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Buying a property is one of the most significant financial decisions you'll make in your lifetime. Whether you're a first home buyer in Christchurch or an experienced investor, understanding the conveyancing process is crucial for protecting your interests and ensuring a smooth transaction. Weston Ward and Lascelles’ Christchurch property lawyers have guided countless clients through the complexities of buying and selling property, but one area of the process is typically misunderstood by clients, and that is what happens to your deposit when you are buying a property. It’s an important aspect of property conveyancing, so this article is to fill in any gaps and help you navigate this element of the transaction. Understanding property deposits in New Zealand A deposit is an initial payment made by the buyer to the seller and represents a proportion of the total of the purchase price. The deposit is usually payable on the purchaser confirming that all conditions inserted in the contract for the benefit of the purchaser have been satisfied i.e. the deposit is usually payable when the contract goes unconditional. But note auctions are different. If you have bought a property at auction the deposit must be paid immediately upon winning the auction, as typically auctions are unconditional on the fall of the hammer. If you do not pay the deposit immediately after winning an auction, the vendor would immediately be entitled to cancel. But if you did not pay the deposit on a property (not purchased at auction) immediately after you confirmed that all conditions inserted in the contract for your benefit have been satisfied, this would not usually entitle the vendor to immediately cancel the contract. The vendor would first have to serve notice on you requiring you to pay the deposit within 3 working days or else! A deposit serves as assurance for the vendor that the purchaser is serious about completing the transaction and offers financial protection to the vendor if the buyer defaults. For purchasers, it demonstrates good faith and secures their right to complete the property purchase under the agreed terms of the Sale and Purchase Agreement. 

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