Recently having had a discussion with a potential client about this type of "deposit" sometimes requested from REA's, I thought I would clarify for those of you who are unsure about exactly what this payment means in legal terms. When submitting an offer on a property some agents will ask for what is referred to as a "holding" or "expression of interest" deposit. This doesn't mean that the property is yours or that it gets taken off the market (which happens upon exchange of contracts) The seller or agent can take as many "preliminary" deposits as they like, however, if you hand over a cash amount for such a purpose (often to convey your seriousness to the vendor) the agent is then legally obliged to provide you with a receipt and inform you in writing that: They have no obligation to sell the property to you You have no obligation to buy the property They will refund this expression of interest deposit if you don't end up entering into a contract to buy the property. The agent must also let you know if someone else makes a later offer on the same property. (information taken from the Dept of Fair Trading site) This knowledge begs the question, then, as to why REA's would bother asking for such useless deposits? They mean nothing, are fully refundable and obligation-free! The reality is, however, that once potential purchasers hand over money (no matter if it's a small amount like $500) the more tangible the commitment then becomes to the buyer. It appears that psychology plays a big part here in cementing the sale, in the mind of the purchaser.