Deposit is a commitment from the buyers to the sellers before signing S&P. It means, the owner shouldn’t sell the unit to the other party in an agreed period. Otherwise, the owner needs to compensate the buyer with double of deposit. However, if the buyer breaks his/her promise, the deposit will not be refund.
To owner, if the buyer had paid for the deposit but end up do not buy, they are wasting their time and might lost some potential buyers. At the same time, to buyer, it is very sad if they have strong intention to buy the unit and had paid for the deposit but their loan is not approved.
Suggestion:
1. If the there is no others buyer, the owner may accept “SUBJECT TO LOAN” by setting an “On-hold Period”
2. If there is other buyer who is interested, owner may explain to the buyer on their situation and clarify that once deposit is given and it will be no refund.
3. To avoid all the hassle and be fair to both parties, buyer should check the Loan status/ property value. Buyer can pay the deposit once the loan is approved.
** Communication is crucial. Buyer has to bear the full responsibility if owner had highlighted that deposit is not refundable.
It is complicated if the agent is involved in the deal. In normal case, agent will try to collect half of the commission as they have done their duties. In this case, it is much depends to the written agreement and willingness of owner. Some of the owner will refund the deposit or half amount of the deposit although they have informed that “DEPOSIT IS NOT REFUNDABLE”.
There are several cases of unethical agent in the markets who pockets the deposit, for example:
Agent pocketed the deposit by convinced the owner to return the deposit but in fact it was returned to the buyer.
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