Belleville Blog

Lately we have had some issues with deposits received with offers on properties. Here are a few points to help clarify.

Every offer has to have some form of "consideration" to be a binding contract. This is the role played by the "deposit".

Usually the deposit must be collected by the listing agent either at the time the offer is presented- "Herewith" or once an offer is accepted by both Buyer Seller- "Upon Acceptance". If "Upon Acceptance", the deposit must be delivered to the Deposit Holder (usually the listing brokerage) within 24 hours.

Not delivering the deposit in a timely manner can jeopardize an otherwise good deal due to the lack of consideration.

Also remember that a deposit cheque will be deposited and cashed right away. If your deal does not firm up the deposit will be returned to you by the brokerage once both parties have signed a "Mutual Release".

Most Brokerages will hold the funds for a week to 10 days to ensure it has cleared your account, before they will write you a cheque to return the deposit.

The deposit is held until the transaction closes and the deposit goes towards the purchase price. Quite often the deposit will be held by the listing brokerage and will actually be applied to the commission owing from the Seller.

The amount of deposit required varies form area-to-area and can be negotiated in the offer.