30/10/2026
🏡 **PROPERTY TERMS EXPLAINED | UNDERSTANDING YOUR DEPOSIT**
**What is a property deposit?**
When buying a property, you may be asked to pay a deposit as part of your Offer to Purchase. A deposit is an amount of money paid towards the agreed purchase price. It is usually a percentage of the purchase price, but the amount is negotiable between the buyer and seller.
Remember, a deposit is not an additional cost on top of the purchase price. It forms part of the amount you have agreed to pay for the property.
**What does a deposit mean to the seller?**
For the seller, a deposit provides reassurance that the buyer is serious about the purchase and financially committed to the transaction. It demonstrates the buyer's intention to proceed, subject to the conditions of the Offer to Purchase being met.
**What is expected from the buyer?**
If your Offer to Purchase includes a deposit, you are expected to pay the agreed amount within the timeframe specified in the agreement.
The deposit is generally paid into the transferring attorney's trust account, where it is held safely until the transaction is finalised. It is not paid directly to the seller.
The deposit is usually invested in an interest-bearing account, where applicable, and the interest earned is dealt with in accordance with the agreement and applicable requirements.
Once the property is registered in the buyer's name, the deposit is credited towards the purchase price.
**A few important things to remember:**
✔️ A deposit is negotiable and is not compulsory in every property transaction.
✔️ Check the amount and payment deadline in your Offer to Purchase.
✔️ Always verify the trust account details directly with the transferring attorney before making payment.
✔️ Keep proof of payment for your records.
✔️ If you cannot meet the agreed payment deadline, communicate with your estate agent and the transferring attorney immediately.
**And what if the sale falls through?**
Your deposit is not automatically forfeited or paid to the seller if a transaction does not proceed. What happens to it depends on the circumstances and the terms of your Offer to Purchase.
**OUR ADVICE:** Before signing an Offer to Purchase, make sure you understand every financial commitment you are agreeing to.
A deposit is more than just a payment – it is part of your commitment to buying a property.
📍 *Property knowledge makes for better decisions.*
Team Pine Crest Property Works
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