Booking Deposits

Doctor Benway

Hi,

I'm hoping to go viewing a few properties this weekend. Does anyone know what booking deposits generally come to these days? When I bought my current house (5 years ago), it was IRP1,000 on a IRP145,000 house. I assume it's gone up since then, though.

Are they usually a fixed price, or a percentage of the property? I'd be looking at something in the region of E500,000-E550,000.

Cheers.

A first time buyer of a new house in a development would usually not expect to pay more than 3k-5k. These are the people that banks are targetting in the new 100% mortgage scheme and may not have accessible funds for a booking or indeed contract deposit

For once off houses in rural areas, I do know of auctioneers who are tough enough to balk on issuing a sale agreement until they have received 10%, but in your case I would imagine in or about 10k should suffice and anything extra is a sign of an auctioneer getting in the way of a sale rather than facilitating it. But there are no hard and fast rules, it depends very much on the auctioneer. Remember, although he may dress it up as some tradition and that it gives them comfort to tell the Solicitor to go ahead and prepare contracts, what the auctioneer is really concerned about is to get enough to cover his fees and any outlays.

Either way, of course you should expect to pay over the full 10% (less any booking deposit paid) when contracts are signed by you.

Doctor Benway

Cheers for that.

And, uh-oh. I was hoping it wasn't going to be more than about 3. Time to flog a kidney, I think.

For a 550k house? The auctioneers fees will be about 5k-10k, so they will be looking for something near the latter, or a very good reason and a good undertaking from your Solicitor to get around it...

Doctor Benway

Yeah, when you put it that way, it makes (worrying) sense.

One quick point: when you say auctioneers fees, this also applies to houses for sale by private treaty (i.e. that the booking deposit for a house bought at auction would be the same as one for private treaty, as we'd be going for the latter)?

chuckles30

I just paid a 5k booking deposit on a house in a new development. The final price is 175k.

Doctor Benway

Doctor Benway wrote:

One quick point: when you say auctioneers fees, this also applies to houses for sale by private treaty (i.e. that the booking deposit for a house bought at auction would be the same as one for private treaty, as we'd be going for the latter)?

Yep. In fact, you need more for an auction - you'd need to be in a position to pay over the full 10% there and then at an auction as you are expected to sign contracts in the event of your bid being successful.

cltt97

I bid on a house and my bid was accepted. I would have had to pay 5K booking deposit but I changed my mind. When signing contracts, usually 10% of purchase price minus booking deposit applies, but it is negotiable, depends on what your vendor's solicitor agrees to. I've heard of cases where people paid as little as 2K or in the case of 100% mortgages sometimes the vendor agrees not to charge a fee at all in the light of full loan approval.

Victor

cltt97 wrote:

I bid on a house and my bid was accepted. I would have had to pay 5K booking deposit but I changed my mind.

I'm not sure if this was an auction, but be very careful of withdrawing at an auction after your bid has been accepted, as at that point the auctioneer can sign on your behalf.

Victor

Victor wrote:

I'm not sure if this was an auction, but be very careful of withdrawing at an auction after your bid has been accepted, as at that point the auctioneer can sign on your behalf.

True.

In fact, if someone acted in that manner and screwed over an auction, then at the very least he can expect very nasty Solicitors letters and to be made pay for the costs of the auction, legal fees for the day etc. In fact, if the Vendor felt that it affected the sale price ultimately received, he could possibly go further and sue for the difference too. Either way, lodging the highest bid at an auction and then trying to pull out is asking for an awful lot of very expensive trouble.

lomb

Deleted User wrote:

True.

In fact, if someone acted in that manner and screwed over an auction, then at the very least he can expect very nasty Solicitors letters and to be made pay for the costs of the auction, legal fees for the day etc. In fact, if the Vendor felt that it affected the sale price ultimately received, he could possibly go further and sue for the difference too. Either way, lodging the highest bid at an auction and then trying to pull out is asking for an awful lot of very expensive trouble.

very very doubtful. i spoke to an auctioneer, and he said hed never heard of it, but they could probably do nothing. remember no contract in land dealings means no sale and no liability cuts both ways and tough for the vendor/auctioneer etc:D would love to see it happen i have to say to see the looks on peoples faces would be priceless:D

lomb

lomb wrote:

remember no contract in land dealings means no sale and no liability cuts both ways and tough for the vendor/auctioneer etc

Tut tut. Tell your auctioneer he doesn't know his legals about auction law!!

Once property is on the market and someone makes the highest bid, and the property is knocked down to that person, as Victor pointed out the auctioneer has the authority to sign the contracts as agent for the Purchaser too, even if the Purchaser stalls. The reluctant Purchaser could then be sued for specific performance afterwards if he failed to produce the purchase price.

Yes it's a strange one, and I've never seen it happen or heard of it being done, but it is buried somewhere in the Conveyancing or Auctioneering legislation. As a matter of practice as opposed to as a matter of law, I couldn't see it being used, as why would you want to enforce a sale against someone who may not have the means to raise the purchase price, but they could expect to be pursued for the costs of the day anyway and all other losses. I mean, what Vendor is going to pay the Auctioneers and Solicitors a grand or two for the days work that had been messed around by someone acting the maggot?

lomb

Deleted User wrote:

as Victor pointed out the auctioneer has the authority to sign the contracts as agent for the Purchaser too, even if the Purchaser stalls. The reluctant Purchaser could then be sued for specific performance afterwards if he failed to produce the purchase price.

i dont think hed do that, if he did the 'purchaser' could counter sue for wasting his time and say he never put in any bid and the guy was crazy. i think it happens so rarely it would be let slide and the place reauctioned with no one charging any fees that day. hazard of the business:D

lomb

Deleted User wrote:

by someone acting the maggot?

and u dont think the vendor or auctioneer are maggots? many auctions are conducted with guide prices 15% or more BELOW reserve. ie they are guiding less than they are willing to sell for!

many houses are withdrawn before sale after potential purchasers have paid for surveys and solicitor fees.

many houses are sold so far past guide that potential purchasers were never in with a chance and the auctioneer knew it.

they are a bunch of fecking maggots themselves and if it happened i would be happy whether that sounds strange or not, its coming from a professional. they act in a very unprofessional and unethical manner and if i did that in my business id be struck off(dentist).bunch of unregulated unethical cowboys tbh..

Victor

lomb wrote:

they are a bunch of fecking maggots themselves and if it happened i would be happy whether that sounds strange or not, its coming from a professional. they act in a very unprofessional and unethical manner and if i did that in my business id be struck off(dentist).bunch of unregulated unethical cowboys tbh..

Be careful of confusing auctioneers with estates agents although there is an overlap.