1451 replies to this topic

[Matt R.]

^^
Two business days after subject removal, or was it one. Anyways, after subject removal and the point of no return...

When we bought our townhouse and were stretched to our limit, as we were working through the process, the realtor asks what we’d like to put down for a deposit and that at least 5% was customary... we **** bricks! They don’t teach you this stuff in school!

Matt.

[tjv]

If your offer is accepted with your conditions, the home can’t be sold to anyone else until your offer expires.

So at the latest your offer is accepted and before your inspector, etc even unloads a ladder time to hand over the deposit

Meanwhile I would still continue to sell the house and show it, but tell people there is a pending offer, but if it falls thru like they can't get financing...

https://www.recbc.ca...2.html#Deposits

From above site:

Usually, you will make a deposit with your offer to purchase or after your offer is accepted. That deposit is usually held in your brokerage’s trust account. The brokerage holds the deposit for the benefit of the transaction, not just for your benefit. Note: If your contract contains subject clauses in your favour and you do not remove those clauses, you will not automatically get your deposit back. Both you and the seller will have to sign a separate release form. If the seller will not sign the release, you will have to obtain legal advice, as your brokerage cannot release the deposit unless you and the seller have agreed to do so.

Unless the contract specifically states that any interest earned on a deposit will be payable to either the seller or the buyer, interest is payable to the Real Estate Foundation of BC.

If a deposit is to be held by someone other than a real estate brokerage, you should obtain independent legal advice to ensure there is no concern about either how the deposit is to be held or the terms upon which it may be released.

[Mike K.]

Yes, you absolutely can continue to show the home and are encouraged to do so. Meanwhile the buyer will be arranging for inspections and due diligence throughout the period you’ve mutually agreed upon prior to the offer collapsing.

The offer might not go through because your septic tank is cracked and your well sucks. It’s not all contingent on the buyer having their ducks in a row. You as the homeowner might find out some really bad news when the buyer conducts inspections and assesses your home, so it’s not necessarily contingent on the buyer securing financing. The buyer isn’t even obligated to tell you about hidden nightmares uncovered by the inspector as they paid for it and decide whether to share it with you or subsequent potential buyers (should they walk away after the inspection).

[Nparker]

Any chance this thread is going to move back to discussions of the local RENTAL market and away from discussions on the do's and don'ts of property purchasing?

[DavidL]

I've always had to fork over a certified cheque when making an offer on a house.  How else are they going to take you seriously and show you are prepared to put your money where your mouth is.  I know if I was selling my house today and someone made an offer with no deposit, they can easily walk away with no downfall so I wouldn't take them seriously

 

I thought that a deposit was standard, maybe Marko can weigh in

 

As for landlords, that is what I seem to recall, but its been awhile since I made an application to rent.  In this rental market where there are probably 10 applications for ever rental, landlords have the upper hand and I am sure are picking the best applicants.  I definitely don't like the conditions the government is putting on landlords, I guess the government doesn't want fresh rentals to come onto the market anytime soon!

 

 

Then you've been bamboozled and should seek alternative representation when putting together future offers.

 

But maybe you're confusing putting together an offer and lifting conditions? When your conditions are lifted, at that point you provide a deposit. But what's the benefit to you to do so when making an offer? The seller either accepts it or rejects it.

 

 

The deposit is standard (it's not actually not legally required, but is standard practice for a 5% or greater deposit). The timing of when it is given is where you're wrong - the offer has to be accepted before you need to give the deposit - the exact timing should be included in the contract, standard is 24 hours.

However, per the below link, it should be given as soon as the offer is accepted, not necessarily before the subjects are removed.

 

https://www.recbc.ca.../psm/deposits/ 

 

 

I think you meant to say that withholding the deposit prior to lifting conditions is not necessarily the case for some?

 

 

Ah fair enough, I always made my offers no subject to's.  I remember giving the certified cheque within 24 hours of my offer thou

 

Edit:  I'm also remembering a time when I went to make an offer on a foreclosure in court and I had to have the deposit certified cheque with me when I was in court that day.  Relatives of the owner paid off the balance the night before court so it didn't go ahead, but I had my certified cheque all ready

 

 

Foreclosures are a completely different process and have different rules.

