What is the upfront amount paid at auction that may be forfeited if the buyer does not proceed?

What is the upfront amount paid at auction that may be forfeited if the buyer does not proceed?

• A. Commission
• B. Stamp Duty
• C. Deposit
• D. Legal Fees

Answer: (C)

At an auction the upfront sum is the deposit. It is paid when the bid becomes binding and is held as security to complete the purchase. If the purchaser does not proceed to exchange/completion as required, the seller can keep the deposit as damages for breach of contract. The typical deposit is around 10% of the purchase price, though the exact amount is set out in the auction terms. Commission goes to the agent and is not forfeited by the buyer's breach; Stamp Duty is a tax due after the purchase/transfer of ownership, not an upfront amount at auction; legal fees are costs charged for handling the transaction, not security held by the seller.

At an auction the upfront sum is the deposit. It is paid when the bid becomes binding and is held as security to complete the purchase. If the purchaser does not proceed to exchange/completion as required, the seller can keep the deposit as damages for breach of contract. The typical deposit is around 10% of the purchase price, though the exact amount is set out in the auction terms. Commission goes to the agent and is not forfeited by the buyer's breach; Stamp Duty is a tax due after the purchase/transfer of ownership, not an upfront amount at auction; legal fees are costs charged for handling the transaction, not security held by the seller.