What is token money?

Once a home purchase deal is finalised between a buyer and a seller, a formal process is initiated to conclude it legally. This starts with the buyer paying the seller a small portion of the transaction value, to show his genuine intentions. This payment, in Indian real estate parlance, is commonly known as the &#;token amount&#;.

In the northern region, this payment is known as bayana(बयाना).  The term bayana basically denotes the advance payment that the buyer has already made, to show the seriousness of his intent in purchasing the property. It is a certain percentage of the deal amount that the buyer pays to the seller, in good faith.

The payment and receipt of this token amount is a standard practice, irrespective of the type of property or deal value.

Since the buyer pays this money to show his genuine interest in the property, this amount is also referred to as the &#;advance deposit&#; or &#;earnest deposit&#;. Other terms used are &#;binder&#; or &#;good faith deposit&#;.

See also: How is money refunded when a property deal is cancelled

When is token money paid?

The token money is paid when the buyer and seller reach a verbal agreement to conclude the deal. At this stage, the paperwork is yet to start. While there are no written rules about it, another standard practice in India’s real estate market, is that the sellers get to forfeit the entire amount, if the buyer backtracks from his verbal promise. The seller, on the other hand, will have to return the token money to the buyer, if he cannot complete the transaction, because of any reason.

How much money has to be paid as token amount?

There are no fixed rules pertaining to the amount that the buyer has to pay to the seller, as token money. This amount differs from case to case. &#;A buyer pays a part of his down payment for the property as the token money, in case he is buying the property from a developer. So, if a buyer plans to pay Rs 10 lakhs from his own pocket for the purchase of a property that is worth Rs 50 lakhs, he would typically give the developer Rs 1 lakh as the token or booking amount,&#; explains Gaurav Singhal, a Delhi-based property broker.

It is pertinent to note here that the token amount is only a part of your down payment and the two terms cannot be used interchangeably. The down payment is the amount you pay upfront to buy a property. The token amount is just a part of it.

Can token money be refunded?

If, for any reason, the buyer fails to complete the transaction, the seller would forfeit the token money, unless the parties have made a notarised agreement stating otherwise. &#;The token amount is usually paid by the buyer to the seller, directly after the verbal commitment. At this stage, most buyers fail to pay attention to the paperwork, since it seems like an unwanted hassle. However, a notarised document would come handy, as proof that the token money has been paid to the seller and also lay the ground rules for the purchase,&#; says Manoj Kumar, a Delhi-based lawyer who specialises in property registrations.

However, as this document does not have a legal validity, because it has not been registered, it mostly acts as a proof of payment, rather than a legal document that could be produced in court, in case of a dispute. The buyer and the seller enter into a registered contract, only when the buyer pays at least 10% of the deal value and a builder-buyer agreement or an agreement for sale is signed between the two parties.

How to pay token money?

As there is hardly any way to ensure refund of the token money, in case the property purchase fails, the buyer must keep the token amount as low as possible and commit to a seller, only after making all monetary arrangements to complete the transaction. For example, it could be risky to pay the token money, unless the bank has approved your home loan application.

See also: COVID How to accept token money online?

Ascertain the credibility of the seller before paying the token money and avoid making the payment in cash. If you pay the token money through banking channels, the seller would not be able to prove otherwise.

FAQs

In this case, the Bid Security as required by ITB Clause 15 shall be submitted for each lot or item separately.

The Bidder shall submit a Bid Securing Declaration1 or any form of Bid Security in the amount indicated in the BDS, which shall be not less than the percentage of the ABC in accordance with the schedule in the BDS.

Bid Security as required by ITB Clause 15 shall be submitted for each contract (lot) separately.

Total number of trips to deliver above mentioned quantity of materials:Per trips transportation fee including wages to labor and applicable tax:Total transportation cost including tax: Rs. ……………………… In word Rs, ……………………………………………………………… …………………………………………………………………………………………………………………………………….Name: Signed: Date:In the capacity of (Position):Duly authorized to sign the Bid Security for and on the behalf of ………………… Price ScheduleThe unit price of items provided by bidder will be used for evaluation of the bid.

Bid Security

earnest money deposits in Telugu

earnest money deposits తెలుగు, Telugu

earnest money - Meaning in Telugu

Definitions and Meaning of earnest money in English

earnest moneynoun

1. money given by a buyer to a seller to bind a how do olympic athletes make money while training of earnest money

   arles

   Description

   An earnest payment or earnest money is a specific form of security deposit made in some major transactions such as real estate dealings or required by some official procurement processes to demonstrate that the applicant is serious and willing to demonstrate an earnest of good faith about wanting to complete the transaction.

   Also see "Earnest payment" on Wikipedia.

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English to Telugu Dictionary: earnest money

Definitions and Meaning of earnest money intranslation of earnest money in Telugu language with similar and opposite words, earnest money deposit meaning in telugu. Spoken pronunciation of earnest money in English and in Telugu.

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What earnest money means in Telugu, earnest money meaning in Telugu, earnest money definition, explanation, pronunciations and examples of earnest money in Telugu.

Also see: earnest money in Hindi

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