Show Me The Money! All About Deposits!

More & more these days we're hearing about deals being jeopardized or even falling apart due to the deposit. Or rather the lack of a deposit...or shenanigans of some sort or another surrounding the deposit. There are also lots of misconceptions around what happens to the deposit if a deal falls through. So here's a little primer on a few different aspects of the deposit.

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In real estate, the deposit is like a downpayment on your downpayment. A show of good faith. Typically an Agreement of Purchase & Sale is signed both under seal & offers a deposit. Depending on what area in Ontario you're purchasing in, it can be anywhere from $500 and up. Typically here in the Durham region we see deposits start at $5000 and go up from there, often the amount is dependent on the purchase price of the home. The expectation is, the higher the purchase price, the higher the deposit. In Toronto, it seems to be the norm that deposits are a minimum of 5% of the purchase price. Fun fact: we bought our house 18yrs ago with a $500 deposit! Times sure have changed, lol!