A deposit is paid by you when you purchase a property. In Queensland, this can be any amount from NIL to 10% of the purchase price and the total amount may be split into an initial and balance deposit.
The deposit will be held by the deposit holder noted on the contract (this is the agent or seller’s representative) until settlement takes place. When settlement occurs, the deposit is released to the seller.
What is the difference between an initial and balance deposit?
An initial deposit is usually paid when you sign the contract or at another date agreed between you and the seller. It generally is a smaller amount then the balance deposit.
The balance deposit is usually paid at a later date, such as when the contract is unconditional.
It is important to note that the total deposit you pay does not exceed 10% of the purchase price. There are legal implications if it does, and you should check the total amount before signing the contract.
How to pay the deposit
You can pay the deposit:
- In cash
- Electronically using internet banking
- Using a deposit bond from your lender (if agreed by the seller)
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 verbally confirm the deposit holder’s bank account details 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.
