Dealing with Deposits

Hello there - how are you...busy as a bee with your search for your dream home?

I am still racing around London showing off my ‘home town’ to my South African friend! The highlight of this week is going to be the Spitfire and Hurricane fly-past over Whitehall at 4pm, Friday 20th August 2010, commemorating the 70th anniversary of the Battle of Britain. The flyover is preceded by a reading of Winston Churchill's speech outside the Churchill War Rooms at 3.52pm.” Never in the field of human conflict...” and all that! I am really looking forward to it.

I was chatting to a Greece Buying Guide reader and he had what I thought was a brilliant idea: in order to see a bit of Corfu and to decide exactly where he wanted to buy, he had taken a walking tour on the island. Not only was it very enjoyable but he had a really good idea of what was out there plus which areas suited him and which did not. I will try and find out more about this for you - in fact I would love to do a walk myself and report back about it. Watch this space...

Anyway....back to the business of purchasing your little piece of heaven on earth! I thought I would just lay out all the info you will need about your deposit. It is the first of the payments you will be required to make and I would like you to be easy in your mind that all is going according to plan.

When you sign the preliminary contract for a new or resale property or a plot of land, you usually pay a deposit. If you're buying a resale or a new finished property (not off plan) you usually pay a deposit of 5 to 10% when signing the contract. The percentage may be negotiable: 10% seems to be the norm. The balance owing will be paid when the final purchase contract is signed.

Deposits are refundable under strict conditions only. These relate to any conditional clauses such as failure to obtain a mortgage or any other clauses that you put in and that are accepted by the vendor. A deposit can be forfeited if, for instance, you don't complete the purchase transaction within the period specified in the contract, so you need to be very careful that you cover yourself against any eventuality in your original offer to purchase.

If you withdraw from a sale after all the conditions have been met, you will lose your deposit and may also be required to pay the estate agent's commission. If previously known problems with the property are revealed, the deposit will automatically be returned to you.

The contract can be cancelled by either party; the buyer however forfeits his deposit and the vendor must pay the buyer double the deposit. However, in some cases, if one of the parties wishes to withdraw from the sale, the other party can demand that he goes through with it or that he receives compensation for damages.

If you want a more detailed outline of the whole buying process, please get a copy of our updated Greece Buying Guide Guide, available at http://www.greecebuyingguide.com/guide.htm

Happy buying and I hope that the advice we have given has been of some help. Do drop us an email if you have any suggestions, tips or buying hints for others who may follow after you - I will make sure that they are circulated to those who need them.

Take good care and best wishes,

Carol