'Commitment Deposit'?

[TheFantasticFixit]

Has anyone had any experience of this?

We've seen a property that we really like, in a great area. Its fairly old - built around early 1900s. However, the agent revealed last night at a viewing that the current vendor is a property developer after the previous owner part exchanged the house for anew build. It's currently vacant and apparently the developer are very keen to accept offers, so we could get a good deal on it. But! They want a 'commitment deposit' upon acceptance of the offer of £500. Apparently this is because it is eligible for help to buy but that sounds like tosh - it sounds to me just a way of securing a buyer but that might be because the property has issues that will come up in the survey.

Does anyone know about this, or had any experience of this kind of 'bond'?

Developers do this a lot with new builds, so maybe he is going with his normal practice. With an older building I would be much more cautious, as with a new build the contract will specify build guarantees etc. You would need to check in what circs the deposit was returnable in the contract.

Is the seller above 60? This is a practise that I believe was more common in the 70s and 80s to make sure everyone is 'on side' and no-one is wasting anyone's time, and is 'invested' in the process. If it was a house I wanted I wouldn't have an issue personally...

Ah thanks both. No, it's not a pensioner, it's a property developer so I think that V is right and it is their normal practise. As long as its not a scam to cover up potential issues that's fine. We've got someone going in to check for damp/ woodworm which will give us an idea of wha might appear on a survey as well

Well it would make me think twice. I mean, you pay for a survey, which is a statement of commitment, albeit one they don't stand to benefit from. But like vanitas, I'd want to know in what circumstances I could get my money back. I mean, if it turns out to be rotting from roof to foundations, or if there's something dodgy in the deeds, have you just paid £500 to the vendor (on top of survey costs) for the privilege of finding that out?

What financial commitment are they making to you?

Who will be holding the money?

They could still just decide to sell to someone else and they could just spend your money and not give it back.

What financial commitment are they making to you?

Who will be holding the money?

They could still just decide to sell to someone else and they could just spend your money and not give it back.

I think it is fair enough to ask for a commitment from the buyer but, as others have said, there needs to be some rules attached: what happens if you discover a shitload of work at a survey? What if the seller gets a higher offer? What if your mortgage is withdrawn? What if you can't complete in some timeframe the seller lays down?