What is a Deposit and when do you need it?
Thursday Oct 11th, 2018
What is a deposit and when do we need it?
Deposit is firstly, sign of a good faith and sincerity by a Buyer to purchase property and secondly, it represents part of the downpayment and is part of purchase price for the property. There is no mandatory amount for deposit but, the higher amount it is, more serious Buyer is.
Deposit is usually made in two ways. One is “at the earliest opportunity and up to 24 hours after acceptance of the offer (with some exception) and second option is, WITH the Offer. (That option is often used when offer is presented in multiple offer situations).
Lately, almost all real estate brokerages will accept only certified bank drafts or certified cheques and this option is more reasonable for the Buyers too, since the deposit money in the case of mutual release on the agreement, will be returned sooner than if it was a regular cheque.
Deposit amount can come from one bank account, or it can come from few different accounts. You don’t need to transfer money from different banks and/or accounts to one and then do the deposit certified cheque/bank draft. I.e. if you need $20,000 deposit. You can have two cheques of 10K each, from 2 different banks or accounts.
Also, Please note that deposit amount is usually held by Listing Brokerage in trust account and on the completion date (more known as "closing date") this amount will be applied toward Buyers' down payment on the property.
For more information and clarifications, please feel free to contact me anytime.
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