Property Buying Process

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  1. #1

    Property Buying Process

    I've never bought an apartment before in Hong Kong. What with the falling property prices, I feel now's a good time to get a decent discount on prices out there.

    I've just had a call from an estate agent who told me it's necessary nowadays to put down a deposit check with the seller (with some associated paperwork, of course) BEFORE final price negotiation, to convince the seller that you're a serious buyer.

    Sounds fishy to me. Has anyone else come across this or is this just a dodgy estate agent strategy?


  2. #2

    Join Date
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    That sounds very dodgy to me.


  3. #3

    Join Date
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    extremely dodgy....

    shouldn't the final price be decided before any placing any deposits?

    and it is a buyer's market now. Tonnes of sellers are dying to get rid of their property now, fearing further drop in prices next year.
    unless you know there are a few people wanting to buy the same place you want to buy, i dun think you should be in a hurry to hand over your money so soon.


  4. #4

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    It is normal if you are making an offer.
    Depending on the value of the property, you can gave a crossed account payee cheque in the name of the seller for about HK$20,000- $50,000.00


  5. #5

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    Old Timer that just isnt true....

    You never pay anything until vendor and buyer have agreed to a price. Then a cheque is drawn up at 10% on the date of signing the prelim contract, then a further 10% is paid within 10 days of signing.

    Then its a matter of waiting, a formal contract to be signed via the vendors lawyer, which is gone over by your own lawyer, the property conveyancing being undertaken, and the 80% balance payment being paid on the agreed date of settlement, to your lawyer, which is then forwarded to your vendors lawyer, in trust.

    Also, agent commission is fully negotiable, always remember that.

    If an agent asked me to pay a deposit on a property, prior to negotiating an agreed price, I'd send him on his way and find somebody else. I'd also inform the HK Estate agents authority and put a formal complaint against that agents licence number. http://www.eaa.org.hk/welcome.htm

    Last edited by Skyhook; 12-10-2008 at 06:32 PM.

  6. #6

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    I'm with skyhook in principle although when I purchased my property last year I paid 5% on signature of the preliminary agreement, 5% on signature of the formal agreement and 90% on completion.

    The Code of Ethics of the Estate Agents Authority states (para 2.41.7) "A licensed estate agent should only release deposit money in accordance with the terms of the agreement for sale and purchase or lease, or with the purchaser's instructions." and (para 2.41.9) "A licensed estate agent should return a purchaser's cheque or deposit money as soon as practicable if the purchaser's offer to purchase or lease the property is not accepted by the vendor".

    There's no way I would hand over any money without some sort of written agreement.

    Last edited by PDLM; 12-10-2008 at 06:37 PM.

  7. #7

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    When I am offering price which is 15%-20 % below the asking price, I give the agent some deposit and sign the Agents agreement and ask him to get the seller to sign.
    Most cases it works. Then we sign the final agreement with the lawyers.
    Recently I negotiated for a friend and he gave the cheque for $500,000/ . Got the price he wanted.
    It is a negotiating tactic.


  8. #8

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    Quote Originally Posted by PDLM:
    I'm with skyhook in principle although when I purchased my property last year I paid 5% on signature of the preliminary agreement, 5% on signature of the formal agreement and 90% on completion.

    The Code of Ethics of the Estate Agents Authority states (para 2.41.7) "A licensed estate agent should only release deposit money in accordance with the terms of the agreement for sale and purchase or lease, or with the purchaser's instructions." and (para 2.41.9) "A licensed estate agent should return a purchaser's cheque or deposit money as soon as practicable if the purchaser's offer to purchase or lease the property is not accepted by the vendor".

    There's no way I would hand over any money without some sort of written agreement.
    The agent returns the cheque ,if the seller does not accept your offer.
    The Agent is responsible and will handover the cheque only after the seller accepts buyer's price and signs the agreement.
    It is very normal.

  9. #9

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    Indeed - but that's not what the OP suggested - they are suggesting that a cheque be given to the seller (not the agent) before a price has been agreed. That is simply wrong. But maybe the OP misunderstood. Giving a cheque for 5-10% to the agent with a signed formal offer (in the form of a Preliminary Sale Agreement), with the cheque only given to the seller when they also sign the Agreement, is normal.


  10. #10
    Quote Originally Posted by PDLM:
    Indeed - but that's not what the OP suggested - they are suggesting that a cheque be given to the seller (not the agent) before a price has been agreed. That is simply wrong. But maybe the OP misunderstood.
    Yes, I think I probably misunderstood! Thanks for all your inputs. That's certainly cleared a few things for me.

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