19 Feb Let’s Discuss Deposits
What is a deposit used for in an agreement of purchase and sale?
The deposit is to make your offer binding and legal. The larger the deposit can also show to the Sellers of the property that you have a strong interest in the property and have confidence with your finances.
In this hot real estate market, it is important to have every edge to ensure your offer is chosen. Ensuring that your deposit details are sorted out is one way to make your offer shine.
Many offers are submitted with the “Upon Acceptance” clause. If the offer is accepted, you are contractually obliged to submit the deposit cheque to the listing brokerage of the property within 24 hours.
If you want to submit the deposit through e-transfer or wire transfer, and the “Upon Acceptance” option has been chosen in this paragraph, an amendment to the contract may be required.
Things to keep in mind if you choose to submit a deposit through e-transfer or wire transfer:
Is the listing brokerage able to accept e-transfers or wire deposits? Have a conversation with us so that we can check with the listing salesperson BEFORE the offer is presented to confirm that a wire transfer or e-transfer is acceptable.
What is the e-transfer limit on your bank account? Many banks have an etransfer limit of $3000/day per account. If you agree to etransfer a $10,000 deposit, you may be unable to submit the deposit as one bank transaction. Some brokerages use the bill payee option that allows you to make a larger transfer.
Keep in mind, there are additional fees associated with wire transfers if you choose this deposit option, ask for the deposit instructions.
Will you be able to get an e-transfer or wire transfer a deposit in the timeframe agreed upon in the Agreement of Purchase and Sale? (If the offer is accepted on a Friday, a holiday, or a weekend, there may be banking delays, discuss this with us.
By ensuring that your finances are in order and that the correct deposit option is chosen, you can show the Seller that THIS is the offer to choose! We would be happy to guide you through the purchasing process and answer any of your questions.