Advance-money and deposit – what’s the difference

Posted: August 15th, 2013 | Author: | Money

When buying a home we often meet with the fact that the seller will want to receive advance-money or deposit. Although they are often confused, and the two terms are used interchangeably, the difference between them is quite significant. Let’s start with an advance because it is much easier.

Donate it to the seller and if he wants to sell the apartment to someone else while we provide the formalities such as credit, deposit it back to us in the same amount, in which it was paid. If we muse, this advance also comes back to us. If the contract is completed, the deposit remains with the seller as part of his payment. The establishment of the deposit is a little more complicated, but also much more reliable. If we pay deposit and the seller will change his mind, we cannot insist on its return and it will be still dependable on the seller. However, if the seller changes his mind and wants to cancel the contract, you can request a refund of the deposit, but double the amount. It is much better protection agreement for both sides. The question whether we pay an advance money or a deposit should be regulated agreement, if the issue is not addressed it means that the money will be treated as an advance.

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