Paying A Deposit Before A Survey Has Been Done

[paperplates]

We are interested in buying a second hand house. The owner told us that we'd have to pay 50,000 baht to the estate agent to take the house off the market while we approached banks. Apparently the estate agent will hold it and if it doesn't go through we'll get in back. From what I've read this is fairly standard practice. However, the owner has added a request that as soon as we get approval from the bank for a mortgage, but before they've actually sent a surveyor, he wants 5% deposit so that he can clear all the debts that he owes on the property before the transfer date. Am I right in thinking that this is completely ridiculous and that he shouldn't get any payment from us until the actual date and time of full transfer of ownership?

Am I also right in thinking that banks offer you a percentage of the appraisal price of a property and not of the actual selling price?

[GuestHouse]

The owner wants you to pay a deposit which s/he is going to use to pay of debts - Do you really need to ask?!

As for the estate agent, tell them to leave the house on the market while you get your finances together.

You have not yet got your finances sorted and you have not yet seen the survey report, both issues that could cause you to change your mind.

Far too many people see a deposit as compensation for their disappointment for not closing the sale.

[prefabs]

We are interested in buying a second hand house. The owner told us that we'd have to pay 50,000 baht to the estate agent to take the house off the market while we approached banks. Apparently the estate agent will hold it and if it doesn't go through we'll get in back. From what I've read this is fairly standard practice. However, the owner has added a request that as soon as we get approval from the bank for a mortgage, but before they've actually sent a surveyor, he wants 5% deposit so that he can clear all the debts that he owes on the property before the transfer date. Am I right in thinking that this is completely ridiculous and that he shouldn't get any payment from us until the actual date and time of full transfer of ownership?

Am I also right in thinking that banks offer you a percentage of the appraisal price of a property and not of the actual selling price?

You are right. This is completely ridiculous.

Unless this house is extremely desirable and has many prospective buyers, I think the whole post is crackers. Surely, you would check the finances were available from the bank, prior to making your offer. And the 5% deposit before survey would be refundable if the survey was negative?????? No chance. And where would your refund come from if he used the money to pay off his outstanding debts?????? Even less chance.

If I was you, I would look somehwere else

[Riley'sLife]

1. Tell the owner that you don't care if he still markets the property and that you will NOT be paying his Agent to "hold" any of your money. Unless you are a complete Muppet, of course . You would be embarrassed to post again here asking for advice on how to get your 50,000 back from the Agent when the deal falls through! You categorically DO NOT PAY ANY MONEY TO THE AGENT. Why would you do this??

2. The owner thinks you have just arrived on a banana boat! Tell him you will NOT be paying him any money until you are ready, and certainly NOT UNTIL YOU HAVE FINANCES IN PLACE.

I would want to know exactly what the seller's debts are that relate to the property- ask him for a comprehensive list at this stage, in writing. Then, when you have the list, tell him that he can pay off his debts from the sale proceeds when the deal has completed. I would later tell him that, (once you know you have the mortgage) in view of his request, you wish to with-hold 5% of the sale price following completion, until he has proof that all property-related debts have been paid, or until he signs a legal agreement to unconditionally indemnify you against any claims made against you by creditors created by him. This would be drawn up by your lawyer, of course, which you don't have yet, right?

3. You will not know the amount of the advance available to you from the Bank until the Bank has received the Valuation Report from the Surveyor. The Bank bases its mortgage advance on the Surveyor's Valuation. They will offer you a percentage of Valuation, the Sellling Price is totally irrelevant

4. Why anyone would contemplate dealing with all this - as first time-buyers and in a country that is so rife with corruption and lack of legal redress by asking naive questions on an anonymous forum rather than obtaining definitive legal advice specific to your circumstances I find shocking and, if it were not so irresponsible and reckless, humerous too.

Get a lawyer - this is your family's future you are playing with.

I wish you well Paperplates.

[tattoodrob]

1. Tell the owner that you don't care if he still markets the property and that you will NOT be paying his Agent to "hold" any of your money. Unless you are a complete Muppet, of course . You would be embarrassed to post again here asking for advice on how to get your 50,000 back from the Agent when the deal falls through! You categorically DO NOT PAY ANY MONEY TO THE AGENT. Why would you do this??

2. The owner thinks you have just arrived on a banana boat! Tell him you will NOT be paying him any money until you are ready, and certainly NOT UNTIL YOU HAVE FINANCES IN PLACE.

