No Cooling off Periods and Deposits - WA
 

OK, so my wife and I are looking to buy a place in Perth and in the areas we are looking the market is actually quite hot (so much for being in a downturn). The last three places we have wanted have all been "Multiple Offer" situations..

Anyways, as I understand it, in Western Australia there is no cooling off period if using the standard real estate institute of WA (REIWA) offer and acceptance doc (what most agents use). We have finance pre-approved and do not need to sell our current property.

I also understand that the deposit, in the traditional sense is used to "demonstrate a commitment to purchase" and is placed in a trust with the estate agent. This money is then used to go towards the purchase in a successful offer.

The Question_______

If finance is pre-approved, the lender specified and there is no cooling off period, AND you submit a written offer using the standard REIWA O & A doc, the contract is pretty much binding if accepted? So why the need for a deposit?

The real estate agent is indicating that a substantial deposit may be required, like $50k...we can get the cash, its just that its invested and generating a reasonable return elsewhere..

Why do I feel like Im about to get a little manipulated??? :icon_scra:icon_twis

because as you said 'demonstrate a commitment to purchase' you can decide the deposit and all offers must be presented to the vendor.

$50k sounds excessive. Even if finance is pre-approved it will be subject to perfection of security and completion of any other documentary processes. The bank would have only confirmed affordability.

Bullshit radar has gone off the scales...
$50k is WAY to much a deposit.
The most ive ever put down as a deposit is $5k.
The fact that you don't need to sell a house to make the deal is worth more to the vendor than a big deposit.


using the Perth-WRX mobile app

[QUOTE=Zombee;832591]$50k is WAY to much a deposit.
The most ive ever put down as a deposit is $5k.[/QUOTE]

Agreed, $50k is way too much, we only put down $3k as this was a holding deposit and nothing else.
Our agent originally wanted as much as 5% of the purchase price and I told them where to shove it.

$50K is too much for a deposit
Pre-approval is not approval. In a nutshell, the lender will lend you X amount based on what you TOLD them you earn and have as equity. When it comes to actually lending you the money the bank then does all the checks to make sure you are not bullshitting.
Anything bought on finance is effectively a "cooling off" period, you could always arrange finance to fall through if you happen to change your mind....
That's why sellers prefer cash buyers...no finance ...front up the cash and straight to settlement.

also if finance falls through you get your deposit back...

Real Estate Agent is absolutely FOS.

They're always going to play the same tactics to force a quick sale/start racking that commission in.

Unless of course the property you're looking at is close to $5m?

Understand that per approval isn't approval. Isn't there some condition (1.1a part 2) about a buyer using all best endeavours in good faith to obtain finance approval..

I take this as "if you can't get finance, we will hook you up with dodgy Ron who can always get you some debt".

A $50k deposit would represent around 5%.

[QUOTE=207 de;832609]
I take this as "if you can't get finance, we will hook you up with dodgy Ron who can always get you some debt".[/QUOTE]
Specifying subject to finance from your financier will help avoid this. Can also help if you need to back out of the offer.