 

And a trust account doesn't factor into the equation if you've already provided someone a cheque.

 

But it sounds like you've been making unconditional offers, which is completely opposite to an offer with conditions. If the former is all you've done then you would be providing a certified cheque immediately, but unconditional offers is not a standard practice.

 

 

-buyer makes offer. the offer states what the deposit amount will be.

-if seller does not accept the offer, no deposit changes hands / deposit cheque doesn't need to exist

-if seller accepts the offer (regardless of whether there are conditions), the deposit is given in trust (to seller's representative- realtor or lawyer)

-if the conditions aren't lifted and the deals falls thru, the buyer gets the deposit back

-if the sale closes, the deposit is applied to the purchase

 

so yes, you include mention of a deposit when you make an offer, and you get a certified cheque made, but you only give it to the seller's representative when the offer is accepted (and it isn't cashed at this time). it only get's cashed if/when the sale completes.

 

 

but what happens if the house inspector gives it a good bill of health and you work to remove the other conditions.  Meanwhile the house owner continues it for sale and when you are ready to close you are told its sold.  If I was the seller I am not holding anything until I see cash because you could walk away if you find a scratch in the floor.  In my mind no deposit = not serious

 

Obviously you would only give the deposit into a legal trust account and not some stranger

 

 

That’s simply an accepted offer with conditions. A deposit to secure an accepted offer is normal. A deposit along with an offer is not.

 

Deposits can be taken with an offer that is conditional or unconditional.  Deposits can be upon acceptance or upon subject removal.  Deposits, like all other terms in a contract, are negotiable.  All deposits are delivered into trust accounts where they can only be accessed to complete a sale, or disposed of so long as both buyers and sellers agree upon the disposition of the deposit if not for the purchase.  If there is no purchase moving forward and buyer and seller do not agree to the disposition of the deposit then it is paid into court and the parties fight about it there.

 

There are accepted practices regarding deposits in different areas of the province.  Some areas it is still common to attach a deposit with an offer.  In other areas it is more common to see a deposit upon subject removal.  The reason for the shift to deposits upon subject removal is that if a seller is upset that a buyer doesn't remove conditions and refuses to release the buyers deposit then the buyer has to go to court to get it, or can cause a delay in returning the buyer their deposit funds which disadvantages them in a swift moving market.  As the deposit is held, in almost all cases, as a stakeholder in a trust account, once again, both the buyer and seller must agree in writing to its disposition. 

 

In Victoria deposits upon subject removal is the common practice, with the exception of unconditional offers in which case deposit upon acceptance or within a short window upon acceptance is the practice.  Offers made in court must be unconditional, consequentially they must be accompanied with a deposit when presented to the court.

 

So you're all wrong and you're all right, it's about how the contract is written and what your preference is, now stop pretending to be Realtors and go back to talking about rentals.

[Mike K.]

Right, so to cut this all down for the Victoria buyer:

 

- you provide a deposit once your conditions are lifted.

 

Glad a realtor was able to clear up the last few pages.

[sdwright.vic]

^some of us already knew that though.

[James Bay walker]

Bank drafts are much better than 'certified cheques'. The purchaser of a certified cheque can go back to their institution and cancel it / put a stop payment on it, just like cancelling / stopping payment on their own personal cheque, but they cannot stop a bank draft from going through. With most realty agencies, a certified cheque needs to be made out to the Ltd. company brokerage involved (so, you don't have the option of avoiding someone cancelling it by cashing it, as it does not even have the potential of being cashable at the issuing bank, if the issuing bank still cashes cheques). jbw

[James Bay walker]

 

I am not payimg anyone a deposit with my application until my application is approved. I mean the landlord could just keep showing the place over and over and not approve my application because they think they found someone better. Taking applications and deposits all day long till they decide which one they want.

I am not tying up my money on something that's not a guarentee for me, you want my deposit and first months rent, show me the lease, sign it, and you'll get both.

If I have to live in the up in the air world of maybe not getting a place, then guess what, till I get an offer I will still be shopping.

