What is a Deposit?

 

An initial payment made by a person or entity entering into contract to purchase as asset or property. The deposit is usually required to secure the contract to supply / sell. In the context of a residential property sale, the deposit, usually 10% of the purchase price, is the amount to be paid by the buyer to the seller on exchange of contracts as security to ensure the transaction goes ahead. If the buyer subsequently withdraws from the contract, the deposit may be forfeit. It is possible to negotiate the payment of a lower sum, but the 10% will become due should the transaction not complete.

 

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