A real estate deposit is money paid to secure a property when making an offer. It is usually held in trust by the buyer’s agent’s brokerage. If someone else holds the deposit, seek legal advice to ensure it is handled properly and released under clear terms.
How much is a Real Estate Deposit?
There is no set deposit amount, but in Metro Vancouver, it is typically 5% of the purchase price. Some sellers may accept a lower deposit, while others may request more.
When is a Real Estate Deposit Payable?
Deposits are usually paid when an offer becomes firm, after subjects are removed. However, in some cases, a deposit may be required when the offer is accepted.
How do I pay my Deposit?
Deposits must be paid by bank draft or wire transfer—cash is never accepted. A bank draft is given to your real estate agent, who provides a copy to the seller’s agent and submits the draft to their brokerage for deposit into a trust account. Wire transfers are sent directly to the brokerage’s trust account.
Is a Deposit the same as a Down Payment?
No, deposits and down payments are not the same. While a deposit eventually becomes part of your down payment, it is usually paid when an offer becomes firm (after subjects are removed). Whereas, the down payment is paid to your lawyer closer to the completion date.
If you would like more information on the buying process take a look at our Home Buying Guide.
