One thing to remember when buying a house, is that you will need to submit a deposit once you have an accepted offer to purchase in place.
The deposit is what legally ‘firms’ the deal, and generally is to be submitted within 24 hours of an accepted offer. Other arrangements can be made, but must be specified within the Agreement of Purchase and Sale. For instance, if you live out of town and are mailing a cheque, you may indicate that the deposit will be given within 5 business days. Or, if you are submitting the deposit with the offer, you would indicate that the deposit is being given ‘herewith’.
Deposits at one time could be paid in ‘cash funds’. Now, deposits are to be paid through cheque, money order, or e transfer. You will be provided with a receipt of funds for your records.
In some cities, Real Estate deposits are quite large and substantial. In Thunder Bay, generally deposits are $1000 minimum, and up, depending on the property and circumstances of the offer. You should discuss expectations with your Real Estate Agent at the onset of finding a home. In competition, it can be helpful to have a larger deposit.
The deposit is taken by the Listing Brokerage and is held in the Brokerage Trust Account to be forwarded to the Lawyer of the Buyer once the offer is firm. Your Lawyer’s office will apply the deposit towards closing costs, and it will show as a disbursement on the statement of adjustments that they will prepare for you.
Should your offer fall through- for instance, the conditions of your offer are not met, the deposit is returned in full to you (this is outlined in the actual Agreement of Purchase and Sale). You will have to wait until the funds have cleared the Brokerage Trust Account at which time the funds will be disbursed back to you.
I often find that the deposit is one of the items most likely to be forgotten in the planning stage when embarking on a home buying journey. Buyers, especially First Time Buyers have much to remember, and lots of new information to digest.