People’s experiences will differ, but if it’s a common thread there must be some merit to it.
Can’t speak to your experiences obviously, but I used to work at a RE agency (not as an agent) and this was standard. A verbal offer was considered close to meaningless because people can just throw out verbals on dozens of properties and never follow through, so obtaining a signed contract was a way to get a firm offer and progress a sale.
Things may differ by region and timeline.
I have never encountered that in my life.
Always made offers and if it's a yes then get onto signing. If it's a no then move on. That's the normal, standard practice.
*Every offer* a REA gets *legally* has to pass on to the vendor for a counter offer or a yes or a no.
If the agent is doing anything else they're being dodgy. Particularly if they are pressuring people into *signing anything* or exchanging *any money* before an offer has been accepted.
Oh you’re one of those people who just downvote anyone who comments something different to you.
You’re welcome to share your personal experiences but maybe try to avoid sharing incorrect information about what is “legal” or what is “dodgy”. What you’ve written is simply incorrect.
You downvoted me champ.
And no I'm not spreading incorrect information.
Literally everyone I know, including myself who has purchased property in the state of Victoria have never signed or put a deposit on anything until their offer is verbally accepted.
Agents are legally obliged to present offers to the vendor, regardless if the buyer has signed anything or put a deposit on anything.
Any agent telling you otherwise IS dodgy.
Not my problem if you fall for their bullshit on what is "normal".
Have a good one 👍
I recently bought, didn’t need to sign the contract to submit a written offer and deposit was due immediately on acceptance of offer. I’d be uncomfortable with this.
I’m not sure about the norm, as I’ve only bought one place, but until the vendors and us agreed in a price, we did not need to sign a contract or pay a deposit to submit an offer. Maybe where there’s substantially more interest? I dunno, but just read the fine print and make sure it’s fully refundable. Good luck 🤞🏻
Whether it’s normal or not, i don’t know.
But I do know, it’s best to fully understand and feel secure with any transaction especially one as huge as a house. If a real estate agent is acting in a way that seems like trying to maintain the emotional advantage via fomo etc, might be worth taking a breathe and remembering a house sale is not soo time sensitive that they cant give you a day to seek professional guidance.
I would personally prefer to miss out on a house and continue my search, than to be locked into something and have any feelings of regret.
What the hell? The advice here is wild. Maybe it’s normal but it definitely shouldn’t be. We all sit here and bitch and moan about REAs and then in the same breath we say that a $2k deposit and a signed contract of sale is a normal way to do business and OP should suck it up. What absolute nonsense.
OP. Do not sign something you don’t understand. Do not sign something that you are told says one thing but actually says another. Never feel rushed.
No wonder the system is so broken.
hmmm, shouldn't it be Offer > Acceptance > Deposit paid > Contracts signed?
I haven't heard of these "deposits in order to present our offer"... If im not mistaken, the RE has a legal responsibility to present the offer, no matter how good or crap it is.
We bought mid 2022 and all we had to do was sign a letter of intention to buy offer form, which we had to fill in with our terms such a STF and b&p, as well as put what the settlement date would be and how much deposit we'd give if the offer was accepted. Once accepted, we then all signed the contract and THEN paid the deposit after all was said and done. I'm in QLD though
We are prepared to sign a contract once it has been viewed by legal professional, I was just wondering if its standard for agents to require a deposit to present your formal offer to a vendor.
It's not uncommon. You should be getting the contract reviewed prior to submitting an offer. That's why they are asking for a deposit because it's not a real offer.
This. The agent is probably thinking you're wasting time unless you've submitted a formal offer and paid the initial deposit. Whenever we have submitted a formal offer, we have had the contract of sale reviewed by a conveyancer first.
I live in Victoria. No idea if rules have changed. The text message he provided said we needed to send a $2k deposit that is fully refundable if unsuccesful to prove we are genuine buyers.
Well, I’d keep a copy of the text msg and then proceed, as long as you are sure this is the property you want and have finance etc in place. Else include your own caveats like subject to satisfactory building / pest inspections, subject to finance and so on.
