A deposit in real estate is an upfront payment made by a buyer to secure a property during a purchase. It is typically a percentage of the property’s price, paid to the seller or developer to demonstrate the buyer’s commitment to the transaction.
Relevance in Real Estate
- Secures Property: A deposit ensures the property is reserved for the buyer while other processes, such as financing or due diligence, are completed.
- Sign of Seriousness: It signals the buyer’s genuine intent to purchase, helping build trust in the transaction.
- Part of Total Payment: The deposit is deducted from the total property price upon closing the sale.
In Kenya’s real estate market, deposits are common in both off-plan and completed property sales, often ranging between 10% to 30% of the property’s value.
For buyers of affordable luxury apartments, such as those offered by Barre-Homes, paying a deposit secures the property at its current price and locks in terms favorable to the buyer.