The deposit is generally paid by the buyer to the seller’s agent. This happens either when the buyer makes their offer or by the date stated in the contract of sale. The deposit is held by the seller’s agent, conveyancer or legal practitioner, in a trust account, until settlement.
A seller who does not have an agent and who receives a deposit must pay it to their legal practitioner or conveyancer, or bank it in a special purpose account in an authorised Victorian deposit-taking institution. The account must be in both the seller’s and the buyer’s name.
In certain circumstances, the buyer may release the deposit money to the seller before settlement. In this case, the contract must have become unconditional and the buyer must be satisfied with the proof of debts information – that is, a statement by a seller detailing any mortgage or any other loans relating to the property. When this occurs, the deposit can be released no earlier than 28 days after the date the contract was signed.
Source: Consumer Affairs Victoria