$$ Deposit question...advice please!
 

I'm looking at a nice sc, only seen in pics so far. Looks great, low miles, owner agrees to ppi, BUT "would like a $1000 cash deposit and sales contract contingent on the inspection and the car being free of any major defects prior to the inspection". Sorry if I sound green here, but is this normal?? What bothers me is that I have yet to see the car in person, but I'm fairly confident its in v. Good condition. Thanks if u can advise me!

Kurt


*forgot to add that price was never negotiated yet as well.

How can you put down a deposit and agree to buy the car for x dollars, until the ppi is done? The results of the ppi will undoubtedly affect the sale price.

If you do, and then decide to buy the car once the great ppi results come through, you won't have any negotiating power because the seller knows you can't walk.

I'm sure there's other valid points to be heard but it doen't sound right to me. I wouldn't do it, and if I was selling a car I would expect to have to accommodate requests for ppi's from buyers who may or may not go tjrough with it.

Of course the potential buyer should expect to pay for the ppi, and with that in mind the seller should expect that said buyer is reasonabley serious.

Seller is being a hard-nose. Tell him no. No way I'd give money and a commitment to buy prior to PPI.

With my limited 4 yrs of ownership and one year of looking: no. I never heard of it, but it sounds like he's looking for serious buyers only and may be reluctant to negotiate if it doesn't have major defects. Will he haggle if it has minor defects? Is the mileage really low? Maybe it has to do with the price/mileage range? Is the deposit otherwise refundable? Can a 3rd party hold the cash? Does the contract include the final price?

Thank you very much, Andy. I too feel it is putting me in a precarious situation. I asked if i could put the deposit down after the inspection and he said that he would like it as in the above quote. Is there somehow to avoid this. I expect everything to go well, and I would also like to counter his offer, $1,000 lower. Thanks again,

Kurt

I just don't see how a commitment to buy could be worked out with the unknown outcome of a ppi.

If the seller thinks you are not serious, remind him that you are about to invest $300-$400 on a ppi.

Or find another car. Part of buying a car like this is finding a previous owner that you trust was a good previous owner and not a dink.

Just tell him that at the end of the day you can't possibly commit to buying the car until it's been through a ppi. And even then the pair of you would need to negotiate a price based on the results.

He's behaving a bit abnormally.

Use your logic.........
 

Kurt,

I don't understand why a prospective buyer would layout a $1000 deposit to have a car checked or inspected (PPI) and execute a sales contract in the first place? If you decide to go this path, I won't be surprised if the sales is not finalized and you're going to call FOUL!!!!! You had been very (over) meticulous in searching for your 'perfect car' to no avail. Not only this is not normal, you will be in a disadvantage. The seller looks like a real hustler to me. This is my personal opinion and not necessary the case.

Tony

Thanks, Steely. Mileage is 59k. Didnt ask if deposit is refumdable. Will ask about 3rd party too, but he wants cash. Not sure if contract includes final price. Will ask next time. Thanks so much again for the details.

Thanks again, Andy!!

Thank you very much, Tony. I'm so confused he wants to go this route. He's been such a great guy over the past year. I don't know what to think. I am completely serious about the car and would never pull any monkey business...I've conveyed this many times. :(

I tell him that he could have his $1000 and sales contract AFTER the results of the PPI come in and the final price negotiated. Otherwise, I'd want to be right there, take the car to the shop myself, wait for the results, drive back, then negotiate. I was looking at a Carrera in Anaheim a year ago. I worked a deal with the owner such that I would fly in, we'd drive the car to the PPI shop, I find a ride to a nearby hotel, stay overnight, pick up the car and drive it back to his house and go over the PPI and come to a price. His involvement in the time spent was all up to him - I could have done ALL the legwork myself, with zero involvement on his part. Willingly.

Don't walk, negotiate. Come to a deal that you're both comfortable with. THen go from there.

I suppose a commitment to buy could be made and the price left open -- way open.

If the PPI shows so many problems the car is worth only $100, then he'd refund you $900.

Sure.

Ask him what entity will hold the deposit. If he says he will, tell him no. There are 3rd parties who will hold deposits on houses, so they should exist for other items.

These are NOT rare cars. Expect to find another one.

OTOH, maybe the guys is tired of tire kickers... he wants to be sure you are serious.

