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Question,
What is the standard protocol how to handle a deposit on a vehicle if the buyer backs out.
IE... If someone puts down $500.00 to hold a vehicle for a month until they can arrange to pick it up, and then they back out after the month is up. Are they entitled to the entire $500.00 to be refunded back to them? I realize state to state and country to country laws may differ but is there a standard protocol that most of you follow? If not, what are your thoughts?

I'm tempted to refund most of it as I did not cancel or refuse any other sales during that time period. However, I did incur some expenses to set the vehicle up the way we discussed (IE... car is not close to me so I paid a friend to go out and get all the parts sorted, swap headlights, etc).

Thanks
 

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As I see it, the deposit is forfeited entirely. You held the car for the prescribed amount of time but the buyer did not fulfill his end of the deal. He shouldn't expect nor is he really entitled to a refund of the deposit.
 

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The whole point of a deposit is to incentivize the seller to stop marketing the car and stop accepting offers. If its just $ that comes back to the "buyer" then what's the point?
 

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Have you agreed that if no sale you will keep the deposit? If so then the deposit is yours, otherwise refund it. If you spent money out of your pocket bring this to the buyer's attention.
 

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the deposit is yours, you can choose to give some of it or all of it back if you feel like a nice guy. I have BTDT and given it back because I felt like the guy was not jerking me around. Guess it depends on the situation. I think you are 100% in the clear keeping it if that is what you want to do.
 

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Unless specified that it is a "non refundable deposit" the person is legally due a 100% refund of their deposit.
Laws could vary by location, I recommend you confirm your local laws before making a decision.
 

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Technicaly fastscirocco is correct. In my opinion, a desposite is just that, to be used as payment twards the purchase. If the seller backed out, the he is out his deposite. Just in case though, you might want to follow what fastscirroco said, and check your local laws about this situation. this way it doesnt legaly com back and bite you.
 

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Yea technically its like a security deposit, where if you do not pay, that amount is kept.

But personally I would be a nice guy and give him some back. Yes I would explain to him that you would like to keep a certain amount due to expenses. And if he complains, He should feel lucky your even offering to refund him at all.
 

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you DONT refund the deposit, that's the whole point, if they give you 500 to hold it for X amount of time and falls through, that's why you keep the deposit, as you could've sold it while they dicked around and backed out.

if you book a hotel or rental car and don't cancel in the X amount of tie in the contract the deposit is forfeited

deposit is yours, you can always give some back if they are nice etc but certainly dont have to
 

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imo all deposits are "non refundable" unless otherwise stated. in most business like hotels they dont have to specify that its non-refundable everyone knows you wont get it back (yes its in the fine print, and hotels usually have a cancellation date that if you cancel before a certain date you will get your money back) so I think unless you signed a contract that specified terms the deposit is yours to keep. I probably would refund half, IF the guy wasnt a jerk and, as you said, you didnt loose an opportunity to sell the product.
 

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fastscirocco said:
Unless specified that it is a "non refundable deposit" the person is legally due a 100% refund of their deposit.
Laws could vary by location, I recommend you confirm your local laws before making a decision.
I think this is probably legally correct. Not sure if it is fair to a seller though. talk it over with the guy and settle.
PS- what you really want is to take money and call it an "option" he is paying you, a sum to "buy" the option of purchasing the car by a certain date. when the option expires he no longer has that right to buy it and the money is kept by the seller (seller has the perogotive to still sell it to him past the date). just word it so that if he does buy it by the agreed date that the sum is put toward paying the purchase price. I think that is what you guys really want instead of a true deposit :D
 
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