10 Mistakes When Purchasing a Property Which Can Be Avoided - Part 3 - Paying A Holding Deposit

10 MISTAKES WHEN PURCHASING A PROPERTY WHICH CAN BE AVOIDED

Part 3 – Paying a holding deposit.

Sydney-based legal practice Checkbox Legal will assist you to avoid or minimise complications which arise when purchasing real estate. We helped many of our clients to avoid multiple pitfalls in the process and now ready to share our knowledge with you.

HOLDING DEPOSIT

Our clients often ask us questions about when, how and to whom is a holding deposit paid?

Pursuant to standard conditions of Contract for Sale and Purchase of Land, used by vast majority of solicitors and conveyancers in NSW, purchasers pay to  a selling agent a holding deposit in the amount of 0.25% of the agreed purchase price.

This deposit is so called because it is “held” by selling agent and it is paid usually in the agent’s office on a date of signing of the contract of sale by a purchaser.

It would be useful to remind that by that time a purchaser should already have some funds, at the very least sufficient to cover the following expenses:

1.         At least 10% of the purchase price to be used as a deposit for the property (in "buyer's market"                 periods a 5% may be sufficient as vendors are keen to sell;

2.         To pay stamp duty (at the time of this publication Office of State Revenue  provides a calculator     on their website);

3.         To pay your solicitor or conveyancer’s fees and disbursements, as well as extra services, such as   strata report, building report etc.;

4.         To pay for your removal costs, connect electricity, gas, internet etc.

Conclusion: holding deposit is paid at the time of signing of the contract; the purchasers are advised to have sufficient savings to pay for other fees, taxes and expenses

As always, we remind that we at Checkbox Legal provide not only residential and commercial conveyancing services, but also act for our clients in a variety of other legal matters - check out our website for details.

Contact Checkbox Legal on our phone number 0410 64 54 53 or sent us an email.

Regards

Andre Petrov - Checkbox Legal.