Property Deposit… What does Deposit really mean?

The term deposit is used by different parties within a conveyancing transaction and each party whether they are an   agents, bank or KiwiSaver representative, can have a differing meaning on the word property deposit.

This legal hint, share by Quay Law,  focuses on clarifying any confusion that may exist whether you are a first home buyer or moving to your next family home

Deposits payable to Real Estate Agents

This property deposit is stipulated on the Agreement for Sale and Purchase of Real Estate and is a payment made by the purchaser of a property to the real estate agent’s trust account or solicitor’s trust account (in private sales). This deposit is in effect a payment of a portion of the purchase price of the property and is payable on the signing of the sale and purchase agreement or upon the Sale and Purchase agreement becoming unconditional.  Purchasers cannot use their KiwiSaver withdrawals towards this deposit payment.

Deposits required by your bank as part of your mortgage approval.

Your banks or mortgage broker also refer to a deposit needed by purchasers, but this deposit has nothing to do with the deposit payable to the real estate agents on signing the sale and purchase agreement. This deposit is the purchaser’s contribution towards the property purchase which is the difference between the price of the property and the amount of the loan.

KiwiSaver deposit subsidy and contribution withdrawals.

KiwiSavers who meet certain criteria are able to utilise their individual and employer contributions to go towards the purchase of a property. This offer is commonly termed a deposit subsidy and is usually advanced to the conveyancing solicitor on the day of settlement.   For more information in relation to your KiwiSaver deposit subsidy, please contact one of our conveyancing lawyers.

Quay Law JPEG LOGO Hi ResContact our Auckland Lawyers at Quay Law to find out more about property deposits, conveyancing transactions and any  related queries.