Real Estate Deal Deposits seem to be one area of the real estate process that leaves many people feeling confused.
Many Buyers are not aware that a deposit is a necessary component of purchasing a home.
Once an offer to purchase is accepted, a deposit will be required to firm up the purchase.
Deposits can range in value, and are typically due ‘herewith’, ‘within 24 hours of acceptance’ or in otherwise described terms, for instance, within 5 business days. The time period will have been specified on the Agreement of Purchase and Sale.
You can read more about the intricacies of deposits in my Blog Post ‘Buyers, Don’t Forget the Deposit‘.
Once you have an accepted offer in place, you might be wondering how best to tender your deposit, where exactly does it go, and what happens to it.
Deposits are tendered to the Listing Brokerage, and can be in the form of cheque, money order, or E Transfer. The funds are deposited directly to the Listing Brokerage’s Trust Account, and are generally forwarded to your Lawyers Office once the deal is firm and will then be itemized on the trade document and used toward disbursements.
Cash or E Transfers directly to your Real Estate Agent will not be accepted. It is very important that the funds have a paper trail and are deposited directly to the Listing Brokerage Trust Account. Information needs to be very clear in such an event that the Brokerage is audited.
What happens to your deposit if you are unable to meet the conditions of your offer? In a case such as this, the deposit is returned in full to you, once the funds have cleared the Brokerage Trust Account.
If you are unclear of any aspect of the deposit process, please do not hesitate to clarify the details with your Real Estate Agent, or in the case of a private sale, with your legal team.
Deposits in Real Estate are actually very straight forward, but are often an area that seems to be confused within the process.
I hope that this Blog Post helps to clarify the process surrounding deposits.