What my attorney said about the roof on the house I want to buy

bowmore said:
No, the deposit id applied to the purchase price.
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I'm sorry, Bowmore, but it's still not making sense to me, because if a buyer was borrowing for the home or property they bid on and their offer accepted, they would have to come up with the full amount, so the whole deposit thing is escaping me.

In many cases here in Canada, buyers need to be pre-approved for mortgages to ensure they have the legal means (and right) behind them to bid on a property, however, once a bid is accepted by the seller, the sale is closed. The buyer then has all finances in place (in full), and those monies are transferred over to the seller.
 

The earnest deposit also protects the buyer. I know of 2 cases, one of which I was the seller. When we sold our last house we had verbally agreed to accept an offer from a seller via our agent. The buyer's agent who worked in the same office as ours told her buyer it was a go and went on a 4 day vacation-- failing to bring the paperwork over to have us agree to the sale in writing.

Later that day our agent called with a second offer, that was higher and in cash. He said that we could either accept that offer or notify the original buyer and see if he wanted to make a higher offer. We went with the second offer. We were under no legal obligation to accept the first offer because the earnest deposit and paperwork hadn't been done. Our agent was there with the paperwork to formally accept the offer 20 minutes after it was ready.

Our experience with our buyer's agents has always been good.
 
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Aunt Marg said:
it's still not making sense to me
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When an offer is made on a house it is normal (here) for the buyer to include a deposit. The purpose is to show the seller that the buyer is serious and has something to lose if they back out. When closing comes the deposit is credited towards the purchase price, if all goes well neither party loses anything. In the case of a mortgage the deposit is usually treated as a part of the down payment. If a realtor is involved the realtor normally holds the deposit until closing, not the seller. Sometimes the realtor just holds the check and does not deposit it, makes returning the deposit a little easier.
 

Alligatorob said:
When an offer is made on a house it is normal (here) for the buyer to include a deposit. The purpose is to show the seller that the buyer is serious and has something to lose if they back out. When closing comes the deposit is credited towards the purchase price, if all goes well neither party loses anything. In the case of a mortgage the deposit is usually treated as a part of the down payment. If a realtor is involved the realtor normally holds the deposit until closing, not the seller. Sometimes the realtor just holds the check and does not deposit it, makes returning the deposit a little easier.
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Okay, I see where it comes into play.

Seems like a simple written understanding (contract) would suffice, as would a pre-approval process, which would alleviate the deposit requirement.
 
There is one situation where the roof needing repair does not matter at all. Some buyers are not interested in the house, as they intend to tear it down anyway. They want the lot. This usually happens on a beautifully located property, and they intend to build their own gorgeous mansion there. You might be able to negotiate a price with this type of buyer, without bothering to fix the roof, or drastically dropping your price. If they are rich enough, and really want the lot, they will pay for the house.
 
Aunt Marg said:
That is correct.

So a "deposit" in your country is? Handing a sum of money over to the seller to say thanks? To reflect job well done? Here is a little bonus for your effort?

Once the offer is accepted, you don't have to come up with the full sale price, you simply put down a deposit?

So if my husband and I were to buy a home for $750,000, when the seller accepts our offer we just throw a "deposit" their way... here seller, here's... $10,000 for you, just because?
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🤦🏻‍♀️ No. The “deposit” can be as little as 1000.00. It tells the seller you are serious about wanting to buy the house and not just wasting their time. Once all the inspections are done and the due diligence dead line has passed the option still exists for the buyer to back out but if they do they lose their money.

It would be unfair to hold up a property for a month or more and change your mind at the last minute, therefore the deposit.
 
In our area, houses sell within 6 days. As long as the condition of the house is half way decent it is sold for a ridiculous amount of money. It is crazy here.
 
Aunt Marg said:
Seems like a simple written understanding (contract) would suffice, as would a pre-approval process, which would alleviate the deposit requirement.
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If someone is dealing with a realtor, he/she usually determines that you have the funds available for the price point you’re looking at right from the start. Just because someone has the money or mortgage set up, doesn’t mean they won’t back out and leave the buyers in the lurch. There has to be a show of good faith.

Aneeda72 said:
🤦🏻‍♀️ No. The “deposit” can be as little as 1000.00. It tells the seller you are serious about wanting to buy the house and not just wasting their time. Once all the inspections are done and the due diligence dead line has passed the option still exists for the buyer to back out but if they do they lose their money.

It would be unfair to hold up a property for a month or more and change your mind at the last minute, therefore the deposit.
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This.
 
Jules said:
If someone is dealing with a realtor, he/she usually determines that you have the funds available for the price point you’re looking at right from the start. Just because someone has the money or mortgage set up, doesn’t mean they won’t back out and leave the buyers in the lurch. There has to be a show of good faith.


This.
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The good faith that's been presented to us came by way a formal letter where the real estate agent jotted down our offer to present it to the property/homeowners (no cash money involved).
 
Aunt Marg said:
In Canada?

I don't think so.

We've put offers in on homes and properties in the past and never once attached a deposit to our offers, nor were we asked for a deposit.

