Here are some tips on paying a deposit on a real estate purchase:
- The deposit is not paid until the offer is accepted, and you can usually agree to pay it within 24 or 48 hours of acceptance. It does not need to be certified funds.
- Refusing to pay the deposit does not automatically cancel the deal. If you don’t want to buy, don’t put in an offer. However, if you are late on the deposit, the seller has the right to cancel the deal.
- The amount of the deposit will vary depending on where you are buying and how much the purchase price is. In Barrie, it is common to see between $1,000.00 and $5,000.00 on an average house, but the deposits increase drastically the closer you get to Toronto.
- The deposit must be paid to the seller’s agent or lawyer. This is to protect the deposit as it is held in trust; it prevents the seller from disappearing with it.
- If the buyer does not complete one or more conditions and the deal goes dead, the buyer does not automatically get the deposit back. Both buyer and seller will need to sign a mutual release; sometimes this happens right away, and sometimes there is some negotiating first. To guard against this, you could make a small deposit on acceptance and a larger one on completion of conditions.
Be sure before you put your money down. It’s more costly to change your mind later.
