A deposit is paid by you when you purchase a property. In Victoria, the standard deposit is 10% of the purchase price (negotiable) and the total amount is often split into an initial and balance deposit.
The deposit will be held in the trust account of seller’s real estate agent or legal representative until settlement takes place, or the deposit is released early under certain circumstances.
What is the difference between an initial and balance deposit?
An initial deposit is usually paid when you sign the contract representing an amount sufficient to cover the cooling off period.
The balance deposit is often due to be paid later, such as when the contract is unconditional.
How to play the deposit
You can pay the deposit:
- By bank cheque
- Electronically using internet banking
- Using a deposit bond or guarantee from your lender (if agreed by the seller prior to signing contracts)
You should pay the deposit ahead of its due date to avoid any delays and save a copy of the transfer receipt/remittance. It is important that you diarise the due dates to ensure the deposit is received on time.
You should always be mindful of cyber security when transferring funds. You should verbally confirm the deposit holder’s bank account details directly with them to ensure the funds will be transferred to the correct account.
The deposit must be paid when its due otherwise you would be in breach of the contract.