No such conditions applied.
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I believe you said you live in British Columbia? Here's an excerpt from the Real Estate Council of B.C. about preparing an offer to purchase: (Note bullet point #4 below under what your offer should include).

What should the offer contain?​

When you prepare an offer, it should contain a number of standard details, plus any conditions which are important to you. Be fully aware that once you sign this document and the seller also signs it, a legally binding contract has been formed. Legally binding means both you and the seller will be bound by the terms of the contract and must each perform your respective obligations as stated within that contract. Either of you can go to court to compel the other to perform his or her part of the contract. Even if a contract contains subject clauses, it is legally binding as soon as both the buyer and the seller have signed the contract.

Your offer should include:

  • Date of offer. Date and time your offer expires.
  • Full legal names and addresses of both the buyer and the seller.
  • Full legal description of the home.
  • Amount of the deposit you are giving (which will be held in a trust account and will form part of your down-payment).
  • Sale price.
  • Amount of your cash down-payment and details as to how you will finance the remainder of the purchase price. Your desired closing and possession dates.
  • A list of the conditions which must be satisfied before the sale can occur. These are called “subject clauses” or “conditions precedent.”
  • A list of items which are not attached to the building (chattels), but which you state are to be included in the sale price; for example, drapes, refrigerator, stove, etc. It is helpful to be specific in the description of these items. Your signature."
Not sure how you avoided making a deposit on properties you have purchased or when those purchases were made. Making a deposit is not a legal requirement but it IS standard practice in all Canadian Provinces. Most sellers would refuse an offer that didn't include a deposit because the buyers could pull out of the deal at any time without penalty.
 
MrPants said:
I believe you said you live in British Columbia? Here's an excerpt from the Real Estate Council of B.C. about preparing an offer to purchase: (Note bullet point #4 below under what your offer should include).

What should the offer contain?​

When you prepare an offer, it should contain a number of standard details, plus any conditions which are important to you. Be fully aware that once you sign this document and the seller also signs it, a legally binding contract has been formed. Legally binding means both you and the seller will be bound by the terms of the contract and must each perform your respective obligations as stated within that contract. Either of you can go to court to compel the other to perform his or her part of the contract. Even if a contract contains subject clauses, it is legally binding as soon as both the buyer and the seller have signed the contract.

Your offer should include:

  • Date of offer. Date and time your offer expires.
  • Full legal names and addresses of both the buyer and the seller.
  • Full legal description of the home.
  • Amount of the deposit you are giving (which will be held in a trust account and will form part of your down-payment).
  • Sale price.
  • Amount of your cash down-payment and details as to how you will finance the remainder of the purchase price. Your desired closing and possession dates.
  • A list of the conditions which must be satisfied before the sale can occur. These are called “subject clauses” or “conditions precedent.”
  • A list of items which are not attached to the building (chattels), but which you state are to be included in the sale price; for example, drapes, refrigerator, stove, etc. It is helpful to be specific in the description of these items. Your signature."
Not sure how you avoided making a deposit on properties you have purchased or when those purchases were made. Making a deposit is not a legal requirement but it IS standard practice in all Canadian Provinces. Most sellers would refuse an offer that didn't include a deposit because the buyers could pull out of the deal at any time without penalty.
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I'm assuming since the time we purchased our last home, rules and requirements have changed.
 
If you mean by "due diligence" that I had it inspected, that date has come and gone. Still waiting on the radon report. If all went smoothly, the closing was scheduled for July 23.
 
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debodun said:
If you mean by "due diligence" that I had it inspected, that date has come and gone. Still waiting on the radon report. If all went smoothly, the closing was scheduled for July 23.
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Before the closing date there is a due diligence date, you need to find out what that date is; because you can back out before that date with no problem and your money will be returned. Why did you put down such a large deposit?

In any event, get on the phone, call the realtor and/or the attorney tell them you want to know what the due diligent date is, and you want to back out of buying NOW, TODAY, if that date has not passed. If the radon test has not been completed it says to me the due diligence date has not passed.

But do it NOW! Right NOW. So you can get your money back. or not, up to you, not telling what to do, just strongly suggesting that you do it NOW. 😍😂😂. Right now @debodun
 
My attorney just phoned and said there was good news & bad news, Good - the owner has agreed to give me full credit against the rood repair. Bad - there is a lien on the property. She said that the owner has to settle that before the closing, so we now have to wait for that to transpire. Still waiting on the radon report.
 
debodun said:
My attorney just phoned and said there was good news & bad news, Good - the owner has agreed to give me full credit against the rood repair. Bad - there is a lien on the property. She said that the owner has to settle that before the closing, so we now have to wait for that to transpire. Still waiting on the radon report.
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So you are buying it? YAY! I wonder why the radon report is taking so long mine was put in on the day of the inspection, picked up the next day, and they got the report the next day. Yup, the lien is bad they should have taken care of that before putting the house up. Did you find out your due diligence date?
 
Pepper said:
From the beginning, I wondered why this house was so cheap. A lien.
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But it’s being laid off. I did not think it was cheap though. I am thinking of buying a house that is 225000, it’s very tiny, very and the backyard has been paved over so perfect for mr I want a yard but will never work on it. He can go sit in the backyard and admire the asphalt
 
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