"Won’t $500 be enough?" Why agents ask for a deposit.
And yes, it might well be that legally, a deposit size does not matter. But if you’re wanting to buy a home or investment on the best possible terms and price, please consider how a seller feels if you offer a token sum as deposit.
In Queensland sellers are usually bound to you from the moment a contract is signed and cannot sell to anyone else. So why should a seller take their property off the market while they wait to see if you will settle? A contract is a legal commitment but money held as deposit is the real show of good faith.
If you want a seller to take greater risk on a measly $500 and your “I’m good for it mate” contract, they might want a return on that risk. You might just pay a higher price.
Not all buyers have buckets of cash lying in their account but if they aren’t prepared to put down a significant sum sellers must weigh the risk. In new projects developers ask for 10%, so why do some agents and sellers settle for a tiny sum? Time on the market is critical and if the buyers have finance limitations or are going to have second thoughts it’s better a seller knows up front.
Negotiating with buyers is a skill-set that real estate agents really need to improve. In our opinion this is a key part of the service we’re paid for: the ability to secure our seller clients not just a higher price, but also better terms. So if you’re about to sell your property ask your preferred agent to demonstrate their negotiating skills – before you appoint them.