The deposit, gifts and family money
The deposit is not one payment. There is the amount you pay when the agreement goes unconditional, usually to the agent, and then the balance of your own money at settlement. If parents or family are helping, how that help is recorded decides whether the bank accepts it and what happens if a relationship ends.
What it is
In most New Zealand purchases the deposit is 10% of the price, paid to the real estate agent's trust account once the agreement is unconditional. The agent holds it for ten working days, takes their commission, and sends the rest to the seller's lawyer. At settlement you then pay the balance of your contribution, with your bank paying the rest.
Why it matters
Buyers often plan for one lump sum and then find the money is needed in two places at two different times. If KiwiSaver is part of the picture, it may only be available for one of those payments. And if a gift from family is involved, the bank will want to see it recorded properly before it approves the loan.
How we handle it
We map where every dollar is coming from and when it needs to land: savings, KiwiSaver, gift, loan. For family money we prepare either a deed of gift or a deed of acknowledgement of debt, so everyone is clear whether it is a present or a loan. That document protects the parents as much as it protects you.
Common traps
- Agreeing a 10% deposit when you only have 5% in cash and the rest is in KiwiSaver.
- Paying the deposit before the agreement is unconditional. Only do that on an auction or an unconditional offer.
- Parents handing over money with nothing in writing, then needing it back later.
- Forgetting that the agent's commission comes out of the deposit, which affects the settlement statement.
Not sure how this applies to you?
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