In Queensland real estate, the size of the deposit amount in property contracts can significantly impact both buyers and sellers. At McNamara Law, we often see the consequences of deposits that are either too small or too large, much like Goldilocks’ quest for the perfect porridge.
A deposit that’s too small can leave sellers vulnerable. If an agent is involved, the Seller’s agent’s commissions are typically payable even if the Buyer defaults in the Contract, meaning sellers might be out of pocket if the forfeited deposit is too small to cover the fees. On the other hand, if the deposit amount exceeds 10% of the purchase price, the Contract becomes an instalment contract which would mean unintended rights for the buyer and added complexity for both parties.
So, what’s the ‘Goldilocks’ deposit, or the sweet spot? In Queensland, while the minimum deposit required is 0.025% of the contract price, a standard deposit is usually around 5%~10% of the contract price. This amount is generally sufficient to show the buyer’s commitment while providing the seller with some financial security. However, the exact amount can vary based on the agreement between the parties.
Finding this sweet spot is crucial. A well-calculated deposit can protect both parties, ensuring that the transaction proceeds smoothly and reducing the risk of financial loss. At McNamara Law, we specialise in guiding our clients through every step of the real estate process, from initial negotiations to final settlement.
If you’re navigating the complexities of a residential transaction, contact McNamara Law for expert assistance from A to Z. We’ll help you find that ‘Goldilocks’ deposit to protect your interests and ensure a successful outcome.
For more information, reach out to McNamara Law today on 1300 285 888.