  There's a time limit for rent applications / holding the deposit (I never put more than five business days down for holding a tenant's deposit. Typically I can give the tenant verbal approval (pending 3rd party approval) within 24-48 hrs, else their deposit's refundable. ((nothing like 1.5 times rent, usually on the order of $200, balance of first month's rent due upon application acceptance in writing)). If that's too onerous for an applicant, well they're not seen as serious (by me).

[sdwright.vic]

Trust me there are more places to rent that require an application deposit...

[tjv]

Bank drafts are much better than 'certified cheques'. The purchaser of a certified cheque can go back to their institution and cancel it / put a stop payment on it, just like cancelling / stopping payment on their own personal cheque, but they cannot stop a bank draft from going through. With most realty agencies, a certified cheque needs to be made out to the Ltd. company brokerage involved (so, you don't have the option of avoiding someone cancelling it by cashing it, as it does not even have the potential of being cashable at the issuing bank, if the issuing bank still cashes cheques). jbw

I heard the same thing thru a friend, but every time I have gone to the bank to get a certified cheque or bank draft I was always told they are the same thing.  Personally I would much rather take an e-transfer and see the money is in my account instantly.

[MarkoJ]

^good luck ever buying a house then.  When you make an offer you have to include a certified cheque for the non refundable deposit

 

The vast majority of the time you don't need a certified cheque when making an offer.

[tjv]

yes thanks, I think we established that after I posted that.  For me though if someone was buying my house no deposit with offer means my house remains advertised for sale and someone could buy it right from under them and the contract would state that.  As the old saying goes money talks and BS walks

[James Bay walker]

 

The vast majority of the time you don't need a certified cheque when making an offer.

Yes, indeed! (though of course cash works best of all imo) Lots of fun for buyers.

The current lack of any deposit accompanying (or to follow upon acceptance) most offers flying around these days has REALLY, REALLY put me off using real estate agents (for several years). The agents show up with their 'puff of air' (not even a deposit upon acceptance being promised) sort of offers, which turn out to have a likelihood of follow through proportionate to the non-existent level of the buyer's financial commitment. Instead of two or three offers per listing period, I find you're more apt to contend with five or ten times that many (it's really hard for a buyer to maintain focus, interest and follow through on tackling subject to removals with no financial commitment worthy of the name).

Sigh! I do miss the old days (where salespeople made an effort to line up earnest money deposits, and drove around fetching live signatures on actual documents instead of emailing left right and center, while even letting buyer 'clients' whip up their own offers unattended). jbw

Edited by James Bay walker, 27 December 2018 - 02:40 PM.

[Mike K.]

Just a reminder that this is the “rental” thread.

[Rob Randall]

Seattle apartment glut:

 

https://www.seattlet...s-are-dropping/

 

Seattle is building more apartments than just about anywhere, and now 1 in 10 units across the city are sitting empty. Landlords have responded by lowering rents slightly and offering more perks to get tenants in the door.

 

Average asking rents across all unit types are now $1,924 in Seattle and $1,954 on the Eastside. Rents are at $1,502 in Snohomish County and $1,448 in South King County.

Regionwide, even with the recent decrease, the average rent has soared from $1,034 in 2010 to $1,725 now. The extra $691 a month in rent amounts to about $8,300 in extra costs over the course of a year compared with the start of the decade.

 

[jonny]

Wait, are you telling us that this supply/demand thing is real and not just some vast right-wing neo-con conspiracy to keep the one percenters rich and in control of the illuminati? Weird. 

[Rob Randall]

 That $1924 USD all-unit type average Seattle rent equates to $2578 CDN.

[jonny]

 That $1924 USD all-unit type average Seattle rent equates to $2578 CDN.

 

Cheap if you're making $300k at Amazon. 

[jonny]

I guess my point is we have failed as a badly broken region of 13 municipalities and 130 different agendas when we consistently have a vacancy rate of 1% [or whatever it is]. 

 

What we have recently heard is prominent councilors blame the evil capitalists when all our cities and the province do is make it harder and harder to:

A. Bring new rental stock online

B. Be a landlord

 

if we truly want prices to go down organically, we need a massive boom in new apartment buildings. I have yet to see a single action to achieve this.