Why Pay a Holding Deposit on a Retirement Village Home?
Once you've chosen a retirement village, you may have a wait before a suitable home is available. You may go on the village's wait list so that you're in line for a home when one comes free. At some stage, a member of staff may contact you to ask if you want to pay a holding deposit.
What is this deposit for and what are the advantages of agreeing to pay it?
What Is a Holding Deposit?
When a retirement village property falls vacant or a resident gives notice that they are about to sell up and move, the village's administration wants to sell on the property as soon as they can. So, the community manager may make a holding deposit offer to someone on the waiting list.
If you get this kind of offer, then the deposit holds the property open for you. The village commits to reserving it in your name. It won't market the home to anyone else while they have your money. Once the property is available, you can then start the buying process if that is what you still want.
What Are the Advantages of Holding Deposits?
While sitting on a wait list will eventually get you a home on the village site, this doesn't always mean that you get the home you want when it is available. People snap up properties in popular retirement villages quickly. If you don't move fast when one is available, then someone could pip you to the post.
If you pay a holding deposit, then you know which home you'll get. Villages can only take these payments on empty properties or ones that are about to be vacated. You get peace of mind that nobody else will get a chance to buy the home you're offered before you do.
Your money should be secure here. Usually the village puts deposits in trust accounts. The money stays there until you decide what to do.
So, for example, if you go ahead with the purchase, then the deposit might come off your overall payment costs. Or, if you change your mind, then you should be able to get the deposit back.
While retirement communities often use holding deposits, the rules that govern these payments may differ depending on the village and your state. So, talk to the manager or admin staff before you decide whether to make the deposit. Ask to see a written breakdown of what happens if you buy the home or if you decide not to.