Cost of reservation deposit?

[MrSkipsey]

Can anyone explain why the cost of reservation varies?
Ive been doing a few searches and have noticed that on some developments a handful of agencies have various deposits but the payment structure seems to be the same.

Is this purely to secure more sales by offering at a cheaper reservation price?

 

[dave99]

Leads to a level of commitment

Can anyone explain why the cost of reservation varies?
Ive been doing a few searches and have noticed that on some developments a handful of agencies have various deposits but the payment structure seems to be the same.

Is this purely to secure more sales by offering at a cheaper reservation price?

HI

There are many ideas on how to do this.

I ask for a £100 refundable reservation fee
- which effectively just takes the specific apartment off the "available" list whilst the new owner can more research, or a site visit etc.
Next Stage is a £1000, deposit after about 4 to 5 weeks if the owner has not been able to see the development or is happy to proceed.
Then the real payments start as agreed with the owner over anything from 3 months to 15 months.

The process lends itself to variations so that it is possible for the developer to have some confidence that the new owner is serious without any significant burden to the owner.

Where the initial payment is much higher (anything from £2000 upwards) then I'd be very worried about getting it back if I chose not to proceed for ANY reason.

.
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[MrSkipsey]

Many thanks Dave for clearing that up. My mind does like to think the worst. Its easier to prepare for!

Every companyy works different ways after all.

 

[Roger]

Can anyone explain why the cost of reservation varies?
Ive been doing a few searches and have noticed that on some developments a handful of agencies have various deposits but the payment structure seems to be the same.

Is this purely to secure more sales by offering at a cheaper reservation price?

I understand that some agents/developers ask for a higher reservation fee as they then feel a little bit more secure about the potential purchasers being serious. As the money is fully refundable, I'm not so sure this is the case.

I put down a 2000 reservation fee, and all it has done is effectively stopped me putting down another reservation on a different development and making a choice between the two later. In that regard I suppose it has worked for the agent...