Be sure to put everything in writing - who will drive the car to the PPI, who picks up; where it is to be done (pick a place other than where he has it worked on BTW); etc. etc.

These are NOT rare cars. Expect to find another one.

Got it?

I've bought and sold a lot of cars over the past 30 years.

I've never done what your seller is proposing, either as a buyer or a seller.

I personally would never do what your seller is proposing. I would advise you to not do it, either.

Here's what will happen: You sign some contract agreeing to buy the car for say $25,000 "contingent on the inspection and the car being free of any major defects prior to the inspection."

You get a PPI. It will show:

Minor weeping of oil return tubes: $300 parts and labor.
Slight leak of right side cam oil line: $300 parts and labor.
Worn shifter bushings: $XXX
Needs AC service: $XXX
Front brake pads at 15%: $200
and a few other things common on a nice, but still 35 years old car.

The seller will take the position that none of these are "major defects," they are all expected on a 35 year old car, and you are legally obligated to pay $25K and take delivery of the car. Your choice is to do that, or kiss your $1K goodbye.

What now? Sue him for $1K?

Again, I wouldn't give any deposit, but if you choose to do that, I'd go in fully expecting that there is a very good chance you may not get it back.

the normal way would be to negotiate a price contingent on inspection, you arrange and pay for the inspection, get the results and then see if you want to (1) buy the car at the agreed price, (2) pass on the car completely, or (3) renegotiate a price based on the inspection results.

having sold several cars myself over the years,and actually being is this exact position today,I would agree with the seller.

I am not interested in running around doing PPI's for a buyer that is not completely serious. Pleco,you should know at this point,if the car come through with no defects,whether you would agree to purchase or not. If you like the car,put a deposit on it,and have the PPI done. If it fails,negotiate the issues off of the selling price,or walk,

This is how it works when buying a home, deposit is contingent on subject removal,in the case the subject is the PPI. I would never agree to a PPI with a buyer that was not prepared to give a deposit on the car. For example,a negligent shop could damage the car in the process,or you could crash on the way. Where is the incentive for the seller if you are not willing to put a deposit on the car?

Plecostomus,
The problem probably is that he doesn't know if you are serious or being "monkey". Why don't you tell him up front just like you expressed here. Offer him $1k off his current price and offer him that you are paying for the PPI. If you decide not to buy the car, you will give him the PPI worth $1k, so he won't feel he is wasting his time on you. And NO DEPOSIT.

westcoast911,
If he walks, in the situation below (bold font), would you give him back his deposit?

Absolutely,the seller will always refund a deposit if the car fails the ppi and an agreement not be reached. Remember,the deposit is subject to the buyer obtaining and approving a ppi. Pretty standard stuff IMO.

Good luck Kurt...hope you've finally located "your" 911 :)! After an extensive search I located "my baby" ten years ago and understand both sides of this issue imo. To me, 1K is too much for a good faith deposit. After talking with my PO extensively over the phone, and realizing he was a true car guy, I essentially told him, "if the car is as you describe, then I WANT it" and sent him a $250 (non-refundable) deposit and arranged a round ticket flight to check her out the next weekend. I was "serious", he knew it, but I wasn't going to purchase a mint, 46K mile, garage queen, sight unseen as I was indeed paying a premium for a car "I lusted after". I didn't expect him to take it off the market for nothing. I rolled the dice and didn't even have a PPI (not recommended), but have no regrets. Flew up, checked her out, and still remember the 500 (s)miles road trip to bring her home. Worked for me...YMMV...good luck!

Keith

Bingo. I have asked for deposits to effectively take the car off the market and give this buyer 'first in line' status. I make the deposit refundable and also like to have a time constraint for them to check out the car and make a decision (I won't hold it indefinitely). The phone doesn't stop ringing even though you've given a deposit, but the seller should be telling people that he/she has a deposit on the car. This is good for the buyer too, as the buyer can have some confidence that the car won't be sold out from underneath him/her.

I would also suggest agreeing on a price at this time...contingent on the car being in the condition as described in the advertisement (or through later correspondence). That includes major and minor defects as well as wear and tear. Those are all negotiating points before and after a PPI. If the seller knows of an issue beforehand, they should disclose it prior to the PPI and that helps the buyer with proper valuation. If not, then it's news to both buyer/seller and there shouldn't be any argument around lowering the valuation accordingly.