A deposit in the sale of a home is a sum of money paid by the buyer as security for the seller. This amount is typically 10% of the purchase price and is transferred after the contingency period has expired. The deposit demonstrates that the buyer is serious and protects the seller if the sale unexpectedly falls through. In this article, we answer the most frequently asked questions about the deposit, from the amount to the refund process.
How much is the deposit in a home sale?
The deposit in the sale of a home in the Netherlands is standardly 10% of the agreed purchase price. If you sell a home for €400,000, the buyer pays €40,000 as a deposit. This percentage is not a legal requirement, but it is so common in Dutch real estate practice that it is considered the standard.
The buyer and seller record the exact amount of the deposit in writing in the purchase agreement. In theory, the parties can agree on a different amount, but deviating from the 10% norm is unusual and may raise questions with the other party. A higher deposit gives the seller additional security; a lower deposit can weaken the buyer’s negotiating position.
The deposit is not transferred directly to the seller. The amount is deposited into the notary’s escrow account, where it is held securely until the transfer takes place.
When does the deposit have to be paid?
The buyer pays the deposit after the contingencies have expired without being invoked. Most purchase agreements specify a deadline of two to three business days after the expiry of the contingency period. The exact date is always stated in the purchase agreement.
Contingencies are provisions that give the buyer the right to cancel the sale without financial consequences — for example, if financing falls through or if a structural survey reveals a serious defect. Once this period has passed without any issues, the sale is essentially final and the deposit is transferred.
If the buyer cannot fund the deposit out of pocket, a bank guarantee is a commonly used alternative. You can read more about this in the next section.
What is the difference between a deposit and a bank guarantee?
A deposit is an amount that the buyer actually transfers from their own funds into the notary’s account. A bank guarantee is a written declaration from a bank guaranteeing that it will pay out the amount if the buyer fails to meet their obligations. The financial effect for the seller is the same; the difference lies in where the money comes from.
Deposit: personal funds in the notary’s account
With a deposit, the buyer draws the amount from their own savings or a bridging loan. The money is immediately held in the notary’s escrow account. This gives the seller concrete security: the funds are already there.
Bank guarantee: security through the bank
With a bank guarantee, the buyer does not need to have the funds immediately available. The bank acts as guarantor and pays out the amount if the buyer defaults. A bank guarantee typically costs a small percentage of the guaranteed amount per year. For buyers who prefer not to tie up their savings, this is a convenient solution.
Both forms are legally equivalent. Which form applies is agreed upon in the purchase agreement.
What happens to the deposit if the sale falls through?
If the sale falls through after the contingency period has expired, the deposit is generally forfeited to the seller as compensation for damages. The seller is then entitled to 10% of the purchase price, because the buyer has failed to meet their contractual obligation. If the sale falls through within the contingency period, the buyer receives the full deposit back.
It matters who is responsible for the sale falling through:
- Buyer withdraws without a valid reason: the seller is entitled to the deposit as compensation for damages.
- Buyer invokes a contingency: the sale is cancelled and the buyer receives the deposit back.
- Seller withdraws: the buyer receives the deposit back and may additionally claim compensation of 10% of the purchase price from the seller.
The notary holds the funds and only releases them once it is clear who is entitled to them.
Can a seller claim the deposit as compensation for damages?
Yes, a seller can claim the deposit if the buyer fails to meet their obligations and the contingency period has already expired. In that case, the deposit serves as fixed compensation of 10% of the purchase price. The seller does not need to demonstrate their actual losses in order to claim this amount.
This right to compensation is explicitly set out in the standard NVM purchase agreement. The seller has two options:
- Claim the deposit as fixed compensation of 10%.
- Demand performance of the purchase agreement through the courts, potentially supplemented by a claim for additional damages if the actual loss exceeds 10%.
The seller cannot pursue both options simultaneously. If you opt for the deposit, the damages matter is considered settled. If you want additional compensation, you must pursue that through the courts and prove your actual losses.
When does the buyer get the deposit back?
The buyer gets the deposit back at the time of the legal transfer at the notary’s office. The amount held in the escrow account is then offset against the total purchase price. The buyer pays the remaining purchase price and the deposit is applied toward it. The buyer does not literally receive the amount back — it is offset against the purchase price.
There are situations in which the buyer does receive the deposit back directly:
- The sale is cancelled on the basis of a contingency, such as failure to obtain financing.
- The seller defaults and the sale falls through due to their actions.
- Both parties mutually agree to cancel the purchase agreement.
In all of these cases, the notary returns the deposit to the buyer, after both parties have given written consent or a court has issued a ruling.
How we help with the sale of your home
Selling a home involves more than signing a purchase agreement. The deposit, contingencies, and notary process are all parts of a larger whole in which every step matters. Urban Homies guides you through the entire sales process, from the initial valuation to handing over the keys at the notary’s office.
What we do for you:
- Valuation and market research so that your home is listed at the right price.
- Professional presentation with photography and a tailored listing.
- Negotiation support including advice on the deposit and purchase conditions.
- Full process guidance from strategy to notary and aftercare.
Want to know what your home is worth or how we approach the sales process for you? View our sales support services or get in touch for a no-obligation conversation.
