In this Q&A Thursday video, Chris Prefontaine addresses a common seller request for a security deposit in an option‑to‑purchase (AO) transaction, especially on high‑value homes. He explains that a security deposit is a refundable tenant‑style arrangement, which does not fit the buyer‑seller dynamic of an AO. Chris recommends replacing the security deposit with a non‑refundable buyer down payment, suggesting a split where the seller receives roughly 50 % of the total down payment (e.g., $100k upfront on a $200k total). He provides a concise phone script to convey this to the seller, emphasizing that the down payment is “rock solid” and not returned if the buyer walks away, while also highlighting the buyer’s continued equity buildup. The video then promotes the QLS Home Study program and upcoming virtual events as resources for agents to master such scripts and become market authorities.
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What if the seller says to me, I need a security deposit? Hey guys, it's Chris Prefontaine and welcome to another Q&A Thursday. Another question literally this week came up, and it's not that it's never come up for us, it does. It's a lot of this is your confidence and your posturing on the phone, frankly. But if it does come up for you where the seller says to you, well, I need a security deposit, like say you're doing an AO, this is where it would come up. I, I— this guy was doing an AO and it was a million-dollar house, and he said, I need a security deposit in case your buyer, which you will sign to me, defaults or tears up my house. Okay, here's what your script is to the seller. Mr. Seller, first of all, a buyer tearing— a person tearing up your house is a tenant. We don't deal with tenants. We deal with buyers that need time. On a million-dollar house, for example, They're gonna put down to get in the door $70,000 to $100,000. And over time, especially what's going on with the economy and COVID, we're gonna get them up to $200,000. They don't trash your house. Now, if by chance you were the only one in a million-dollar property that somebody trashed your house after putting $200,000 down and they were willing to walk away from that, here's the script on the security deposit for all prices. Okay, I'm being facetious but accurate. First of all, when you say you want a security deposit, in addition to that being a tenant, A security deposit implies it may go back, right? That's what security deposit is. If they don't trash it, you give it back. A non-refundable buyer down payment implies it's a non-refundable down payment. It doesn't go back. So, Mr. Seller, on an AO, especially on a million-dollar house, you're gonna get out of that $100,000 upfront and out of the $100,000 over time, you're gonna get whatever you split with them. I told our student, just give them 50%. Like, are you okay with $100 grand if this guy gets— this buyer give you $200 over time? Give the seller half the deposit. And then the question with this, with the security deposit, is real simple. No, we don't get a security deposit. We're going to give you a down payment that is rock solid that you don't have to give back if they leave your house. And oh, by the way, Mr. Seller, that whole time they were there, in addition to losing their $200 grand You're going to pay your house down. So what do you lose in this situation? It is a huge win. Now, do we want him to have a win that way, morally and ethically? No, we want the buyer to cash out. But when they ask for security deposit, they just don't understand the system. Okay, so I hope that helped you. Um, easy script question to handle. All of these script things that come up, all of them are in the QLS Home Study video program. All of them. You can read them, okay, print them off, read them and study them, but you can also listen to live calls. So if you have not yet gotten QLS, go to getqls.com, getqls.com, and get your butt as the authority in your marketplace so that every seller that speaks to you is like, man, that guy or that gal, they got it going on in this economy. They're commanding a position and they're getting deals done. We're getting deals done to the— at the rate of 3 times what we were pre-COVID, guys. So get yourself in the QLS course. Go to getqls.com. And by the way, with an event coming up, we have another virtual event coming up. You can wear whatever the heck it is you wear from waist down and be on in your living room and be at our entire event. And if you go to qlslive.com, you'll see the last event we did in April, which was our first virtual event, kicked butt. They— some of the students, most of them liked it better There was more interaction. We have breakout rooms. It's a lot of fun. Get registered for the next event for sure. And it doesn't matter if you see this way after the event is gone. Go to qlslive.com, register for the next event. Okay, we'll see you on the next Q&A Thursday. Thank you.
