Property solicitors refer to the deposit as a part payment of the purchase price, paid on exchange of contracts. It acts as a forfeitable bond. This means that if you don’t complete (move) on the agreed date, you can lose it.
The deposit is traditionally stated at 10% of the purchase price, though a 5% deposit is often accepted. If you only pay a 5% deposit and then default, the balance of 5% immediately becomes payable. If you are buying and selling you will need to fund the difference between a 5% deposit received and a 5% deposit payable on your purchase.
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