Updated on June 12, 2015
Real Estate Deposit vs Down Payment
When you are selling your house, you need to be knowledgeable about associated real estate lingo. You must be aware of the difference between an awning and a canopy; a loan and a mortgage; and above all, the difference between a down payment and a down payment.
Believe it or not believe it, there are lots of house sellers who believe that down payments and down payments are the same and one, when in reality they’re not.
A down payment is the cash handed over to the owner when a buyer indicates a genuine desire to buy the property or given. It’s a nominal sum which may not be as large as 5% of the overall price, or as large as a couple hundred dollars. The down payment may be returned when the trade doesn’t fall through for reasons beyond the control of the purchaser, and may also be forfeited in favour of the seller. The down payment is credited to the purchaser and forms part of his down payment when the purchase pushes through.
Equity or a down payment, on the flip side, may be regarded as an initial payment on the property. It’s given when the buyer has determined to really get the house (unlike in down payment, where it’s given when the buyer indicates a want to buy the component). The down payment is the entire sum of money a buyer can give as a partial payment and is usually of a larger value (10% of the total property price, or more) than routine deposits.
It is pretty simple to identify. Keep in mind that a down payment becomes part of the down payment and, when the trade pushes through, is smaller. The total of these two, plus any outstanding balance, should be the agreed upon purchase cost of the entire property.