When purchasing real estate, the buyer makes a deposit to confirm the seriousness of their intentions. It would seem that everything is simple: they made a deposit and can calmly prepare for the transaction.
In fact, there are many nuances in the process. Without knowing them, you can lose money, nerves and time.
A deposit is a certain amount of money that is transferred as proof of the conclusion of a contract and to ensure its execution. Simply put, if you made or accepted a deposit, then you must conclude a contract. The deposit protects the interests of both the seller and the buyer.
Please note that the deposit agreement must contain all the essential terms of the future contract.
The deposit can only be returned under certain conditions.
The transaction was canceled by mutual consent of the parties or due to circumstances beyond anyone’s control – the deposit is returned.
The transaction was canceled due to the fault of the buyer – the deposit is not returned.
The transaction was cancelled due to the fault of the seller — the deposit is returned in double the amount, unless otherwise provided by the contract or the deposit agreement.
An advance payment is a prepayment
In the case of real estate, we are talking about an advance payment under a purchase and sale agreement. If there is no contract, then, in fact, there cannot be an advance payment. This is the main thing. In order to fix the price, date of the transaction and other important conditions, you need to conclude a preliminary purchase and sale agreement.
An advance payment for an apartment is simply an advance payment that will be taken into account when concluding a purchase and sale agreement. It will remain with the seller only if the advance agreement contains a clause on compensation for damages due to the fact that the buyer changed his mind. The transfer of the advance payment is formalized by signing an advance agreement.
To avoid confusion, in the article we will also use the word “advance”, but in quotation marks.
Often in everyday life, an “advance” is used to refer to the payment of money to symbolically confirm the intention without any documents. Such an “advance” does not provide any guarantees. This means that you cannot be sure that the transaction will take place and on the terms you agreed upon.
All this can lead to quite significant financial losses. For example, the buyer has already spent money on the transaction, and the seller at the last moment refuses and returns the “advance”. In this case, no one will compensate the buyer for possible losses.