Pre-contract deposits are defined as the amount that a home seller may ask from their potential buyers. This is done to help them reserve the house up for sale, intended for the people they have already spoken with before.
Selling a home or a property means that one interested party may offer you a price that might be higher than your expected amount. If that happens, some of them may raise the stakes and end up stealing the property with a better price offer.
If you want to prevent that from happening, be sure to set a pre-contract deposit in place. If you are not familiar with this concept yet and you would like to know more, look no further than the following pieces of information we have listed below.
Trust us—taking note of this quick guide may just help you understand pre-contract deposits better, and they may even enable you to come up with an amount that will not be considered overkill by all your buyers. Remember them by heart, and you will never run into a bad deal:
What Is the Purpose of a Pre-contract Deposit?
A pre-contract deposit is beneficial in many ways, but can favour the seller and the potential buyer. While laws and regulations are meant to protect both parties from scams and failed transactions, there may still be other factors that may negatively affect the deal’s progression.
The following are just some of its primary purposes:
To Reserve the Property
The seller would want to separate the serious buyers from the non-committed ones, meaning that the latter is most likely to pay up a deposit even before the deal has been finalised.
For those buyers who are still unsure about their options, they may opt not to pay the deposit, allowing the seller to offer the house to other buyers who may be more motivated to get it off their hands. This works for the seller because this will compensate for any missed opportunities to sell the property due to an undecided buyer.
To Secure A Buyer’s Dream Home
As with movie tickets, there will always be extra fees for pre-orders and reservations. The same principle applies towards pre-contract deposits, wherein the buyer may secure their dream house with the needed fees.
The seller will, of course, keep to their word and take the property off their sales ads, giving the potential buyer time to gather the needed payment and requirements to finally buy the property.
To Protect The Seller And Buyer From Scams
We have mentioned before that the perks for this type of deposit go both ways. On the one hand, it aims to protect the seller from scammers who only wish to lengthen the wait time for the reservation.
On the other hand, it gives the buyer a solid stance against the scammers who are only in it for acquiring the amount. There is no case against these scammers without any evidence, and the collected amount will be enough to prosecute the collecting party.
Pre-contract deposits are necessary as they provide certain advantages for the seller and the potential buyer. Sometimes, the rules and regulations regarding property sales may not be enough, which is why this type of deposit is needed.
Both parties will be protected, even if the property is still under the reservation phase. With this fee implemented, the deal can go smoothly moving forward, ensuring that no one will go home disappointed with the property sales.
If you want to get cheap conveyancing quotes in the UK, look no further than Conveyancing Store. We offer a comprehensive conveyancing tool for comparing all your solicitor quotes, ensuring that you have access to only the best deals. Contact us today for more information about our services.