Q. I have had an offer accepted on a property but the agent has informed me that the seller is looking for a non-refundable deposit of £25,000 in return for an exclusivity period. Apparently he has had a buyer pull out the day before exchange so he is keen to ensure this time things actually progress to exchange without exposing himself to the same risk again. I understand where he is coming from but concerned that I am risking a substantial amount of money if I don’t complete by the deadline. What do you advice?
A. Sellers that have had their fingers burned with a buyer pulling out that close to the deal becoming legally binding are naturally super sensitive when it comes to proceeding with a new buyer. I have had to deal with this scenario many times in the past and in a market such as ours now it’s certainly a trend that sellers are keen to use to lock a buyer in .If you are 100% sure this is the property for you and as long as the exclusivity period is long enough to enable your solicitor to comfortably get to exchange – taking into consideration that they are heavily reliant on third parties such as lenders and managing agents providing answers to their enquiries to progress with the purchase then in theory its worth considering. However I would strongly advise you to speak to your solicitor to discuss this further. Some solicitors are just not comfortable with their clients handing over a substantial non-refundable deposit as it exposes them to too many risks. However if they are receptive and they can work through a mutual agreement with the sellers solicitor it may still be possible to reach an agreement that both sides feel confident enough to proceed with. Obviously there is a risk associated with such a proposal but calculated risks are sometimes worth taking if this property is the ‘one’. It may also be possible to ask the seller to revisit the amount of deposit, maybe reducing it down to a more comfortable level that both of you can work with. If you don’t feel you have so much to risk if things did go drastically wrong and the seller feels that he has at least his expenses covered in the event that it doesn’t complete a second time then it’s definitely worth challenging him on that as if you are both keen with the same intentions then flexibility could be the answer to put something together that is agreeable to both parties. Buying in the current market certainly has its challenges but taking sound legal advice is the best solution to avoid over exposing yourself to a situation that may prove to be not quite as transparent as you first thought. Looking beneath the layers of the original terms is paramount to ensure you are clear on the situation from the outset.