no attempt is made to meet them . For example , if the purchase is contingent on a buyer ’ s home selling , they must prove that they have made efforts to market it .”
Instances where the deposit is refunded to the homebuyer should the sale fall through : 1 . Failure to secure funding . “ If the OTP is contingent on securing funding and their home loan application is denied for whatever reason , the deposit will be refunded . 2 . Breach of contract by seller . “ If the seller breaches the contract , and the buyer cancels , the buyer is entitled to their full deposit back .” 3 . Title deed and legal issues . “ If the transaction fails due to outstanding payments owed by the seller or title deed disputes surrounding the property , the seller is in breach and the buyer will have their deposit returned .”
Guaranteeing the safety of your deposit
Smith says that while most home sales are successful , it ’ s important to remember there is always some risk that a sale may fall through . “ Both buyers and sellers should be aware of this possibility when entering into a property transaction .”
“ The deposit , which is held by a conveyancing attorney , estate agent or secure platform like Buyers Trust is meant to serve as a show of the buyer ’ s commitment to the home purchase and an assurance to the seller that the buyer will honour the agreement of the OTP . Should the sale fail , and the buyer is not at fault , for example , a condition precedent isn ’ t met , the buyer needs to be 100 % assured that the deposit will come back straight to them , together with interest for the time it was invested ,” Smith concludes .
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SA Real Estate Investor Magazine MARCH / APRIL 2023 47