How to get mediation money? Can I go back and return it? Breaking through the traps of 5 mediation money and letter of offer

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When buying and selling houses, you must often hear such words as "mediation fee" and "offer letter", but you don't know what legal effect the mediation fee and offer letter have? In fact, the mediation fee and the letter of offer are common disputes in real estate transactions. This article will explain and compare the concepts of the mediation fee and the letter of offer, and solve the hidden legal traps one by one.

What is mediation money?

If the buyer has already selected the house he likes, when he is ready to negotiate with the seller, he can pay a "mediation fee" first, and then sign a "mediation form" stating the bid amount to show the sincerity of the purchase.

After receiving the mediation money, the real estate agent will keep it on his behalf and start negotiating with the seller. If the seller agrees to the buyer's bid, the mediation money will be converted into a deposit and handed over to the seller for collection.

The purpose of the "mediation deposit" is to ensure that both the buyer and the seller are obliged to complete the transaction. If the buyer regrets not buying after making an order, the deposit will be confiscated by the seller. Conversely, if the seller regrets not selling, the deposit must be refunded twice. And if the house is successfully sold in the end, the deposit will be counted as part of the house price, which is equivalent to an advance payment, and the buyer only needs to make up the remaining amount.

Further reading:Pre-sale house sales|Instructions for house viewing and contract signing, builder selection and dispute resolution

(1) How much is the reasonable amount of mediation money?

The amount or proportion of the mediation fee is not mandatory, but in general transaction practices, the amount of the mediation fee usually falls within 2%-5% of the total house price, or a fixed amount is directly charged, about 100,000-500,000 yuan.

(2) What is a "Bill of Good Offices"?

After paying the mediation fee, don’t forget to ask the real estate agent for a “mediation form”, and write down three major information on the mediation form: “the mediation period, the amount of the mediation fee, and the price for buying the house”, which should be signed by the buyer and the real estate agent.

The mediation form may also be called "mediation contract, mediation money receipt, bid deposit receipt, letter of intent for housing sales bid, housing sales appointment letter", no matter what the name is, the nature and meaning are the same. The key points of requesting a mediation list are:

  1. As a receipt, it proves that the buyer has indeed paid the mediation money to the real estate agent.
  2. Indicate the bid amount to avoid errors in the negotiation between the real estate agent and the seller, which may lead to transaction disputes.

(3) Does the mediation bill have legal effect?

Although there is no such word as "good offices/good offices" in the law, the mediation money/good offices are still legally effective. The opinion of most courts is that once the seller agrees to the bid and the mediation deposit is transferred to the deposit, it is equivalent to establishing the concept of "reservation".

Appointment means that the buyer and the seller have reached a consensus on the key conditions of the contract (such as housing and price), and only keep the details for discussion (such as payment method, delivery deadline, etc.). to ensure that both parties have the obligation to conclude this agreement in the future.

(4) Can I go back on my word after mediating? Can the mediation money be refunded?

The "mediation fee" is refundable, while the "deposit" is non-refundable. The mediation money can be refunded unconditionally in the following two situations:

  • The mediation period ended, and the negotiation failed
  • The buyer rushes to withdraw the mediation before the seller agrees

Generally speaking, the time limit for mediation and negotiation will be noted on the mediation form, which is usually 3-10 days. If the real estate agent fails to complete the negotiation with the seller within this period, the real estate agent must return the mediation fee unconditionally.

During the mediation and negotiation period, as long as the seller has not agreed to the bid, the mediation deposit has not been converted into a deposit, and the buyer can repent at any time. Therefore, if the buyer changes his mind after mediation, he must notify the real estate agent to stop bargaining as soon as possible, so that the mediation fee can be refunded.

What is an offer for sale of a house?

If the buyer has the sincerity to buy the house but does not want to pay the mediation fee, he can also use the "Housing Sale Offer" instead. The offer will specify the buyer's intention to purchase the house and the bid amount. If the seller accepts the price, he needs to sign the offer to express his consent.

(1) Which is better, the letter of offer or the mediation money?

The advantage of using the offer letter is that the buyer will not get stuck in a cash flow during the negotiation stage, and there is no need to worry about the poor-quality real estate agent who will mediate the money and escape. However, in terms of actual trading habits, many people still believe that the mediation fee can better demonstrate the sincerity of the purchase than the offer letter, and may affect the seller's willingness to accept the bargaining price.


(2) Does the housing sale offer have legal effect?

The opinion of most courts is that the content of the offer letter is only the scope of the house and the price to be drawn up in advance, and the rest of the sales conditions have not yet reached a consensus, and at most it has the nature of an "appointment" rather than the original contract of the house sale.

In the Ministry of the Interior version of the "Notes for Signing an Offer", it is also clearly stated that the offer is an appointment. Therefore, after signing the offer, both the buyer and the seller are obliged to continue negotiating and signing the contract.

(3) Can I go back on my word after signing the offer? Is there any liquidated damages in the offer?

The offer letter, like the mediation form, will indicate the effective negotiation period. During this period, as long as the seller has not agreed to bid, the buyer can withdraw the offer at will. If the offer is not successfully negotiated by the end of the period, the offer letter will automatically become invalid.

As long as the seller agrees to the bid within the negotiation period, the letter of offer will formally have the nature of an appointment, and at this time, any party who reneges will constitute a breach of contract.

