The deposit when buying a home

The real estate market in Switzerland is fiercely competitive – once you’ve found your dream apartment or the perfect home, you want to secure it for yourself as quickly as possible. This is where the reservation fee comes into play: It binds both sides and ensures the property remains reserved for you, while you clarify the next steps – such as financing – at your leisure. But what does this fee really mean, and what should you pay attention to?

Definition

The reservation fee is a deposit made when concluding a reservation agreement for a property. It signals your serious interest in buying and holds the property for you for a defined period. The amount will later be offset against the purchase price if you proceed with the purchase. If you withdraw from the agreement, it can be reclaimed in whole or in part, depending on the conditions.

How it differs from equity

The reservation fee should not be confused with the equity required to obtain a mortgage (usually at least 20% of the purchase price). The deposit on the reservation agreement is a much smaller amount that is due before the actual purchase contract.

Purpose

For buyers, the reservation fee is an opportunity to reserve the desired property for a certain period while they clarify financing. For sellers, it indicates the seriousness of the buyer’s intent and justifies temporarily taking the property off the market.

There is no legally fixed sum for the deposit on a house purchase – rather, the reservation fee is based on market customs and individual agreements. To help you assess what to expect, here are the most important benchmarks and influential factors.

Usual range in Switzerland

The amount of a reservation fee varies depending on the property and region. For standard properties, it is usually between CHF 5,000 and CHF 50,000. For upscale properties, amounts of CHF 30,000 to CHF 50,000 are common, while for luxury properties or new construction projects, deposits of CHF 50,000 to CHF 150,000 may be required.

Calculation basis

The reservation fee is often set as a percentage of the purchase price – usually between 1% and 5%. For a purchase price of CHF 1 million, this corresponds to a deposit of CHF 10,000 to CHF 50,000.

Influential factors

The exact amount depends on various factors: the value of the property, your negotiating position, the current market situation (buyer’s or seller’s market) and whether it is a new build or an existing property.

Anyone who reserves a property wants to be sure that their deposit is in good hands – and can also be reclaimed in case of doubt. With the right safeguards, you can protect yourself from financial risks and unnecessary trouble. Below you will find the main ways to safeguard your reservation fee.

Even if both parties start with the best intentions, it can happen that the property purchase does not go through. Reservation agreements are generally not binding as they are usually not concluded in front of a notary. This means that both the buyer and the seller can withdraw at any time. What is decisive is what was agreed in the written reservation agreement – and whether this meets formal requirements. The legal situation is clearly regulated and protects the buyer in many cases. But what happens to the reservation fee already made if one of the two parties withdraws?

Yes, the reservation fee will be fully credited towards the purchase price upon successful completion of the purchase. This means: For example, if you have already paid CHF 20,000 as a reservation for a property with a purchase price of CHF 1 million, you must later provide CHF 180,000 in equity (in the case of a 20% equity requirement). It is important that the reservation fee is explicitly recorded in the purchase contract in writing. This way you can keep track of your equity and avoid surprises when completing the purchase.

There are also some pitfalls that you as a buyer should definitely be aware of when it comes to the reservation fee. If you are aware of the typical risks, you can avoid them and protect yourself against unpleasant surprises. In particular, do not sign any clauses that would result in the complete forfeiture of the fee in the event of a withdrawal – such conditions are usually unenforceable and unnecessarily increase your risk.

The reservation fee is a central tool for expressing your interest in a property and to secure it while clarifying financing. With the right protection – ideally an escrow account or a bank guarantee – you, as a buyer, significantly minimize your risk. Remember: A reservation fee without notarization is not legally binding.

Make sure the amount of the deposit is appropriate. Always transfer payments to the rightful owner and have all agreements confirmed in writing. If you withdraw, you are generally entitled to a refund, minus any verifiable costs. Avoid excessive deposits and payments to third parties.

It is best to use our checklist to check all the important points and to ensure your money is secure. This way, you go into the property purchase well-prepared and with confidence.

Note: This article does not replace individual legal advice. In case of doubt, seek advice from a professional (e.g. a notary or lawyer).