Deposit or Down Payment? – What Every Buyer and Seller Should Know
When buying or selling real estate, the question often comes up: should we agree on a deposit or a down payment?
It makes a big difference, as the legal consequences are not the same!
Down Payment (Előleg)
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The first installment of the purchase price.
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Always counts toward the total purchase price.
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If the deal falls through → the down payment must always be returned to the buyer.
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Does not serve as security for the seller.
Best for:
Buyers who are not 100% sure about their financing (e.g. waiting for a bank loan).
Deposit (Foglaló)
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Part of the purchase price, but also a security for performance.
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If the contract is fulfilled, it is credited toward the total price.
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If the buyer is at fault → the deposit is forfeited (the seller keeps it).
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If the seller is at fault → the deposit must be returned in double.
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If neither party is at fault → the deposit is simply returned once.
Best for:
Sellers who want security from the buyer, and buyers who want to firmly reserve the property.
In Short
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Down payment = safer for the buyer
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Deposit = safer for the seller
Both can only be validly agreed upon in a signed contract or preliminary contract.
👉 Tip: Always have the contract drafted by a lawyer, so it is clear whether the money given is a deposit or a down payment.
