Ask a Realtor anything

[davepratt]

Re: Ask a Realtor anything

if the buyer walks away from the deal, the seller gets the deposit, but what does the seller's RE Agent get out of it ?
txs and cheers !

Actually that's not what happens. The only way a deposit can be kept by the seller is by a judges order or by written mutual consent. If a firm deal blows up, in virtually every case, the buyer and seller sign a mutual release and the deposit is returned to the buyer and the Realtor gets nothing. Even though the buyer has signed a binding agreement, the seller usually releases them because they don't want to spend years in court and during that time, they can't sell their house to anyone else.

[Shankapotamus86]

Re: Ask a Realtor anything

Further to the question of Deposits. Does the deposit go as payment for part of the commission to one of the agents? Does it cover something else?

I remember when we bought our house several years ago, our agent basically said "If you can do a deposit of $10,000 it shows you're serious." We didn't care, so we did it... now I'm wondering what the purpose of it is?

[davepratt]

Re: Ask a Realtor anything

Further to the question of Deposits. Does the deposit go as payment for part of the commission to one of the agents? Does it cover something else?

I remember when we bought our house several years ago, our agent basically said "If you can do a deposit of $10,000 it shows you're serious." We didn't care, so we did it... now I'm wondering what the purpose of it is?

It just gets mixed in with any other down payment on the house and not specifically for the agent. It can show good faith but due to the reason I posted above, it be $1 or $1,000,000.

[veryold]

Re: Ask a Realtor anything

The only way a deposit can be kept by the seller is by a judges order or by written mutual consent.

thanks, but now i am confused/freaked , IOW, what is the purpose of a deposit if it can be revoked ?

[sellis]

Re: Ask a Realtor anything

Actually that's not what happens. The only way a deposit can be kept by the seller is by a judges order or by written mutual consent. If a firm deal blows up, in virtually every case, the buyer and seller sign a mutual release and the deposit is returned to the buyer and the Realtor gets nothing. Even though the buyer has signed a binding agreement, the seller usually releases them because they don't want to spend years in court and during that time, they can't sell their house to anyone else.

Is there a way to write the deal where this deposit is clearly kept by the seller if the buyer walks away? Is that something that can be done? It doesn't seem right that someone can commit to buying a house and walk away with no penalty.

[guitarman]

Re: Ask a Realtor anything

I'm in the process of planning for retirement and would like to start positioning my self for that now. Retirement for me is probably about 8 years.
What I'd like to do now is to sell my current home which has a lot of equity, and buy a condo. I'd be able to pay off the mortgage and other debts and be debt free. This way for the next 8 years I could be working on putting away more for retirement.
What keeps me from getting rid of the family home now is that my daughter and grand daughter with me for the next 2 to 3 years, while my daughter goes to college.
I've been tossing the idea of looking now for the condo I'd like to retire to and if I find something use some of my home equity to purchase it and rent it out for the next 2 or 3 years until I'm ready to sell my home.
I'm just wondering if a realtor here can tell me if this is a wise way to go. Are there any reasons that make this strategy a bad way to go?

[davepratt]

Re: Ask a Realtor anything

thanks, but now i am confused/freaked , IOW, what is the purpose of a deposit if it can be revoked ?

The percentage of firm deals that blow up is very small so I wouldn't sweat it.

[davepratt]

Re: Ask a Realtor anything

Is there a way to write the deal where this deposit is clearly kept by the seller if the buyer walks away? Is that something that can be done? It doesn't seem right that someone can commit to buying a house and walk away with no penalty.

Probably but I've only done it once and the lawyers handled the legalize.

[veryold]

Re: Ask a Realtor anything

The percentage of firm deals that blow up is very small so I wouldn't sweat it.

hey, thanks
ok, "freak" part is out, but i am still curious from the legal side, the answer to my question ?
cheers !

[davepratt]

Re: Ask a Realtor anything

I'm in the process of planning for retirement and would like to start positioning my self for that now. Retirement for me is probably about 8 years.
What I'd like to do now is to sell my current home which has a lot of equity, and buy a condo. I'd be able to pay off the mortgage and other debts and be debt free. This way for the next 8 years I could be working on putting away more for retirement.
What keeps me from getting rid of the family home now is that my daughter and grand daughter with me for the next 2 to 3 years, while my daughter goes to college.
I've been tossing the idea of looking now for the condo I'd like to retire to and if I find something use some of my home equity to purchase it and rent it out for the next 2 or 3 years until I'm ready to sell my home.
I'm just wondering if a realtor here can tell me if this is a wise way to go. Are there any reasons that make this strategy a bad way to go?

I don't think there's a cookie cutter answer to this one. I would think a financial planner as opposed to a Realtor is the right person to seek advice from.

[davepratt]

Re: Ask a Realtor anything

hey, thanks
ok, "freak" part is out, but i am still curious from the legal side, the answer to my question ?
cheers !

Frankly the deposit is quite meaningless in the grand scheme of things.

[Ignatius Reilly]

Re: Ask a Realtor anything

Frankly the deposit is quite meaningless in the grand scheme of things.

I think it narrows and legitimizes potential buyers - or to look at it the other way, weeds out the tire-kickers.

I don't think many people realize it's that easy to back out of a deposit. I didn't....

[TJames]

Re: Ask a Realtor anything

Sorry didnt cruise all 5 pages so hope this wasnt asked.

Do you anticipate the market will slow down or reverse?

Do you think now is a good or bad time to buy/sell. Given homes are considerably more expensive than 5 years ago, it seems like if you sell your house for considerably more than you paid, you dont actually profit because you have to spend more than you did 5 years ago regardless of where you move in the GTA.

Are there areas in the GTA that are not seeing ridiculous price increase. Or do you need to leave the GTA quite substantially, like Barrie or Bowmanville.

[davepratt]

Re: Ask a Realtor anything

Sorry didnt cruise all 5 pages so hope this wasnt asked.

Do you anticipate the market will slow down or reverse?

Do you think now is a good or bad time to buy/sell. Given homes are considerably more expensive than 5 years ago, it seems like if you sell your house for considerably more than you paid, you dont actually profit because you have to spend more than you did 5 years ago regardless of where you move in the GTA.

Are there areas in the GTA that are not seeing ridiculous price increase. Or do you need to leave the GTA quite substantially, like Barrie or Bowmanville.

Despite what the experts have been telling us for over 10 years, the truth is nobody knows. Do I think there will be a minor correction at some point. Yes but I have no idea when. Areas outside the GTA are also hot but you do get more house for the money.

[davepratt]

Re: Ask a Realtor anything

I don't think many people realize it's that easy to back out of a deposit. I didn't....

You're right. The biggest hurdle is that the deposits are generally held in Broker's trust accounts and the rules governing them are extremely strict.