Let’s Talk Real Estate Deposit
Did you know that when you submit an offer and that offer gets accepted, you are to give a deposit to the listing brokerage within 24 hours of the accepted offer or as otherwise described in the offer?
As part of the real estate transaction, the deposit is to provide security to the seller in the act of good faith that the buyer has a financial stake in the agreement. If your offer is conditional (finance, inspection, or any other condition), the clause would state that in the event that the conditions are not met during the conditional period, the buyer is to receive the deposit back in full without any penalty.
What Is A Standard Deposit Amount?
There is no “set” standard deposit amount when purchasing a home, however in certain areas such as Toronto, most deposit are around 5% of the purchase price.
Just a few years ago, in Simcoe County, we saw a standard deposit of $1,000. Depending on the price point of your purchase, we are seeing a standard of minimum $5,000 for the lower end homes and condos up to $50,000 and over in the higher price points. On average, I would say that I see most deposits around the $20,000 mark.
Truth: The higher the deposit, the more attractive the offer.
Make sure to have your funds ready to go when you are ready to put in an offer.
How Do I Submit A Deposit?
Once your offer is accepted and it is time for you to submit your deposit, there are a few various ways that you can proceed. Especially with Covid, Brokerages have taken extra measures to ensure a quick and easy process for deposits. Some brokerages, such as mine at RE/MAX Hallmark Chay, you can submit your deposit thru the “Pay Bill” method with online banking which does not have a limit. If you are able to give a smaller deposit, you can do an E-transfer, however most online banking have a maximum of $2,500 for transfers. Other options are Bank Draft, Certified Cheque or a wire transfer. Some of the other options may have an additional cost however as long as you get your deposit handed in within the allotted time, the better.
Have Other Questions?
Whether you’re a first-time homebuyer, a seasoned investor, or someone in between, please reach out to our team with any question that you may have. We look forward to hearing from you.
Heather Beauchesne & Mariale Schrobback
Your Local RE/MAX Real Estate Team Serving Barrie, Innisfil, Essa, Springwater, New Tecumseth, Wasaga Beach, Clearview, Adjala, & Oro-Medonte