House Sale: Estate Agent Returns Booking Deposit to Developer who pulled out of deal

fuzzy dunlop

I have been given the responsibility of selling the family home following a bereavement and have acquired the services of a well established estate agent.

A developer/investor agreed to but the house in October and put down a booking deposit of 5000 Euro.

For two months they dragged their heels and suddenly pulled out of the deal in December.

What I found strange was that the estate agent said that they had to return the booking deposit because they were obliged to do so legally.

This may be the case but it is at odds with my understanding of a deposit.

I would appreciate if anybody can confirm if this is actually the case?

Gumbo

Completely normal.

Booking deposit is 100% refundable until contracts are signed.

Former Former Former

The EA is absolutely correct I'm afraid.

The "booking deposit" isn't binding on either the seller or the buyer, it's just a signal that the buyer isn't a complete time-waster. The buyer can indeed pull out at any point without penalty until the contracts are signed and exchanged.

fuzzy dunlop

Thanks guys

Sounds ridiculous but I am not in the least bit surprised. Unless there is something I am missing.

Thanks for your comments

fuzzy dunlop

Slightly off topic;

I have noticed a few comments on various threads that do not speak well of Estate Agents in general.

What I have noticed is that there seems to be a lot of 'middle sons' in the business. If you understand the euphemism.

Claw Hammer

Agents are obliged under the IPAV rules to accept booking deposits "subject to contract". If that happens the deposit is refundable until there is a contract signed by both parties. The booking deposit has two reasons. To secure the agents fees at the end of the sale and to reduce the incidence of messers starting off deals and walking away later. there are always messers and agents are supposed to advise you when deciding to accept a bid what the liklelihood of completion is with the putative purchaser.

walterking

https://www.boards.ie/discussion/comment/120154314#Comment_120154314

Think of it another way.

You put 10k booking deposit on a new house. Suddenly something happens before you sign contracts and the house no longer suits you.

Is it fair that you lose €10k?

This is why "sale agreed" does not mean sold and another bidder can still come in and an agent has to provide you with the information and you can still tell an original buyer to take a hike.

Usually contracts are signed in 4-6 weeks and a larger non refundable deposit is paid.

But a booking deposit is simply a goodwill deposit.

walterking

https://www.boards.ie/discussion/comment/120154319#Comment_120154319

Funny that with fairly tight regulation and the ease of making a complaint and that agents must have every bid in writing and get further information on the bidder, that extremely few complaints are actually made.

Everyone who loses out to another bidder wants to blame someone else and the agents is usually the punch bag. People seem to forget the the "selling agent" is working on behalf of the seller who is paying them and takes instruction from the seller and has no obligation other than normal replies, to the bidders.

And then every house sale has the price paid published on Property Price register.

So if that bullsh1t was true, wouldn't you think people would look at the property price register (based on figures given by solicitors to revenue) and if their suspicions had a ring of truth that they would be running to make a complaint? But they're not, because its hot air.

Gumbo

https://www.boards.ie/discussion/comment/120154314#Comment_120154314

Not really.

I can give Tesla €250 deposit for a car. They will ship it from china to here. When it gets here I can cancel and say I don’t want it and get my €250 back.

Thankfully the law is on the right side here.

Dav010

https://www.boards.ie/discussion/comment/120156298#Comment_120156298

I’m not sure you are right about that.

Tesla may agree to refund you your deposit, but that is a courtesy, not a legal requirement under consumer law. As a car is customised by the buyer, if ordered online, distance selling entitlements may not apply. Your deposit is part payment and a change of mind is not legally entitled to a refund.

Purchasing a house on the other hand is not covered by consumer law as you have the benefit of your own legal representation when buying, and you are entitled to a refund as the sale contract is not formed until signed by both buyer and seller. So different rights in relation to refund of deposit.

Gumbo

https://www.boards.ie/discussion/comment/120157993#Comment_120157993

Required by law under the distance selling rules.

You enter into the agreement online.

Dav010

https://www.boards.ie/discussion/comment/120158000#Comment_120158000

Personalised or custom made items are excluded from Distance Selling cooling off periods. Tesla’s agreement to refund you your deposit is their choice to offer you, it is not a legal requirement.

Also, distance selling regulations apply to orders from sellers in the EU, I don’t know if that applies to Tesla, would they not be US based?

Gumbo

https://www.boards.ie/discussion/comment/120158081#Comment_120158081

Your buying from Tesla Ireland.

Their European HQ is in Holland. Their banking system is Ireland.

it’s written into the T&C’s.

Dav010

https://www.boards.ie/discussion/comment/120158153#Comment_120158153

Shiit, sorry, does apply to orders with combination of stock items, my mistake, thought car options were personalised items. You are right, I’m wrong. Apologies.

Gumbo

https://www.boards.ie/discussion/comment/120158235#Comment_120158235

No apologies needed. I’ve been wrong before and no doubt will be wrong again 🤣🤣

eusap

To remove the dragging their heels brigade, people selling houses need to be ready to sell, have your Solicitor draw up the contracts at same time of calling the estate agents. When Estate agent accepts booking deposit its on the condition the contracts are returned within 7 days or its back on the market.

We followed this strategy and it immediately got rid of the people hedging there bets, putting deposits on multiple property's and dragging there heels, house sale completed in 5 weeks

Former Former Former

https://www.boards.ie/discussion/comment/120159747#Comment_120159747

From personal experience, it is the vendors dragging their heels just as often as the buyers.

And 7 days to arrange a survey, a valuation, have your solicitor review all the documents, resolve any queries (and there are ALWAYS queries) and sign the contract? That's not realistic.

You could add such a clause but making it work in the real world is a different question.

eusap

You can always make it part of the contract, subject to survey most contracts are subject to mortgage anyways so the valuation part is not so big. The Key part is you are asking the buyer to commit more than a booking deposit

https://www.boards.ie/discussion/comment/120172302#Comment_120172302