Seal the deal: When and how to pay your deposit

Once you have your deposit sorted, whether you've saved it or using equity from your existing property, what do you actually do with it? Let's look at two of the more common purchase scenarios to see when, how and to whom you would pay the deposit.

Private sale

If you make an offer on a property and the vendor accepts, a process begins to complete the sale. The first step is the signing and exchange of a contract. Generally, you sign one copy of the contract, the vendor signs the other, then you swap and sign the other copy (so you each have a fully signed contract).

When the signed contracts are exchanged, you generally have to pay a 5 - 10% deposit to the vendor’s real estate agent.

The exchange of contracts can take several days. So you should have time to arrange a payment method that suits you and the vendor’s real estate agent. Options may include:

• personal cheque (if your account is eligible for a cheque book)
• bank cheque
• electronic funds transfer
• deposit bond.

The agent usually holds the deposit in a trust account until settlement. In some circumstances, the buyer and the vendor could agree to release the deposit funds to the vendor before settlement. You should speak to your solicitor or conveyancer before you agree to that.

Auction

When you buy a property, you’ll need to pay a deposit upfront. This may be done by a funds transfer or bank cheque. Ask the real estate agent in advance about what they’ll accept.

Online funds transfer

The most common way to pay a deposit, particularly at auctions where the sale price is unknown. Ensure well ahead of time that your daily transfer limit is sufficient for the deposit.

Bank cheque

ANZ account holders can obtain a bank cheque at ANZ Branches with teller services. Auctions usually happen on the weekend, so you should check the opening hours of the closest ANZ Branch in advance. 

The cooling-off period

For private sales, in some states and territories there may be a cooling-off period written into the contract. It’s a good idea to have your solicitor check the contract and explain your rights before you sign.

If there is a cooling-off period, you can pull out of the contract during this time. The length of the period varies between states and territories but it’s usually a few days.

Once the cooling-off period has passed, generally the contract becomes unconditional. Then, you’ve got some time until settlement to finalise your home loan, organise insurance and get ready for moving day.

If you bought at auction, you don’t have the luxury of pulling out of the sale.  There is usually no cooling-off period in auction contracts and you’re obliged to complete the sale.

Learn more about what to do in the lead-up to settlement. 

To sum up 

• In a private sale, you pay the deposit at the time you're exchanging contracts.
• For an auction, ask the real estate agent in advance about how they'll accept payment.
• You may be able to pay by personal cheque, bank cheque, EFT or deposit bond.
• Ask the real estate agent which payment method they require.