When buying a property which is often your single largest invesment in your life, it’s a good idea to know your numbers backwards and forwards. In this article I am going to talk about deposit on purchase.
Deposits are required on purchase & sale agreements when you become the successful bidder on the property. It shows that you are serious about buying the property and illustrates what you are willing to lose should you break the legally binding contract. While there is no fine line about the amount of deposit required, generally it is between 5-10K and is due shortly after you have become the successful bidder.
These deposits are held by the vendors (seller) agent’s brokerage in a trust account. These deposit are not used by the brokerage for any expenses and are frequently audited to confirm this. Brokerage are required to insure the deposits up to 100K to prevent lost due to the unlikely event of the insolvency of the brokerage.
Lastly your deposit forms part of your down payment and closing costs upon closing. Please confirm this with your solicitor upon closing and check to make sure that it has been recorded as part of the statement of adjustments.
Today I am thankful for underwriters who have gone above and beyond to insure that file close, clients who are patient with the process and the sound of rainy days.
“Nature is written in mathematical language.” Galileo Galilei
I look forward to hearing from you in regard to your mortgage needs.
p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).
p.s.s.s You can download my new mortgage app here