Usually, the offer letter provided by the real estate agent will stipulate the calculation method of liquidated damages, most of which fall around 3% of the total bid price. Therefore, although the offer letter does not collect mediation money in advance, the final liquidated damages may even be higher than the mediation money. However, there are also offers that do not stipulate the amount of compensation for breach of contract at all. In this case, the consumer and the real estate agent can negotiate and add it as needed.

Common Legal Pitfalls of Mediation Fees and Letters of Offer

The following is a compilation of the most frequently asked questions about housing bargaining by customers for reference. Before paying mediation money and signing an offer, be sure to pay attention to these hidden pitfalls to avoid legal disputes.

(1) The real estate agent said that a certain percentage of service fees should be deducted first for mediation?

it's not true.

If the real estate agent receives mediation money or deposit, it can only be kept on behalf of them. If it needs to be confiscated or refunded in the end, it will be paid in full. Regardless of the mediation money or deposit, it is not a remuneration for the real estate agent!

In addition, it is also incorrect if the real estate agent asks to deduct expenses such as travel expenses and handling fees from the mediation fee. It is suggested that the buyer can directly state on the mediation form the deadline for refunding the mediation fee after the negotiation fails, and no excuses shall be made to deduct any expenses .

As for the remuneration of the real estate agent, it depends on how the two parties signed the entrustment contract with the real estate agent. In principle, they are paid separately, so they will not be directly deducted from the mediation money that the buyer requests to return.

(2) The seller says that he has received the deposit/signed the offer, which means that the house sales contract is established. If the buyer goes back on his word, he needs to compensate the transaction loss of the total house price. Is this true?

Accepting and signing the offer letter only represents an appointment transaction, and does not mean that the sales contract has been established.

Normally, the nature of the deposit and the letter of offer is an appointment. In the appointment, both parties only have the "obligation to sign this agreement" rather than the "obligation to perform the transaction." Therefore, when either party repents and refuses to sign the contract, although the other party can request liquidated damages or damages, it cannot enforce the transaction and requires payment of the full price or transfer of ownership of the house, because the formal sales contract has not yet been concluded.

Tips for lawyers: How to divide the appointment and the contract?

Whether a contract is an appointment or a contract depends mainly on whether the agreed items are detailed.

Assuming that in addition to the key points of the transaction, even the details of the contract are complete, and both parties have the intention to perform the transaction directly according to the content of the contract, even if it is called an appointment, the court may still determine it to be a contract according to its nature. Since this agreement is established, both parties are obliged to complete the transaction in accordance with the agreed items.

However, due to the large amount of housing transactions, both parties to the contract will be very cautious, and usually do not directly list all the detailed conditions on the offer letter/mediation form, so the situation of "reservation is regarded as the agreement" is extremely rare in housing transactions.

(3) It is said on the Internet that the "deposit" is refundable and the "deposit" is non-refundable. Is it true? Is there any difference between a deposit and a deposit?

There is no difference between "deposit" and "deposit" in Taiwanese laws and regulations.

It is said on the Internet that the deposit has a guarantee nature, and the deposit is only an advance payment, so the deposit is refundable and the deposit is not refundable, but this statement is only applicable in mainland China.

In terms of Taiwanese law, all legal articles are currently referred to as "deposit", but it doesn't matter if people write "deposit", and it will not directly affect the legal effect. The opinion of most courts is that whether the deposit/deposit has the nature of guarantee and whether it can be refunded should still be based on respecting the true meaning of the parties to the contract, and should not be limited to the words used.

(4) Will the offer be invalid if the buyer voluntarily waives the review period for the offer?

Whether it is invalid or not depends on the situation.

In accordance with the provisions of the Consumer Protection Law, the review period for the housing sales offer is at least 3 days. However, in actual operation, in order to seize the opportunity and avoid cumbersome procedures, many transaction parties often adopt the method of "backdating" to make the offer letter look legal in form, but this method is prone to controversy.

Most courts believe that if the real estate agent fails to give the buyer sufficient time to review the terms before and after signing the contract, and prompts the buyer to sign the contract with the review period reversed, this will violate the review period provisions of the finalized contract, and the finalized clause will not constitute an offer the content of the book. However, if the offer includes, in addition to the finalized clauses, "customized" clauses revised by the buyer, these customized clauses will not be affected by the review period, so the offer may not be invalid in its entirety.

Conversely, there is also a case ruling that if the real estate broker does give the buyer the opportunity to review, and the buyer has actually reviewed the content of the contract, or knowing that he has the right to review but still voluntarily waives it, then based on the principle of good faith, the buyer can reverse the contract at this time. Waiver of the review period by date will not invalidate the offer.

(5) How to prevent unscrupulous realtors from defrauding mediation funds?

A small number of unscrupulous real estate agents will falsely claim that the seller has already made an offer when the buyer withdraws the mediation, so as to embezzle the mediation money that should have been refunded to the buyer. There are opportunities to prevent this problem by:

  • Choose to cooperate with real estate agents with legal business licenses.
  • Before withdrawing the mediation, first inquire about the bargaining status in a way that can leave a record, such as a message, and make a withdrawal after confirming that the seller has not made a bid.
  • The buyer can indicate on the mediation form that if the seller agrees to bid, the real estate agent must notify the buyer within a certain period of time.
  • If the real estate agent indicates that the seller has accepted the bid, the buyer can ask the real estate agent to provide a mediation form signed by the seller or other relevant certificates.

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