Final answer:
A deposit for a property is usually paid to a depository institution and can be made in various forms, including bank cheque or electronic transfer. Payment is typically expected on the date of contract exchange, and delays can lead to penalties or complications. Communication with the seller is key if there's an expected delay in payment due to international fund transfers.
Step-by-step explanation:
The deposit for a property is typically payable to the depository institution or the entity facilitating the sale, such as a real estate agency's trust account. Payment of this deposit does not necessarily have to be made by bank cheque; it can also be made via electronic transfer or other agreed-upon methods. The demand deposit, a checkable deposit in banks, offers flexibility as it allows for immediate withdrawal or payment by writing a cheque. However, when it comes to the exchange of contracts for a property, the deposit is often expected to be paid on the date of exchange.
Delaying the payment of the deposit can pose problems as it is generally part of the terms agreed upon in the contract, and deviating from these terms can lead to penalties or loss of property. It is crucial to communicate with the seller or their representative if there will be a delay in payment due to funds arriving from overseas, like Singapore in this case. To diversify risk, some might choose to secure a more stable form of deposit, such as a certificate of deposit (CD), which holds money for a fixed period and typically offers a higher interest rate, although there's a substantial penalty for early withdrawal.