When you submit an offer on a property and the agents asks for a deposit. Do you know when and why that deposit is required?
Our team works with many first time home buyers & we always work with our clients to help them be prepared when submitting an offer. Deposits have always been a big question & a misunderstanding of when funds are required. Lets chat about Deposits.
What is a deposit for?
When a buyer submits an offer on a property, a deposit is requested once the offer is accepted. A deposit is provided from the buyer to the seller as a token of the buyer’s assurance and intention to buy the subject property.
Is my Deposit & my Downpayment the same thing?
While the terms “deposit” and “down payment” are often used interchangeably, they are different.
At the time of the offer, the buyer should come prepared to make a deposit on the home they hope to buy. The deposit will be rolled in with your down payment, and shows the seller that you’re serious about buying the home and have your finances in order.
How fast am I required to give a deposit?
Typically, written in the offer has the timeline required to give your deposit to the Listing Brokerage’s office. The most standard is within 24 hours of accepted, or at times, some buyers will give the deposit as a bank draft with the offer.
Can I drop off cash as a deposit?
There are may different ways to drop off your deposit to the Listing Brokerage office, however Cash is not an option. Typically, you can drop off in person to the Listing Brokerage’s office with a bank draft or certified cheque. Thanks to online banking, some Brokerages can also do deposits via E-transfer, Bill Payment or of course Wire Transfer.
Note that if you choose to Wire Transfer there is usually a fee associated on top of your deposit, and in terms of Etransfers, many banks have a maximum daily Etransfer allowance.
How much money do I need for a deposit?
There’s no standard deposit amount. It will vary based on the type of property and how badly the buyer wants this particular home. The way the deposit is handled also varies by province, but it’s generally given to the seller’s agent, to be held in trust until the deal is firm.
In previous years, the deposit used to be around $1,000 in Simcoe County, but we are seeing a more common amount of a minimum of $10,000 and up. The more expensive the home, the higher the deposits Sellers & Realtors like to see in an offer.
Summary
Cliff Note Version – Make sure to have funds easily accessible for when you find the right home. Speak to your Realtor about the standard amount that you will likely require depending on your budget.
Happy House Hunting!
Your Simcoe County Real Estate Team,
Heather Beauchesne & Mariale Schrobback
Hearth & Home Team @ Re/max Chay Realty Brokerage
