When you make an offer on a home, you will be asked to provide a deposit. This deposit shows the seller that you are serious about your offer and that you have the financial means to complete the purchase.
The deposit amount varies but is typically between 5 and 10 percent of the purchase price, depending on the market and the type of property. Once your offer is accepted, the deposit is paid within 24 hours and held in trust by the listing brokerage or your lawyer until closing.
This money becomes part of your down payment at closing, not an additional cost. If the transaction falls through due to a valid condition, such as financing or inspection, the deposit is usually returned to you in full. If you walk away from a firm deal without legal grounds, the seller may keep the deposit or pursue legal action.
Deposits give both parties confidence in the transaction. For sellers, it demonstrates commitment. For buyers, it secures their interest in the property and removes it from the open market during the conditional period.
When deciding on your deposit amount, work with your agent to assess what is typical in your area. A stronger deposit can help your offer stand out, especially in competitive situations, but it should still align with your comfort level and liquidity.
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