What happens to the deposit when my house sells?

Where it sits

Under section 122 of the Real Estate Agents Act 2008, the agency holds the money in a trust account at a bank carrying on business in New Zealand. A trust account is an account holding client money, kept separate from the agency's own funds.

Until it is properly accounted for, the deposit is not the agency's money and it is not yet yours. It is held for whoever turns out to be entitled to it under the agreement.

The 10 working day rule

Section 123 says money received for a transaction cannot be paid to any person for 10 working days after the date it was received. The period runs from receipt, not from the date the agreement goes unconditional.

Money can only be released earlier on a court order, or on an authority signed by all the parties to the transaction. In practice that means a release before the period ends needs the buyer's agreement as well as yours.

If something goes wrong

If written notice of an objection to title is received, the money continues to be held. It stays held until a court order, or an authority signed by all the parties, directs who it is to be paid to.

That is the protection working as intended. It also means a dispute over the sale keeps the deposit where it is, rather than leaving either side to chase it afterwards.

Any interest earned on the money while it is held is paid to the person entitled to it.

What comes out of it

What is deducted from the deposit when it is accounted for depends on the agency agreement you signed. That agreement sets out the fee, any administration or transaction charge, and whether marketing is deducted at that point or invoiced separately.

Read those clauses before the campaign starts, not after an offer arrives. The deposit is usually the first money in the transaction, so the terms attached to it shape what you actually see and when.

How it fits the rest

The deposit is part of the purchase price, not an extra payment. At settlement, the balance of the price is paid after the deposit is credited against it, and your settlement statement will show the two figures together.