Advance or deposit: how to properly arrange an advance payment for an apartment

• Name. It must have the following form: “Receipt for the transfer of advance payment under the agreement dated ... date”;
• The exact date when the document was drawn up;
• Passport details of the parties’ representatives (series, number, issued by, registration);
• Advance amount (indicated in numbers and words);
• A link to the main contract being concluded;
• Detailed description of the property (information includes area, address, number of rooms, etc.);
• The signature of the owner of the property that is the subject of the contract (must necessarily coincide with the signature in his passport).

Basic recommendations for writing a receipt:

• You should immediately check whether the person receiving the advance is the owner of the object of the main contract. Transfer of advance payment to a third party is prohibited;
• The person receiving the advance must draw up a receipt by hand and in two copies (mandatory condition: writing documents as carbon copies is not allowed);
• The receipt should be written exclusively with a ballpoint pen with blue ink;
• Writing a receipt does not require the presence of witnesses. If they are needed, then the witnesses should be people who do not have family or friendly ties with either one or the other party to the contract;
• The passport data in the receipt must match the passport data of the parties and witnesses, and the signatures must match the signatures in the passports.

Another important nuance: if previously a receipt required the signature of both parties, today the document will be recognized as legal only with the signature of the person receiving the money (and witnesses, if any).

However, lawyers recommend that persons transferring money leave their signature in the upper left corner of the back side of the receipt sheet to prevent its substitution.

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Advance is not equal to deposit

From the legal side, an advance is an advance payment under a purchase and sale agreement. Without a contract there is no advance payment. But realtors call an “advance” an unofficial cash advance payment. “Advance” in this case does not provide any guarantees to either the seller or the buyer. Therefore, you need to understand that the “advance” that realtors usually mean and the deposit are two different things. A symbolic “advance” can be discussed verbally and then you can easily refuse your words. And the deposit is drawn up in writing, and an agreement is concluded with it. The deposit must guarantee that the terms of the contract will be fulfilled. The Civil Code clearly states how the deposit can be returned, and what reasons may prevent this:

• If the apartment is not sold due to circumstances beyond our control, the deposit is returned to the buyer. The same applies if both the seller and the acquirer both refused the transaction;
• if the seller is at fault, then the buyer receives his amount multiplied by two;
• if the buyer is at fault, then he may not count on a refund of the deposit.

Another way to make an advance payment for an apartment is a security deposit. It was recently included in the civil code. It represents a prepayment. And when entering it, you can specify any conditions. How it will be returned or not returned at all - all these details will be at the discretion of the seller and buyer.

Which is more profitable?

On the part of the buyer, making an advance payment in the form of a deposit is a beneficial action, because he receives more guarantees that the purchase will be completed. After all, if the seller breaks the deal, he will not only have to return the deposit, but double the refund amount, which is provided by law.

It is beneficial for the seller to take a deposit if he has decided to turn the property into money (the so-called net sale). In other cases, the owner may offer the buyer an advance payment. Then, as experts advise, as a compromise option, you can sign an agreement on receiving an advance payment, and stipulate in it that after some time (the period is set by the parties to the transaction) this amount will become a deposit.

If the terms of the advance agreement are not met, you can extend or terminate the transaction and fulfill what is specified in the contract. If the buyer decides to terminate the transaction and the purchase and sale agreement ceases to be valid, then the prepayment (regardless of how it was made - in the form of a deposit or an advance payment) remains with the seller.

When the seller himself suddenly decides not to sell his home, then in the case of a deposit, he returns 2 times the amount of the advance payment. And from the advance payment he can also deduct his expenses, for example, those spent on advertising for sales and others (if the written advance agreement does not provide for a clear return mechanism).

Buying and selling a home is a delicate matter.
With JCat.Real Estate you will learn the best way to buy or sell a home. In order for the planned transaction to be profitable, you need to approach this issue competently, having studied all the nuances. We are ready to help with this. Stay informed of your rights with JCat.Real Estate.

Why is it important for the buyer and seller to pay a deposit?

First of all, the deposit is a guarantee that the transaction will take place. For both the seller and the buyer. The latter can be sure that he has already definitely booked this apartment and no one else will buy it. And the owner, who, for example, spent money on completing the transaction, will not be left at a loss if the buyer suddenly refuses to purchase the property. But to ensure there are definitely guarantees, a symbolic “advance” will not do. Here you need to conclude a deposit agreement for an apartment or a purchase and sale agreement. You can also make a security deposit.

How to correctly transfer the advance amount or deposit

It is better to transfer an advance payment, as well as a deposit in the form of a deposit when selling an apartment, through a written document confirming receipt of the amount. This serves as a guarantee that the buyer, if the owner changes his mind, will receive his money back.

In the end, this can be achieved through court if there is written confirmation and the injured party proves that the deal fell through due to the fault of the other party. Yes, sometimes buying a home results in litigation.

Prepayment amount

As a rule, the average prepayment amount is no more than 100 thousand rubles, and the minimum amount starts from 20 thousand. But it all depends on the region. According to experts, the less you contribute, the better. If the owner of the apartment asks for more, then you should first find out the reason. If it is really compelling, then it is worth fulfilling the request. But at the same time, be sure to draw up a deposit or purchase and sale agreement with a security deposit. So that in case of termination of the transaction, the prepayment will be returned to you.