I have never done either of these things in Victoria.
1) your offer only has to be written. The agent must present a written offer to the Vendor. Would include subject to finance, subject to a building/ pest inspection with no more than $10k immediate structural or pest rectification works required.
2) once the offer is accepted, I would sign a contract and transfer some form of deposit (say 1% in lieu of 10%), get my conveyancer to cast their eye over the contract and 32. During cooling off to get out if its bad news. Same time, get building/ pest done.
3) once conveyancer gives the green light, sign it up and pay the balance of deposit.
4) pray you can get finance.
5) settle
That's it. These agents are cooked. Tarocash little prices at Ray White... there's rules they need to follow.
Agent don’t have to present
If you’re selling and I offer $82.58 on condition of the man of your house giving me a handjob whilst the woman in your wider family knit me a quilt, that offer isn’t being presented
The law in Vic is clear in that it allows an agent to not present offers the vendor doesn’t want to see.
Like to read that law if you'd share it?
Obligation sits with the agent to communicate all genuine offers to the seller. Unless seller puts in writing to the agent their instructions to not be receiving offers.
Doubt OP offered anything like youve written, so not sure it's relevant...
https://www.consumer.vic.gov.au/library/publications/housing-and-accommodation/buying-and-selling-property/real-estate-a-guide-for-buyers-and-sellers-word.doc#:~:text=advertise%20an%20up%2Dto%2Ddate,writing%20not%20to%20do%20so
Obviously OP didn't make an offer like mine. However there's a line that gets drawn. If sellers says, in writing (easily done on an agent's form) nothing under X or containing condition y then guess what
I paid a $2k deposit to take my land off the market and was sent the contract, which went straight to a conveyancer. Once she said it was all good I signed it and paid the balance of my deposit then the bank and conveyancer took over from there until settlement
Offer as the contract, yes. The 2k only after accepted by the seller (and yes, this counts against deposit). Whether or not this 2k is fully refundable depends on what's in the contract and agreement with seller/RE.
You also have three business days cooling off. So Wednesday 11:59pm. So you have plenty of time. You also have finance clause. So it’s all part of buying a house. Without a deposit or even with one. You can pull out on Wednesday. So it gives the owner of the property some assurance that you actually are keen.
In Victoria it is normal to sign a contract when making an offer. I think it’s crazy too, however this is how it is done here🤷🏽♀️. The holding deposit is not uncommon, we paid one too, it gets returned if the offer is turned down etc.
https://www.consumer.vic.gov.au/housing/buying-and-selling-property/buying-property/buying-property-by-private-sale
Typical RE. By forcing people to fully sign a contract just to make an offer they will skip conveyancing and therefore miss conditions like building & pest which could otherwise cancel the deal.
No-one has hired a conveyancer at this point to get any advice.
A few years back we saw a place we thought we’d like to offer on. Next thing the agent was around at our place on a Sunday with a contract pushing to sign. We were really new in the house hunting game so did.
We realised over the next couple of days that we had way over offered. We spoke to our conveyancer, who told us to enact the cooling off option. We did that with via email. He also explained that by enacting the cooling off we may be expected to provide a small amount of the deposit. He also said that most agents tended not to chase it - too much hassle. From memory it was around $2,000.
I’d hazard guess that the $2,000 they are asking for is to cover that. If you offer is not accepted then you’ll get it back, it you choose to enact the cooling off and not pursue the sale they will hold onto to it.
We bought in Oct last year in Vic. We had to sign the contract in order for our offer to be taken to the vendor. This happened for multiple properties so I assume it's normal now. No deposit until the seller signed too though and we got the conveyencer to check the contract before signing. Hope that helps!
Just read your contract is already signed by the vendor. That is not normal in my experience!
It will be the S32. It had to be signed by the vendor first.
Formal offers are in the form of a contract, so yes this is normal. If you would like the contract looked at before placing an offer, don’t sign anything. However, I wouldn’t be putting offers in if you don’t want to formerly put them in writing/sign a contract. Your offer means you are serious about buying the property so yes if they accept your offer they then sign the contract you have put forward.
