The Wild Journey of Your Deposit: From Realtor to Lawyer - A Tale of Trust and Assurance
- Emily Miszk
- Jul 5, 2023
- 2 min read
Hey there! So you wanna buy a house, eh? Well, it can be a bit overwhelming, but don't worry, I'm here to walk you through the life of your deposit, from realtor to close.
First off, let's talk about your deposit. When you're buying a property, you're usually required to put down a deposit through your realtor. But don't stress, your deposit actually counts towards your overall down payment and closing costs. So it's like you're killin' two birds with one stone.

As the buyer, your deposit serves the purpose of providing security to the seller. It shows that you're serious about your offer and not likely to back out once things are finalized. There's no set amount required by law, but it varies depending on location. And when you're serious about buying, it's important to have your deposit funds readily available, so don't go blowin' all your cash at Tim Hortons.
Now, let's talk about where your deposit goes. It starts at the listing brokerage, held in trust. Don't worry, these accounts are regulated and audited, and the money held in them doesn't go towards the brokerage's overhead expenses. And while your money is sitting in trust, it's insured in case anything goes wrong.
If you made an offer with a condition of financing and you're unable to secure it, your deposit will be returned to you without any penalties, as long as your Agreement of Purchase and Sale doesn't state otherwise. So make sure you read everything before signing.
Once all conditions of the sale are met, your deposit will be transferred and held by your lawyer. The deposit is applied to the final purchase price on closing day and becomes part of your down payment. And if you're not required to finance, your closing costs will come out of the deposit and the difference will be given back to you by your lawyer.

A deposit is made in good faith to show sellers you're a serious buyer, and it's held in trust until the mutually agreed upon closing date. When speaking with your mortgage agent, make sure you provide proof of deposit so they can factor it in when qualifying you for a mortgage and adding it to your down payment.
And that's it, eh! Don't let the life of a deposit stress you out. Just make sure you have your funds readily available, read everything before signing, and don't forget to grab a double-double from Tim Hortons for the road.
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