Token / Advance Money Receipt (Word draft)
The one-page receipt that says what the token holds, for how long, and on what terms it is refundable — before the money moves.
Token money is where buyers lose money, and it is almost always because of what the receipt did not say.
A token paid against a WhatsApp message and a scrap of paper holds nothing. The three questions that matter — what it holds, for how long, and under what conditions it comes back — have to be answered before the payment, because afterwards the seller has both the money and the leverage.
This is a single page. It takes four minutes to fill in and it is the cheapest protection in a property transaction.
What is in the file
- Parties, property and the exact amount, in figures and words, with the payment mode and reference
- What the token holds — the agreed price and the property taken off the market
- The validity period and the date by which the agreement to sell must be executed
- Refund terms, written explicitly in three cases: title defect, loan refusal, and either party withdrawing
- The seller's undertaking not to negotiate with anyone else during the validity period
- Space to record who holds the token, and the documents to be produced meanwhile
Answer the three questions in writing
What does it hold? The price, and the property off the market. Say both.
For how long? A date, not "a few weeks". Fourteen to thirty days is normal, ending on the date the agreement to sell is to be signed.
When does it come back? The three cases that actually arise: the title check finds a defect, the buyer's loan is refused, or one party simply changes their mind. Each needs its own answer.
Pay through the bank
Never in cash. A bank transfer with a reference on the receipt is the difference between a payment you can prove and one you cannot.
Do not skip to the agreement to sell
If the parties can sign a full agreement to sell straight away, do that instead and pay the advance under it. The token receipt exists for the gap when the buyer wants the property held while the lawyer works — which is a real need, and needs its own paper.
Questions
Is token money refundable?
Only on the terms you write down. There is no default rule that protects a buyer who paid against a verbal understanding, which is exactly why this receipt spells out three separate refund scenarios.
How much token is normal?
It varies by market and ticket size. What matters far more than the amount is that the terms are written before it is paid, and that it moves through a banking channel.
Does a token receipt need to be on stamp paper?
Practice varies, and a simple receipt is commonly used. Where meaningful sums are involved it is worth asking a lawyer whether it should be stamped in your state, because an under-stamped document can face difficulties in evidence.
This is a working template, not legal, tax or financial advice. Requirements differ by state and by transaction — have a lawyer and a chartered accountant confirm anything that matters before you or a client rely on it.
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