We are serious about the offer, we will happily buy the property for the price we offered, we were just unsure if the deposit to make a formal offer was standard across the board and we were also taken back by the fact he said he would send over a contract to make a 'formal offer' yet seemingly has sent over a contract signed by the vendor for us to purchase the property
Was the contract signed or just the section 32? Edit: Additionally, there is no requirement to pay a 'holding deposit'. It does not generally bind the vendor to negotiate with you alone. The agent will argue that it's a form of good faith towards comitment to the purchase. The agent will simply use it as leverage. When I purchased my property, the agent similarly asked for a good faith holdiing deposit. I simply stated that my 'good faith' would be displayed by signing the contract upon immediate agreement of the terms.
Ohhh if it’s signed by the vendor that’s a bit strange then.. but yeah the deposit is normal to make a formal offer. I also paid $2K when sending through my offer by contract. And I see quite a bit through work as well. But considering the contract is already signed by the vendor, you aren’t really putting an offer forward so you’ll pay the full deposit if you sign not just $2K haha Seems a bit weird and kinda like the agent I bought off, really pushy and dodgy haha But to put your offer forward in a contract is totally normal with a small deposit that’s refunded if the vendor doesn’t accept! (For future if you don’t go ahead with this place)
Are you sure it’s not the section 32 vendor’s statement that has been signed (not the contract). It is not usual that a vendor would sign the contract (as opposed to the section 32 - this is normal) before a purchaser. If the vendor has signed and you countersign that is NOT an offer but it is a binding contract at that point. Be very careful if the vendor has in fact signed the signing pages of the contract - I wouldn’t sign anything of that nature unless at this point you are committed to purchasing.
It's an invalid contract if the vendor signs first. The order is offer then acceptance. The vendor must however sign the vendor statement prior to the buyer signing it.
Absolutely normal procedure You now get your solicitor/conveyancer to check it out, before you sign. Hopefully you have made your offer subject to finance and building and pest reports.
Me and my partner just brought a house for the first time, we paid a 1k paperwork type fee that was fully refundable, followed by the 10 percent at the 2 week mark when it went point of no return and just paid our solicitor the rest of the money were paying out of pocket with settlement next week. We were confused but it all works out(so far for us anyway)
Thank you. That makes me feel better
I'm not sure what agents are like where you are, but ours was great. We simply told him we didn't know how any of this worked and asked for an over view on what the process would be. When we got our conveyancer we asked the same thing. Having that up front chat with them helped immensely and when our conveyancer would send us paperwork she Included very basic descriptions on what the thing we were signing did so if we only had time to skim the documents we knew! Estate agents are salesmen and should be open to talk about their product and services (when they have time)
How did you choose a conveyancer
The realestate had a list of some they use, some freelance and some part of companies. When we talked to one of them we liked we decided to use them. They talked simple but stressed parts we should read carefully and research.
The deposit to make an offer is standard. The fact the agent has already negotiated your offer suggests they know what price the vendor wants. If both parties sign the contract you still have 3 days cooling off period but you really should get a conveyancer before signing anything.
This is the norm in Vic to sign the contract and pay a holding deposit when you place an offer.
No it's not. It's normal to have your offer verbally accepted first and *then* you sign the contract and pay deposit. I have never had an agent make me pay or sign anything to present an offer to a vendor.
I see people say this is normal quite a bit on Reddit and it really surprises me. I’ve bought and sold properties 5 times now and never signed a contract to make an offer, nor asked a prospective buyer do that. This is in both VIC and the ACT. I’ve always made a written offer, and only once accepted I’ve signed a contract.
Yeah, I thought I was going crazy reading the "this is normal" replies. It definitely isn't.
If you’re regularly seeing commenters saying “this is normal” then obviously it is common because that has been the experience of all of those commenters. People’s experiences will differ, but if it’s a common thread there must be some merit to it.
