Real Estate Deposits in Home Purchasing 

When your offer on a home or condo is accepted, you might be surprised when your real estate agent asks you to include a small deposit with it.  READ MORE BOUT REAL ESTATE DEPOSITS 

Real Estate Deposits in Home Purchasing |

Not to be confused with your down payment, a deposit is essentially an offer of good faith to the seller that you are serious about purchasing their home – even though you still want to get a home inspection and your mortgage financing in place, before signing on the dotted line.
Once you sign the accepted offer, the deposit is applied against the purchase price of the home – so it’s not technically an “extra cost”, but it’s still a part of your home buying budget. How much should your deposit be and where does it go when you make it? 

How much is a typical deposit?
There isn’t really a set amount, but your real estate agent may request something in the range of 1% of the purchase price. For example, if you bought a home for $300,000, your agent could request $3,000 for the deposit.

When do I pay the deposit?
The deposit is paid when you sign an accepted Offer to Purchase (meaning the seller has accepted your offer and wants to move forward.

Who do I give the deposit to and where does it go?
You’ll give your deposit to your real estate agent, when you’re signing the paperwork for your accepted offer. Its usually required to presented as a Draft and made payable to the Real estate Agents brokerage company in Trust.

Your agent then passes it off to the seller’s real estate agent, who it stays with until closing day. On closing day, the amount is applied against the purchase price (so it’s essentially considered part of your down payment).

What happens if the house doesn’t close?
If you back out of the purchase for any reason, the seller may be able to keep your deposit.