The Deposit | Costs when Buying a Home
You have found the home of your choice, you have crunched some numbers and now you are ready to make an offer.
Your agent will request a deposit on behalf of the Seller upon signing of an accepted offer. Your agent will send the deposit and all the other documents to the seller’s agent. Your deposit will remain in the seller’s brokerages’ trust account until the deal closes.
The Deposit proves to the seller that you have a genuine interest in buying their property and that you are a serious buyer.
The amount of the deposit can vary for many reasons: the purchase price of the home, the area you live in and your particular situation. A larger deposit can give you the upper hand in the buying transaction when there are other buyers interested in the property.
The amount of the deposit is outlined in your Purchase and Sale Agreement. When you put down a deposit, it will be held in trust and is considered to be part of your down payment. The amount of the deposit will be deducted from the purchase price of the offer.
The seller has no right to your deposit until all conditions of the purchase and sale agreement have been met and the deal finalizes. If all the conditions of he agreement are not met and the agreement does not finalize, your deposit is returned to you.
When you sign the offer, you need to understand that it is legally binding. If the offer has been accepted by the seller and you have signed the Offer to Purchase, you must follow through with the agreement.
If you decide not to buy the home, you are at risk of losing the deposit and possibly being sued for loss of sale.
Your second Cost is your Down Payment which is not the same thing as your Deposit.
Approximate Cost: Varies Depending on Circumstances