I would want to know exactly what the seller's debts are that relate to the property- ask him for a comprehensive list at this stage, in writing. Then, when you have the list, tell him that he can pay off his debts from the sale proceeds when the deal has completed. I would later tell him that, (once you know you have the mortgage) in view of his request, you wish to with-hold 5% of the sale price following completion, until he has proof that all property-related debts have been paid, or until he signs a legal agreement to unconditionally indemnify you against any claims made against you by creditors created by him. This would be drawn up by your lawyer, of course, which you don't have yet, right?

3. You will not know the amount of the advance available to you from the Bank until the Bank has received the Valuation Report from the Surveyor. The Bank bases its mortgage advance on the Surveyor's Valuation. They will offer you a percentage of Valuation, the Sellling Price is totally irrelevant

4. Why anyone would contemplate dealing with all this - as first time-buyers and in a country that is so rife with corruption and lack of legal redress by asking naive questions on an anonymous forum rather than obtaining definitive legal advice specific to your circumstances I find shocking and, if it were not so irresponsible and reckless, humerous too.

Get a lawyer - this is your family's future you are playing with.

I wish you well Paperplates.

getting a good lawyer who can deal with all the above would or could be quite dificult unless someone recommends a thorough and experienced in real estate lawyer

im also surprised the seller is putting so many demands especially in the market of today,unless its a super bargain or a property you love too much i would tell him to chill and wait for banks approval. tell him if he has another buyer and they can pay before all this then thats fair and you understand you could lose the property .after banks approval then you could put a deposit(with receipts etc) so then you have a little time to sort out anything.

[midas]

We are interested in buying a second hand house. The owner told us that we'd have to pay 50,000 baht to the estate agent to take the house off the market while we approached banks. Apparently the estate agent will hold it and if it doesn't go through we'll get in back. From what I've read this is fairly standard practice. However, the owner has added a request that as soon as we get approval from the bank for a mortgage, but before they've actually sent a surveyor, he wants 5% deposit so that he can clear all the debts that he owes on the property before the transfer date. Am I right in thinking that this is completely ridiculous and that he shouldn't get any payment from us until the actual date and time of full transfer of ownership?

Am I also right in thinking that banks offer you a percentage of the appraisal price of a property and not of the actual selling price?

paperplates -in your previous post you said the estate agent was asking for money from you

to provide you with a contract? You do seem to be dealing with some shady characters.

You seem like an educated person-are you not familiar with the term " caveat emptor "?

[paperplates]

Riley's life - you make me laugh - A LOT! I think your advice about holding 5% back to cover any debts is spot on. The agent already told us that he owes money on the electricity bills, water bills (both of which they've cut off) and village fees. I thought last night that the thing to do would be to get our lawyer (we do have one!) to tell the owner that she would take ownership of the outstanding bills and that she would pay them on the trasfer date out of the money she gets from our bank. That way we would be certain the bills are paid and he wouldn't have to worry about clearing them before the transfer could go through.

I know it all seems mad but we are certain that we want to buy in this particular village because of its proximity to work and school. There are quite a few for sale, however, in every other one we'd have to rip out all the built in furniture, stair rails, doors etc. etc. and replace because they're not to our taste (I'm female - these things matter!) - but this particular one has been furbished in a way that exceeds my level of interior decor ability - it's gorgeous. But then it would be if he hasn't been paying for it!

[paperplates]

And Midas, the reason I am putting my feelers out here, as well as using a lawyer and doing my own research on the internet and with the land department is because I am trying to be cautious. You guys are really just reassuring me that my reservations are well founded.

Guesthouse - I have read your posts on this site ever since I discovered it and you speak total sense on every topic you post on. I actually wish you were my dad, not that I'm suggesting you're old enough to be!

Edited November 13, 2008 by paperplates

[Riley'sLife]

Well I'm so pleased you've got a lawyer...now I can sleep at night !!

I hope everything goes smoothly now and that you manage to achieve your gaol, as the location seems ideal for you and your family.

The Utility Companies may well seek a payment for re-connection in addition to the outstanding debt incurred by the vendor. The vendor should pay this amount too.

Make sure you see the original Chanote- not just a photocpoy of the front page- before you pay as you need to look on the reverse side of the Chanote to see if there are ony other registered interests in the property.. ie yet more creditors lurking! The Vendor seems to be a real nightmare- but at least has good taste.

So, Chok Dee