What's going on? What is the difference? What to choose?


It turns out that the difference between the deposit and advance payment is not for all the obvious as it might seem, because a lot of people entering the real estate market does not realize the essence of the distinction between depostit and advance payment, and often, without a moment's thought to use these terms simply interchangeable.

Deposit or advance payment, are always referred to money. It is agreed between the parties and paid the amount that when signing the preliminary contract of sale to ensure that the performance of the contract on the initially agreed terms. In the event of non-observance of the agreement, to adopt the name of that amount-its word of advance payment or deposit is born already financially important to the same consequences.

Elementary and most concise definition for deposit in a concentrated and human readable interpreta-tion is given in Article 394 of the civil code (CC) where we read that handing deposit authorizes a party website selling

"to say that, in the event of default of the agreement by one party, the other party may without the designation of a period of grace to withdraw from the contract and received a pledge to keep it, and if the same it has given, may require the sum of twice. In the event of the implementation of the agreement, the deposit shall be deducted in full on the supply side, which gave him; If the deduction is not possible, the deposit is refunded. In the event of termination of the contract the deposit should be returned, and the obligation to pay the sum of twice. The same applies if the non-execution of the agreement occurred as a result of circumstances for which neither party has no responsibility, or for which they bear responsibility."

In other words-a term to be by the side of the seller authorizes the contracted amount of money Word down payment generates an obligation (as in the above-quoted Article 394 CC, whose primary ob-jective is to increase the reliability and the seriousness of the intentions of the parties and thus stronger or weaker (depending on the size of the approved amount) to be bound by the parties. It is, of course, a preliminary contract of sale. A preliminary agreement on the real estate market are very often used because they allow the parties to make an appointment initially as to the terms and condi-tions of payment, the date and the method of release of property, payment method and other quite detailed even the arrangements applicable in a given situation. This in turn allows both parties to calm-ly prepare organizationally and financially to future transactions.

10% wartości kontraktu?


In the past, accept that the amount of the deposit should be about 10% of the value of the contract. And the amount of the deposit is generally accepted by the courts, which do not have a fixed amount so that the amount of reservations with regard to the larger deposits than the usual 10% of the amounts is no longer such. However, currently there is a lots of freedom on this issue, because it so happens that the seller of the property of a few hundred thousandth settle value even relatively low amounts of the deposit being aware of the risk (the possibility of refusing to grant credit by the bank) borne by a potential purchaser.

The contractor (party) advised by a bank Adviser, that can take credit because his earnings do, per-haps even after the signing of the preliminary contract, due to a sudden change in Bank policy (just to raise the bank's margins and apply to loans that are in the process of granting) find out that his earn-ings now to take credit do not qualify. Knowing that such a circumstance may, sellers sometimes entirely aware of the consequences of their choice, to forgo the deposit content with reflux in full advance payment, payment of which treat the more, as rather intentional emphasis by the buyer will purchase, than the actual security of the transaction.

Zaliczka, a naprawienie szkody


The issue of the amount of the deposit whether the application of the advance so, first of all from the findings and ... the quality of the atmosphere of trust between the parties. In situations where the seller (with valid reason, because, for example, he wants to get involved financially in the purchase of another property) depends on a high deposit more than the usual 10% of the value of the contract, the parties agreed to pay the amount split into deposit and advance payment, so that both parties feel equivalently. The advance is returned in the event handle to the contracted between the parties to the transaction, its operation is defined in the articles of the Civil Code concerning the implementation and effects of the implementation of the obligations arising from the agreements. In certain specific situations you may find, however, that the return of an advance payment, however, may not be the obvious, when, for instance, due to not meeting the agreement by one of the parties to the agreement, there has been damage on the other side, because in accordance with article 494 CC :

"A party that withdrawing from the mutual agreement, is required to pay the other side everything re-ceived from its obligations under the contract; may require not only the return of what was, but also compensate for damage arising from failure to perform obligations."

Here we can see the difference, because if the deposit without the need to prove the injury may be retained by the seller if the buyer withdraws (from fault) of the agreement, in the case of an advance payment on the compensation you need to apply to the Court.

In predicting the effect of the proposed transaction down payment, as the performance guarantee signed the preliminary contract is a security gain than the advance . Contractors equivalently to un-dertake to pay to each of its height, so you can most likely expect that both the one and the other side seriously reflect on before you decide not to keep the undertaken within the framework of the preliminary contract.

In turn, the advance has its obvious advantages, especially for buyers who may be concerned that for reasons independent of them may lose their money, what most often results from changing policy of the banks. Then the final decision as to whether to agree to advance belongs to sellers, who in the absence of better bids may accept the conditions offered by the buyers.

Zadanie pośrednika


The role of the real estate agent is primarily to identify appropriate expectations and the possibility of the parties to the transaction, in order to offer clients such a solution, by which both the buyer and seller feel equivalently and well protected (by preliminary agreement is made detailed arrangements and shall be paid in the form of a deposit or advance money to guarantee their respect).

No less important aspect of an intermediary is to inform about the difference and become aware of the consequences of your preliminary agreement naming the clients part deposit or advance payment . You must also inform customers that whatever the contract terminology, the amount of the deposit or the advance is included in the price of the sold property.

A broker who has experience in organizing different types of transactions may propose to the parties the solution most suited to their current living situation and financial capacity. And thanks to the cooperation with the intermediary a credit broker command, you can also keep abreast of the entire sales process by informing the parties about its course and by adjusting the schedule and timing of further action related to the specific transaction.

Author: DoradcaRN Jarosław Kantor