Deposit ("zadatek") on a flat and no mortgage

Buying a house or flat most often involves taking out a mortgage. Such a commitment is in turn inseparably linked with making an advance payment ("zaliczka") or paying a deposit ("zadatek"). Unfortunately, it happens that the deposit on a flat has already been paid, and the way to the dream property is blocked by the lack of a mortgage. What can we do as consumers in such a situation, and is the amount already paid lost for good?

• When can the deposit on a flat be lost?
• Deposit versus advance payment
• No mortgage is ever certain
• Always plan ahead
• Negotiate
• Concessions
• Important tips

When can the deposit on a flat be lost?

As a rule, the terms of the agreement concluded between the seller of a property and its buyer are set out in the preliminary agreement (umowa przedwstępna). This document describes the details concerning the deposit and the rules that apply if there is no mortgage. It is also where the parties agree when the amount paid is forfeited. What should be done in the various situations that arise between the two parties to the transaction? It is worth asking, because there is a whole range of them.

Deposit versus advance payment

At the very outset we need to distinguish between the concepts of "zadatek" (deposit) and "zaliczka" (advance payment). They are sometimes used interchangeably, but the differences between them are fundamental. A deposit can be lost for good. When a preliminary agreement is drawn up and a deposit is paid, and the transaction does not take place through the buyer's fault, the buyer loses the money. If the seller changes their mind, they return double the value of the deposit. In the case of an advance payment, the reasons why the transaction does not take place do not matter. The seller is obliged to return the money. Most importantly, however, paying any amount to the seller is not an obligation of the buyer.

No mortgage is ever certain

The question of a deposit paid towards a flat is enormously important, as it often involves considerable sums. The cash may be lost if the bank's representatives simply do not agree to grant a mortgage. There are, moreover, many circumstances that adversely affect the chance of buying a property. It is worth discussing this issue with an experienced credit adviser. If they are properly informed, they can offer advice that gives us certainty about the further steps we should take.

READ ALSO – HOW TO BUY A FLAT ON THE SECONDARY MARKET STEP BY STEP

Always plan ahead

When trying to buy a property and obtain a loan, it is not worth relying on assumptions about receiving the required amount. It is a bad approach when an advance payment is made first, and only later is the chance of getting a loan analysed. The order of actions should be exactly the opposite. First of all, you should examine your own creditworthiness. It is also good to find out which bank will grant us a mortgage and for what amount. This is key, because the preliminary agreement drawn up later is a document binding both parties to the transaction, and before signing it you should be certain where you stand.

Negotiate

We already know that making an advance payment or paying a deposit is not a formal requirement on the part of the buyer, but most banks certainly require it. For them such a borrower becomes much more credible. It should be remembered that when drawing up the preliminary agreement, we can negotiate. Let us try to agree on the lowest possible deposit, in order to minimise the risk of losing a large sum of money. It is worth discussing not only the amount of the payment. We can also change its form. The difference between an advance payment and a deposit described earlier comes in handy here. The first form of payment is much safer than a deposit, because it can be returned regardless of whose fault it is that the transaction is not completed. On the other hand, if we make an advance payment, the seller may find another buyer for our dream flat, and it will go to them. In this case a deposit may be a much better choice.

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Concessions

When drawing up the agreement, it is worth stipulating in it that the seller to whom we have paid the money must return it if the bank does not grant us a loan. This is a useful arrangement when paying a deposit. On the one hand, the seller cannot make the property available to anyone else, and on the other we gain certainty that we will get the money back if the loan is not granted to us. It is also possible for the amount paid to be split into an advance-payment part and a deposit part. In this situation both parties to a transaction structured this way have some protection.

Important tips

A situation in which we have paid a deposit but have not received the loan we applied for is a difficult one. To get through it, it is good to remember a few rules. First of all, we should discuss our financial situation with a trusted credit adviser, who will help carry out the appropriate analysis and show what chances we have of getting a loan. Second, we should gather as much data as possible about the property being bought. With this information, the adviser will tell us whether they see any potential risks. Third, the amount of the deposit should be thoroughly thought through and analysed, so as to take into account our financial situation and creditworthiness.

Whether you are buying a flat in Chorzów or in Gdańsk, the question of the deposit on a flat should be carefully considered. As you can see, it is of fundamental importance when there is no mortgage. Analysing this issue with the help of an experienced adviser makes it much easier to make a good decision. For advice, it is worth turning to the professionals at REMAX Gold, who will help you take the important steps.