So I'm looking at purchasing a property and we have put a verbal offer on a house.
Only thing is (this is the first time I've experienced this) the seller has asked the real estate agent to take a "lock-in" fee of $500 plus plus our offer in writing when we place our offer. Reason being that they only want serious offers, and to prevent being stuffed around by people who make an offer only to then offer even less when the seller accepts the original offer. If the seller rejects the offer, we get our $500 back, BUT if we change our mind, we don't and the agent keeps the cash.
Is this normal? Is this something that happens often?
We are going to look at the house again in a few days to check that it has everything we want (flyscreen, working electricals, etc) because we are considering putting in the lock-in fee. And then of course, having everything we want in the contract, to make sure the house is fully equipped and there are no problems. Thoughts?
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10-03-2016 14:20 #1
Property "lock-in" fee
10-03-2016 14:48 #2
Seems a little odd to me. In NSW, you pay a fee of 0.25% of the purchase price when you come to an agreement on price with the vendor and sign the contract. Then you've got a cooling off period (5-10 business days) to do your building & pest inspections, after which time the contract becomes binding and you have to pay the 10% deposit. If you pull out during cooling off you lose the 0.25%.
I'd ask a local agent about it, unless it's part of the formal process I can't see how they can arbitrarily decide to create a lock-in fee that's non-refundable!
10-03-2016 15:18 #3
This is not something that I have ever heard of before. We have made verbal offers to purchase, and the agent draws the contract with our offer on the contract. The seller can cross the price out and put a higher price, then we can agree or not agree. If we do not agree to the higher price, the contract is thrown out. I have never been charged a "lock-in fee". or even a fee for drawing up the contract. ??? very strange . marie.
10-03-2016 15:38 #4
It's only non-refundable if we change our mind, but it just seems so odd to me. I've never heard of this happening and am very reluctant to give them the cash when there isn't even a contract written up yet.
The seller even took a while to get his section 32...but still had an open inspection 2 weeks ago even though his paperwork wasn't organised and he wasn't really taking any offers on board as much as he should have because of this. I feel stuck because it's a great property and the price is pretty reasonable. But something doesn't feel right.
10-03-2016 15:44 #5
We were required to put $1000 deposit on our farm, similar sort of thing I think. We were happy to pay as it was definitely the one we wanted and was the only one we had an offer on at that time. The estate agent held it in the trust account and it went towards our 10% deposit once the sale went through.
10-03-2016 15:48 #6Member
- Join Date
- Jul 2012
I'm pretty sure there was something similar when I bought a house with my ex back in about 2008, in Melbourne. Not sure of the exact terms, but I think by making an offer we waived our cooling off period. We did have conditions on the sale like pest and building reports, and pending finance approval
10-03-2016 15:55 #7
Not sure which state you are in but in NSW you pay .25% of the purchase price to secure the property and you get a 5 day cooling off period - you can change your mind but you will lose the .25% - a holding deposit was something agents did here decades ago which legally they can't keep if you change your mind it was more a show of good faith and it legally meant nothing ( which is why the cooling off law came in) all our offers have to be in writing with the signed contract - this way the owners know they are all serious ( or obviously with auction there are no cooling off periods and you pay 10% immediately )
10-03-2016 16:16 #8Senior Member
- Join Date
- Sep 2012
10-03-2016 16:34 #9
Are they meaning a deposit? We pay as little as possible $500-$1000. We're in qld
10-03-2016 17:38 #10
No, not a deposit. More of a guarantee of your offer. If the seller rejects it you get the money back.
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