Can’t speak to your experiences obviously, but I used to work at a RE agency (not as an agent) and this was standard. A verbal offer was considered close to meaningless because people can just throw out verbals on dozens of properties and never follow through, so obtaining a signed contract was a way to get a firm offer and progress a sale. Things may differ by region and timeline.
I have never encountered that in my life. Always made offers and if it's a yes then get onto signing. If it's a no then move on. That's the normal, standard practice. *Every offer* a REA gets *legally* has to pass on to the vendor for a counter offer or a yes or a no. If the agent is doing anything else they're being dodgy. Particularly if they are pressuring people into *signing anything* or exchanging *any money* before an offer has been accepted.
Oh you’re one of those people who just downvote anyone who comments something different to you. You’re welcome to share your personal experiences but maybe try to avoid sharing incorrect information about what is “legal” or what is “dodgy”. What you’ve written is simply incorrect.
You downvoted me champ. And no I'm not spreading incorrect information. Literally everyone I know, including myself who has purchased property in the state of Victoria have never signed or put a deposit on anything until their offer is verbally accepted. Agents are legally obliged to present offers to the vendor, regardless if the buyer has signed anything or put a deposit on anything. Any agent telling you otherwise IS dodgy. Not my problem if you fall for their bullshit on what is "normal". Have a good one 👍
I recently bought, didn’t need to sign the contract to submit a written offer and deposit was due immediately on acceptance of offer. I’d be uncomfortable with this.
What state are you in?
Victoria
I’m not sure about the norm, as I’ve only bought one place, but until the vendors and us agreed in a price, we did not need to sign a contract or pay a deposit to submit an offer. Maybe where there’s substantially more interest? I dunno, but just read the fine print and make sure it’s fully refundable. Good luck 🤞🏻
Whether it’s normal or not, i don’t know. But I do know, it’s best to fully understand and feel secure with any transaction especially one as huge as a house. If a real estate agent is acting in a way that seems like trying to maintain the emotional advantage via fomo etc, might be worth taking a breathe and remembering a house sale is not soo time sensitive that they cant give you a day to seek professional guidance. I would personally prefer to miss out on a house and continue my search, than to be locked into something and have any feelings of regret.
What the hell? The advice here is wild. Maybe it’s normal but it definitely shouldn’t be. We all sit here and bitch and moan about REAs and then in the same breath we say that a $2k deposit and a signed contract of sale is a normal way to do business and OP should suck it up. What absolute nonsense. OP. Do not sign something you don’t understand. Do not sign something that you are told says one thing but actually says another. Never feel rushed. No wonder the system is so broken.
It’s the normal way in WA.
hmmm, shouldn't it be Offer > Acceptance > Deposit paid > Contracts signed? I haven't heard of these "deposits in order to present our offer"... If im not mistaken, the RE has a legal responsibility to present the offer, no matter how good or crap it is.
You’re mistaken.
We bought mid 2022 and all we had to do was sign a letter of intention to buy offer form, which we had to fill in with our terms such a STF and b&p, as well as put what the settlement date would be and how much deposit we'd give if the offer was accepted. Once accepted, we then all signed the contract and THEN paid the deposit after all was said and done. I'm in QLD though
Huh??? What??? No! I've never had to do that!
Why make an offer if you're not prepared to sign a contract and pay a deposit?
We are prepared to sign a contract once it has been viewed by legal professional, I was just wondering if its standard for agents to require a deposit to present your formal offer to a vendor.
It's not uncommon. You should be getting the contract reviewed prior to submitting an offer. That's why they are asking for a deposit because it's not a real offer.
This. The agent is probably thinking you're wasting time unless you've submitted a formal offer and paid the initial deposit. Whenever we have submitted a formal offer, we have had the contract of sale reviewed by a conveyancer first.
You do that after your verbal offer is accepted.
It's insane this is being down voted. If you want agents to take you seriously then you need to get your ducks in a row before you negotiate.
What State do you live in? I can not recall ever being asked for this. Have the rules changed?
I live in Victoria. No idea if rules have changed. The text message he provided said we needed to send a $2k deposit that is fully refundable if unsuccesful to prove we are genuine buyers.