But if the reason seems suspicious to you, then most likely it is better to refuse the purchase. You will protect yourself from scammers who live off such prepayments. And to be completely sure that this is the real owner of the apartment, check him on all fronts. First, for example, make sure that he is not under investigation and is not a frequent visitor to the bailiffs. Then you must definitely find out who the owner of the property is based on documents, and not according to the seller. to order a USRN extract before making an advance payment . She will tell you who previously owned the apartment, how many owners there are, and whether there are any encumbrances on the property. It will be easier and faster to use the EGRN.Register service. Indicate the property address or cadastral number. And in half an hour the electronic version of the document will be in your hands.

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What should be in the deposit agreement?

The more specific conditions you write down, the better. First of all, the document must contain personal information: yours and the owner’s. If there are multiple owners, mention them all. In addition, write down detailed information about the apartment, as well as a list of documents that will be needed for the transaction. The contract must include the amount of the advance payment and for how long you are paying it. And also how the deposit can be returned. Be sure to specify the rights and obligations of the parties, as well as their actions at the time of making the prepayment. For example, the buyer may be selling his property, and the seller will complete the paperwork. In addition, indicate in the contract at what time the old owners must move out and check out. And also, if there are any reasons that may interfere with the transaction, they should also be mentioned. The same applies if the property is under mortgage. And the last thing is the place, time of the transaction and who will bear the costs of its execution.

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We issue a receipt for receipt of the deposit

This document is needed to confirm the transfer of money. The seller must put it in writing in your presence. Make sure that the seller’s signature is the same as on the passport. In addition, the document must contain the passport details of the owner and buyer. Deposit size. Time and date of compilation. You also need to indicate that the funds are transferred under an agreement. Sometimes a separate receipt is not issued, but information about the receipt of money is included immediately in the contract.

If all the documents are completed correctly, then you should not be afraid that the seller will turn out to be a fraudster. Even if he refuses to return the prepaid money, he can be sued. But before that, notify the owner in writing that you want to return the payment and indicate the reason. As a rule, in almost all cases, if the buyer is truly not to blame for breaking the deal, such courts are successful.

Text: Ksenia Antonova

Sample receipt

In order for a receipt for receipt of funds to have legal significance, it must be drawn up according to certain rules. They are as follows:

• Only the person who, in accordance with the DCP, is the recipient of the money, must write a receipt. No relatives, even the closest relatives, should appear in this document (with the exception of cases when the seller, due to a physical disability, illness or illiteracy, cannot sign with his own hand, then at his request another person can sign the transaction. The latter’s signature must be certified by a notary or other an official who has the right to perform such a notarial act, indicating the reasons why the person making the transaction could not sign it with his own hand (Article 160 of the Civil Code of the Russian Federation));
• The document must include the following details: name of the document (receipt), place, date and time of preparation;
• the receipt must contain a record that this amount was received specifically for the sold real estate, and not for any other goods or services;
• the document must indicate the exact address and cadastral number of the sold apartment;
• the text of the receipt must contain a reference to the purchase and sale agreement under which the obligations of the parties to the transaction are fulfilled (it may, for example, include the following phrase: “The money was received in full, in accordance with such and such a clause of the agreement on such and such a date”);
• the receipt must indicate the full surnames, first names and patronymics of the parties to the transaction and their passport details, including residence and registration addresses;
• the receipt indicates the exact amount of funds received (in numbers and in words);
• The document is certified by the Buyer’s signature with a full transcript of the full name written by hand.

If these rules are not followed, in the event of a dispute regarding the transaction, the court may recognize the document as having no legal force and not accept it for consideration. To further enhance the legal significance of the receipt, it is often written in front of witnesses who also certify the document with their signatures.

Receipts for receiving money are usually written by hand, but the option of typewritten writing is not excluded, where a signature is put by hand and only a transcript of the Seller’s name is written. The receipt is drawn up in one copy, which is transferred to the Buyer after all conditions for the transaction have been fulfilled and mutual settlements have been made between its parties.

If payments for an apartment are made non-cash, for example through a letter of credit, then the document confirming the payment is a bank payment order indicating the transfer of funds to the Seller.

Sometimes it happens that the method of mutual settlements is not clearly indicated in the policy. In this case, with non-cash forms of payment, Buyers may require from Sellers a document that confirms the fact of transfer of money to the Seller’s bank account. In this case, the Seller should make a note that the funds in such and such an amount on such and such a date were received in full by means of a non-cash bank transfer (receipt of funds into a bank account). A receipt for receiving money for an apartment does not require mandatory notarization.

Size

The parties independently agree on the amount of payment that will act as a deposit; it is not regulated by law. Most often this is 5-10% of the cost of the apartment.

If your intention to buy this particular home is final, you can offer a larger amount. However, not all sellers go for this option. Therefore, if the seller offers to set less than 5% of the transaction amount as a deposit, then think about whether he is sure that he is ready to sell this apartment to you. If he finds a buyer at a higher price before completing the transaction, he will not lose too much.

How to properly apply for a deposit in 2021

Transfer of the amount under the preliminary agreement occurs only with the preparation of a written document and its signing by both parties.

Let's clarify a few more points:

1. It is imperative to review the documents of the owner of the apartment in advance, whether there is one owner or several. If there are several, then everyone must be present at the signing of the contract or agreement. Minor children who have a share in real estate are no exception. Parents or guardians sign for them.
2. It is recommended to draw up the deposit in the presence of a notary with the involvement of several witnesses. They must not be related to either party. These could be colleagues, friends, etc.
3. The preliminary agreement must indicate the full cost of the residential property and indicate the amount of the deposit. In this case, it is necessary to state that it will be taken into account in the final calculation.

The agreement is drawn up in two copies, one for each party.