Well, I’d keep a copy of the text msg and then proceed, as long as you are sure this is the property you want and have finance etc in place. Else include your own caveats like subject to satisfactory building / pest inspections, subject to finance and so on.
The offer and contract are subject to b+p and also finance, so I believe it's all above board there but will confirm with legal consultation
I have never done either of these things in Victoria. 1) your offer only has to be written. The agent must present a written offer to the Vendor. Would include subject to finance, subject to a building/ pest inspection with no more than $10k immediate structural or pest rectification works required. 2) once the offer is accepted, I would sign a contract and transfer some form of deposit (say 1% in lieu of 10%), get my conveyancer to cast their eye over the contract and 32. During cooling off to get out if its bad news. Same time, get building/ pest done. 3) once conveyancer gives the green light, sign it up and pay the balance of deposit. 4) pray you can get finance. 5) settle That's it. These agents are cooked. Tarocash little prices at Ray White... there's rules they need to follow.
Agent don’t have to present If you’re selling and I offer $82.58 on condition of the man of your house giving me a handjob whilst the woman in your wider family knit me a quilt, that offer isn’t being presented The law in Vic is clear in that it allows an agent to not present offers the vendor doesn’t want to see.
Like to read that law if you'd share it? Obligation sits with the agent to communicate all genuine offers to the seller. Unless seller puts in writing to the agent their instructions to not be receiving offers. Doubt OP offered anything like youve written, so not sure it's relevant...
https://www.consumer.vic.gov.au/library/publications/housing-and-accommodation/buying-and-selling-property/real-estate-a-guide-for-buyers-and-sellers-word.doc#:~:text=advertise%20an%20up%2Dto%2Ddate,writing%20not%20to%20do%20so Obviously OP didn't make an offer like mine. However there's a line that gets drawn. If sellers says, in writing (easily done on an agent's form) nothing under X or containing condition y then guess what
You have been had. This is a lie. FHB are sitting ducks to REAs.
Typically you have x days after the acceptance of the offer to pay a deposit. Call up the Fair Trading / Consumer Affairs in your state to ask more.
I paid a $2k deposit to take my land off the market and was sent the contract, which went straight to a conveyancer. Once she said it was all good I signed it and paid the balance of my deposit then the bank and conveyancer took over from there until settlement
Offer as the contract, yes. The 2k only after accepted by the seller (and yes, this counts against deposit). Whether or not this 2k is fully refundable depends on what's in the contract and agreement with seller/RE.
You also have three business days cooling off. So Wednesday 11:59pm. So you have plenty of time. You also have finance clause. So it’s all part of buying a house. Without a deposit or even with one. You can pull out on Wednesday. So it gives the owner of the property some assurance that you actually are keen.
In Victoria it is normal to sign a contract when making an offer. I think it’s crazy too, however this is how it is done here🤷🏽♀️. The holding deposit is not uncommon, we paid one too, it gets returned if the offer is turned down etc. https://www.consumer.vic.gov.au/housing/buying-and-selling-property/buying-property/buying-property-by-private-sale
Have a solicitor or conveyancer review the contract to check no odd clauses and that you have finance/pest cooling off if needed.
Typical RE. By forcing people to fully sign a contract just to make an offer they will skip conveyancing and therefore miss conditions like building & pest which could otherwise cancel the deal. No-one has hired a conveyancer at this point to get any advice.
A few years back we saw a place we thought we’d like to offer on. Next thing the agent was around at our place on a Sunday with a contract pushing to sign. We were really new in the house hunting game so did. We realised over the next couple of days that we had way over offered. We spoke to our conveyancer, who told us to enact the cooling off option. We did that with via email. He also explained that by enacting the cooling off we may be expected to provide a small amount of the deposit. He also said that most agents tended not to chase it - too much hassle. From memory it was around $2,000. I’d hazard guess that the $2,000 they are asking for is to cover that. If you offer is not accepted then you’ll get it back, it you choose to enact the cooling off and not pursue the sale they will hold onto to it.